Methods of corporate failure prediction in developing countries on the example of Malaysia
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Companies compete nowadays in a changeable and turbulent environment. As each enterprise may find itself on the verge of bankruptcy, it is important to be able to predict corporate financial distress in advance and constantly evaluate the economic situation of the company. Only in such case managers may restructure it and save from bankruptcy. If they do not know how bad the current situation of the enterprise is, it may be too late and impossible to reorganize it. Therefore there is a need to develop models which enable the assessment of the financial situation of companies and evaluation of bankruptcy risk. The research findings from well de-veloped economies (e.g. USA, Canada, UK, Germany) may be helpful in developing new methods of corporate failure prediction in Poland. However, Polish economy is much different from rich EU countries or USA due to many different factors. Polish businesses still must compete in a different environment than German or British enterprises. Therefore Polish researchers should not only focus on research carried out by Altman, Taffler or Beaver but may also follow the example of research find-ings from developing economies, like Malaysia. The purpose of this article is to present and describe methods of predicting bankruptcy used in Malaysia. It would be useful to conduct similar research in Poland.
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