Discriminatory analysis and the possibilities of its use on the example of the banking sector

Abstract

Objective: Investing equity in listed companies is often difficult and requires making well-thought-out decisions. It is not known whether the investment will pay off even in a few percent, and investors often do not know the condition of the enterprise.
Materials and methods: The article uses a model of discriminant analysis allowing to estimate possible bankruptcy of the enterprise. The results of the model were compared to the prices of companies listed on the Warsaw Stock Exchange. The study did not apply to entities belonging to the banking sector. The study compared the financial results of enterprises from the last 4 years (2016-2019).
Results and conclusions: The results of the study made it possible to present the current financial situation of the surveyed enterprises, and the use of discriminant analysis showed the relationship between the model result and the current rate of the company. The authors of the study put forward the thesis that the application of the discriminant model can be used to make investment decisions.