MODELS OF CREDITWORTHINESS EVALUATION OF COMPANIES

Abstract

The assessment of creditworthiness is based on a detailed analysis of financial reports of the company. The most common models of creditworthiness evaluation used by the companies are the traditional method, the Altman Z-score and Kralicek quicktest. A detailed analysis of the financial reports of a company was made in this work and creditworthiness was evaluated using these three models. The assessment of creditworthiness is essentially the assessment of business risk and if it is continuously carried out it may help the company to avoid the danger of getting into crisis. It is especially important that the companies which have impaired balance, which are not liquid, which are in debt and unprofitable, notice problems in time and solve them because the impairment of performances in the long term leads to insolvency and then to the bankruptcy of a company. Therefore, the emphasis in this work is put on the application of traditional, Altman Z-score and Kralicek QuickTest in the process of measurement of company performances in order to determine its financial strength and to recognize the early warning signals of a possible crisis.