Evaluation of the functionality of bankruptcy models in mining companies

the Czech Republic. Since mining companies are important for the
industry, it is necessary to predict their economic development.
Moreover, forecasting the economic development of an enterprise in
terms of the risk of bankruptcy is an important activity for the
financial management of any enterprise. One of the ways to predict
economic development and assess the risk of possible bankruptcy is
to use bankruptcy models. The aim of this paper is to determine the
most appropriate model for predicting the bankruptcy risk of a
mining company. The subject of the article is to identify the most
suitable bankruptcy models applicable for bankruptcy risk prediction
in Czech conditions of mining enterprises and to verify their
functionality on real data of mining enterprises. On the basis of a
search of expert sources and comparative analysis, it was found that
the most suitable models for predicting the development of the
enterprise in terms of bankruptcy risk are modified versions of
traditional bankruptcy models. The analysis showed that the
bankruptcy models are the IN05 Index, Altman's analysis for Czech
companies and the modified Taffler's index. The authors' team
conducted a thorough analysis during which they verified the
functionality of the selected bankruptcy models on real data of
mining companies. After a thorough analysis to test the functionality
of bankruptcy models on real data from mining companies, the most
appropriate model for estimating the evolution of bankruptcy
probability risk was identified.