Forecast of financial insolvency through multiple discriminant analysis for the automotive sector of Tungurahua

Main Article Content

Christian Fabián Castillo Urco
Diego Fabián Raza Carrillo

Abstract

The main objective of the present investigation was to evaluate the financial performance that allowed projecting financial insolvency through multiple discriminant analysis for the automotive sector of Tungurahua, the results were distributed in zone: healthy area, gray area (uncertainty), bankruptcy area. There are 3 proposed objectives: 1. Determine the main components of the multiple discriminant analysis, 2. Diagnose the financial situation of the automotive sector and 3. Adapt the variables of the insolvency risk model. A methodology based on the combination of descriptive and predictive research with a quantitative approach through the use of indicators has been developed. The population was made up of 29 companies in the sector, the selected sample belongs to the companies regulated by the SUPERCIAS, which are 5 in total. For the quantitative analysis, 5 indicators obtained from the financial statements available with free access on the SUPERCIAS website in order to build the equation. The forecast was made using second order polynomial regression, the main results obtained determined that only 1 company is in a healthy area, despite the COVID-19 pandemic. The main conclusion was that companies in the automotive sector of Tungurahua need the use of practical financial tools, it is through Altman's Z model that deepens the use of financial ratios in administrative management for this, the analysis should be guided and continuous decision making based on real and objective financial reasons in order to mitigate or reduce exposure to the risks and challenges of the internal and external environment that the industry faces today.

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How to Cite
Castillo Urco, C. F., & Raza Carrillo , D. F. . (2022). Forecast of financial insolvency through multiple discriminant analysis for the automotive sector of Tungurahua. Espí­ritu Emprendedor TES, 6(2), 21–35. https://doi.org/10.33970/eetes.v6.n2.2022.300
Section
Articles
Author Biographies

Christian Fabián Castillo Urco, Pontifical Catholic University of Ecuador Ambato Headquarters, Ambato, Ecuador.

 Ingeniero de Empresas (Facultad de Ciencias Administrativas) Education, MBA em Gestão de Negócios Education

Diego Fabián Raza Carrillo , Simón Bolívar Andean University, Quito, Ecuador.

Professor at the Simón Bolívar Andean University, Quito, Ecuador. MBA (Management) Education,PhD (Education)

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