Research Information System
AFE Samos 2011 International Conference on Applied Financial Economics, Samos, Greece, 1 - 04 July 2011, vol.1, pp.483-489, (Full Text)
Under the pressure of competition, the market is shared by a great deal of companies which differ in terms of their productivity levels, adaptation abilities, trends or new technologies, strength levels through financial crisis and roles in enhancing the employment. With their products and services Small and Medium Enterprises (SMEs) can compete with large-scale companies. On the other hand, they can also support and complete the large-scale companies by constituting subsidiary industries. SMEs have an important role in developing national economies. However, financial crisis affects the SMEs financially as well as the other companies. Especially in crisis period, enterprises dealing with financial problems are expected to demand credits; while the banks are more attentive to provide this demand because of non-performing credits. In order to determine the enterprises to provide credits, the banks need some accurate statistical analysis. In this study for the year 2010, which is the liquidity crisis period, the financial distress possibilities of 145 SMEs out of 250 enterprises that do credit application to a bank are evaluated with the help of ordered logit regression by using relevant financial ratios. The analysis of data have pointed out that 7 of 19 financial ratios are regarded to be more important than the others as being the main indicators for the banks in the usage of credit approval or denial decisions. In the study, risk levels are determined with Altman Revised Z Score model and an early warning system is proposed.