PREDICTING FINANCIAL DISTRESS OF COMPANIES IN THE AGRICULTURAL SECTOR

This paper is focused on predicting financial distress of agricultural companies in the Czech Republic between 2008 and 2011. This period is connected with the world crisis in many branches. Although, agriculture itself is a very specific branch, the crisis did not have such a significant impact on this sector in the Czech Republic. On the contrary, financial viability is a crucial issue for every company. There are numerous approaches how to predict the corporate financial distress. The paper deals with credit scoring systems, represented by Altman Z-Score, and CH and G indices used in the Czech Republic. The Czech State Agriculture Intervention Fund uses its own methodology created specifically for agricultural companies. A crucial question remains whether these approaches provide sufficient answers on the corporate financial viability and whether they can be considered reliable. The four mentioned models are calculated for a data sample, which consists of 142 Czech large agricultural companies. Results of the calculation and comparison between models leads to the conclusion that it is significant if there has already existed a sufficient model or if there is a gap which should be filled by a creation of a new prediction formula for a quick answer on the financial health of a company in the agricultural sector.