Archive for March, 2009
The Probability of Bankruptcy
A good metric should have a low probability of rejecting a true hypothesis of bankruptcy (false positive) and a high probability of rejecting a false hypothesis of bankruptcy (false negative).
View Post
Predicting Bankruptcy
The Z-score is not intended to predict when a firm will file a formal declaration of bankruptcy in a district court. It is instead a measure of how closely a firm resembles other firms that have filed for bankruptcy.
View Post
The Risk of Bankruptcy
There are several models in use for predicting bankruptcy and we have in our balance simulation model implemented two; Altman’s Z-score model and the risk index Z developed by Hannan and Hanweck.
The Risk of Spreadsheet Errors
Audits done shows that nearly 90% of the spreadsheets contained serious errors. Code inspection experiments also shows that even experienced users have a hard time finding errors succeeding in only finding 54% on average.
