INSOLVENCY PREDICTION IN THE PORTUGUESE CONSTRUCTION INDUSTRY

Year 2013, Volume: 21 Issue: 2, 143 - 164, 25.12.2013

Elisabete S. Vieira Carlos Pinho Carla Correia

https://doi.org/10.29228/mjes.105

Abstract

This study tries to determine the firms’ specific variables considered determinant to predict the probability of insolvency of Portuguese companies in the construction industry, considering a sample of 150 insolvent firms and 150 operating companies. We consider a set of economic and financial ratios to analyze the insolvency prediction and apply the linear probability model, as well as the Logit and Probit models. The results show that the main ratio to predict the insolvency was the cash-flow to total assets ratio, suggesting that the higher the cash-flow to total assets ratio value, the lower the probability of insolvency. The results can be used by policy makers to minimize the spill over effect of construction crisis to the economy.

Keywords

Bankruptcy, insolvency prediction, financial ratios

PORTEKİZ İNŞAAT SEKTÖRÜNDE İFLAS BEKLENTİSİ

Abstract

Bu çalışma, 150 iflas etmiş ve 150 halihazırda faaliyet gösteren şirketi inceleyerek, inşaat sektöründe bulunan Portekizli şirketlerin iflas olasılığı tahmininde belirleyici olduğu düşünülen, firmalara özgü değişkenleri belirlemeye çalışmaktadır. Makalede, iflas tahmini analiz etmek ve Logit ve Probit modellerinin yanı sıra doğrusal olasılık modeli uygulamak için, bir dizi ekonomik ve finansal oran kullanılmaktadır. Sonuçlar, iflas tahmini için en önemli oranın, nakit akışının toplam aktiflere oranı arttıkça iflas olasılığının düştüğünü belirten, nakit akışının toplam aktiflere oranı olduğunu göstermektedir. İnşaat krizinin ekonomiye yayılma etkisini en aza indirmek için sonuçlar politika yapıcılar tarafından kullanılabilir. 

Keywords

İflas, iflas tahmini, finansal oranlar

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