Transformations  in
Business & Economics

FINANCIAL DISTRESS OF ROMANIAN LISTED COMPANIES UNDER SYSTEMIC EVENTS: ANALYSIS AND ACCURACY OF PREDICTION MODELS
Nicolae Bobitan, Diana Dumitrescu

ABSTRACT: This paper thoroughly analyses financial distress among non-financial companies listed on the Bucharest Stock Exchange (BVB), focusing on the impact of systemic events over the past five years. The research involves a combination of quantitative and qualitative methods, employing discriminant analysis and logistic regression to evaluate the accuracy of traditional models for predicting bankruptcy through Altman’s Z-scores. The analysis of a dataset comprising Romanian-listed non-financial companies sheds light on the dynamics of financialdistress during the specified period. A key objective is to assess the effectiveness of traditional bankruptcy prediction models in capturing earlier instances of financial distress triggered by systemic events. The findings of the study reveal valuable insights into the accuracy of using established bankruptcy models for anticipating financial distress, underscoring a higher accuracy of predictive models to identify and address financial distress developed through logistic regression. This research contributes to the broader understanding of financial distress prediction, offering pertinent information for strategic decision-making in the context of the occurrence of systemic events. Furthermore, the study advocates for the development of policies aimed at mitigating financial distress among Romanian publicly listed companies.

KEYWORDS:  financial distress, predictive models, logistic regression, discriminant analysis, Romanian listed companies.

JEL classification:  C53, C81, D22, G17, M41.