Forecasting financial crises for an enterprise by using the Grey Markov forecasting model

摘要

The business environment is rapidly changing and some enterprises have announced unexpected restructurings, leading to stagnating stock prices and declines in their business performance. To prepare for calamity, it is becoming increasingly important for enterprise managers to use current financial data for short-term financial forecasting. Managers and investors are increasingly concerned with immediately and accurately forecasting firm financial crises using a limited amount of financial data. This work employs Z-Score value, which can be used to measure multinomial financial crisis index for forecasting, and utilizes Grey Markov forecasting for valuation. Based on the research results, the accuracy of the Grey Markov forecasting model is as expected, with excellent Z-Score, and the model can rapidly forecast the likelihood of firm financial crises. The study results can provide a good reference for government and financial institutions in examining financial risk, and for investors in selecting investment targets.