A Study of Applicability of Bankruptcy Prediction Models for Small Businesses

The paper investigates predictive ability of existing bankruptcy prediction models suitable for small business by using dates of accounting report of Russian’s firms. Combination of financial ratios analysis with bankruptcy prediction models’ testing made it possible to identify the models showing high predictive ability. Study also provides applicable model for small business. The study is based on financial statements data about one hundred enterprises of small businesses, divided two types: failed and non-failed firms. The results of the study would be useful to many users such as financial analysts, board of small enterprises, lenders, auditors, tax inspectors.