BUSINESS INSOLVENCY PREDICTION MODELS: A COMPARATIVE ANALYSIS OF MULTIVARIATE DISCRIMINANT ANALYSIS AND LOGISTIC REGRESSION
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This study looks at predictive approaches that use logistic regression and multivariate discriminant analysis (MDA) to evaluate a company's insolvency. The Z-Score model developed by Edward Altman and William Beaver is the main focus of this historical review of bankruptcy prediction techniques. The use of a binary logistic regression model to assess the importance of individual financial ratios in predicting a company's bankruptcy risk is also covered in the paper. According to the results, MDA and logistic regression provide strong frameworks for comprehending the financial health of businesses, with applications in risk management and decision-making. To preserve accuracy and relevance in a changing economic environment, the study does stress the necessity of constant validation and adaptation.
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