D. Hadasik's model (1998)

Method of calculation

Where:

Model description

D. Hadasik developed 9 versions of discriminant models. However, model No 4 (from 1998) is considered as the most relevant, due to its high fit. The model consists of 6 financial ratios that refer to financial liquidity, indebtedness and the efficiency of operating performance.

Interpretation of the Z(HA)-score

Z (HA)= -0,374345 - critical value (bankruptcy threat for the function below the critical value)
- Z (HA)≤ -0,374345 - "bankrupt" (distress zone)
- Z (HA) > -0,374345 - "non-bankrupt" (safe zone)
Model fit: 95.08% (the model correctly classified 95.08% of the examined companies).
The higher is the Z(HA) function (above -0.374345), the better is the financial situation of a company and the lower is the bankruptcy threat within the forthcoming year.
The increase of Z(HA) over time indicates the improvement of financial situation and decrease of bankruptcy threat.
In the case of the Z(HA) < -0.374345 (which signalizes bankruptcy threat) it is recommended to run a detailed analysis of financial performance to detect which aspects require an immediate healing procedures.

Detailed decription of respective ratios and their impact on the Z(HA)-score value

Constant value +2.36261

The constant, free factor results from statistical estimates when building the model, it allows setting the limit value of Z(HA).

X₁ – current ratio

Method of calculation

Ratio's weight: +0.365425
Units: times

Remarks

The ratio is calculated like the current ratio available in the eanaliza.pl system in the group of liquidity ratios. It uses the data for the current period.

Ratio's interpretation

A higher value of the ratio means a higher level of liquidity and better financial situation, which reduces the risk of bankruptcy.
In the model, the X₁ ratio has a weight with a positive sign, which means that increase in the ratio, will increase the Z(HA) function, reducing the bankruptcy risk.

X₂ – quick ratio

Method of calculation

Ratio's weight: -0.765526
Units: times

Remarks

The ratio is calculated like the quick ratio available in the eanaliza.pl system in the group of liquidity ratios. It uses the data for the current period.

Ratio's interpretation

A higher value of the ratio means a higher level of liquidity and better financial situation, which reduces the risk of bankruptcy.
However, in this model, ratio X₂ has a weight with a negative sign, which means that when the quick ratio increases, the Z(HA) function decreases, indicating higher level of bankruptcy risk.

X₃ – debt ratio

Method of calculation

Ratio's weight: -2.40435
Units: %

Remarks

The ratio is calculated like the debt ratio available in the eanaliza.pl system in the group of debt management ratios. It uses the data for the current period.

Ratio's interpretation

A higher value of the ratio means higher indebtedness of the company, which increases the risk of bankruptcy.
In the model, the ratio X₃ has a weight with a negative sign, which means that an increase in the ratio (thus an increase in debt) will lower the value of the function Z (HA), indicating higher bankruptcy threat.

X₄ – net working capital to total assets

Sposób obliczania

Ratio's weight: +1.59079
Units: %

Remarks

The ratio is partially calculated like the net working capital to current assets available in the group of liquidity ratios, but in the denominator we take the total assets instead of the current assets. It uses the data for the current period.

Ratio's interpretation

A higher value of the ratio means higher level of net working capital in financing assets, which improves firm's stability, financial liquidity and long-term solvency.
Higher level of net working capital reduces the bankruptcy risk, by reducing the level of short-term liabilities .
Increase in ratio X₄, leads to increase in the Z(HA) function, improving the financial situation and safety of a company.
In case of negative net working capital, negative value of X₄ ratio will decrease the level of Z(HA) function, increasing the bankruptcy threat.

X5 – rotacja należności krótkoterminowych

Sposób obliczania

Waga wskaźnika: +0,00230258
Jednostka: dni

Uwagi do obliczenia wskaźnika

Wskaźnik jest obliczany dokłądnie tak, jak ujęty w systemie eanaliza.pl wskaźnik rotacji należności krótkoterminowych w dniach. Dane do obliczenia wskaźnika, to dane na dzień bilansowy.

Interpretacja

Wyższa wartość wskaźnika oznacza dłuższy czas oczekiwania na spływ należności, co ogranicza efektywność działania.
Jednak w modelu wskaźnik X5 ma wagę dodatnią, co oznacza, że wzrost wskaźnika będzie prowadzić do wzrostu wartości funkcji Z(HA) i poprawy sytuacji przedsiębiorstwa.

X6 – rotacja zapasów

Sposób obliczania

Waga wskaźnika: -0,0127826
Jednostka: dni

Uwagi do obliczenia wskaźnika

Wskaźnik jest obliczany dokładnie tak, jak ujęty w systemie eanaliza.pl wskaźnik rotacji zapasów. Dane do obliczenia wskaźnika, to dane na dzień bilansowy.

Interpretacja

Wyższa wartość wskaźnika oznacza dłuższy czas zaangażowania środków przedsiębiorstwa w działalność operacyjną, dłuższy czas zamrożenia środków w zapasach, co obniża efektywność działania.
W modelu wskaźnik X6 ma ujemną wagę, co oznacza, że wzrost wartości wskaźnika będzie prowadził do obniżenia wartości funkcji Z(HA), co z kolei będzie wskazywać na wzrost ryzyka bankructwa.

Źródło:
HADASIK D. (1998). Upadłość przedsiębiorstw w Polsce i metody jej prognozowania, Akademia Ekonomiczna w Poznaniu, Poznań.
PRUSAK B. (2005). Nowoczesne metody prognozowania zagrożenia finansowego przedsiębiorstw, Difin, Warszawa.