Analysis of the Construction Industry in the Slovak Republic by Bankruptcy Model

Abstract

Construction industry was included until 2008 to one of the key sectors in Slovakia, which together with the automotive industry formed the core of the Slovak economy. On the present we can notice the first signs of recovery in this sector, but the global financial and economic crisis tinged this sector so strong that the general recovery of the sector would take several years. Experts predicted that the first signs of recovery in construction could see in the previous year (2015). As we mentioned construction in Slovakia has slowly gained an increasing trend, what could be seen in quantity of orders, paid invoices, its staff, increasing capacity, the growth of sales etc. For the analysis is used the Altman Z-score bankruptcy model, which sets the likelihood of the bankruptcy in a business. In the analysis was used Altman Z-score for non-productive businesses and start-up businesses, Z-score for other businesses and Z-score by Neumaier, which should objectively reflect the conditions of Slovak businesses. The results from this analysis were compared with the development of solvency index by Creditreform, s.r.o.

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