Limitation of Financial Health Prediction in Companies from Post-Communist Countries
Round 1
Reviewer 1 Report
Main Comments and Suggestions
In the introduction, you need to give your findings right after the motivation part. Then you should list/clarify the contributions of the paper which are missing in the current paper. You can talk about the following contributions: What insights can you provide based on your finding? Do they push forward our understanding? What should we do with your research? Do you have any suggestions to improve the current regulation or practice? Adding the above discussion and extend your literature review may help you make more contributions and position your contributions better.
You should study and rationalize the use of firm size measures in the literature since they are usually the key variables that affects the independent and dependent variables simultaneously. You can talk about the differences of total capital, assets, sales used in the paper. See Dang et al. 2018. Measuring Firm Size in Empirical Corporate Finance. Journal of Banking & Finance January, 86:159-176. After all it is the most significant variable in most studies in this area. You should elaborate more and justify more rigorously.
Minor Comments and Suggestions
The conclusion is too short. You should summarize your findings, discuss practical implications, and point out future direction for research.
There are many typos and broken sentences in the paper. For example, “From the mentioned there is obvious that there is proper to combine both approaches, while there is possible…”. So many “there is” and none is used properly. You need to seriously proofread the paper and extend and update your references.
Last, I would like to thank the authors for an interesting and potentially important paper and hope these comments and suggestions can help further their study.
Author Response
Dear reviewer,
Thank you very much for your review. In attachment we send you corrected contribution according your requests and recommendations. Changes had been done as follows:
- Point one: to give findings right after the motivation part and insights:
- Response: We add our main finding to the introduction: „Our findings shows that prediction indexes in individual sectors in post-communist countries recorded different results. Due to the bad index of payment disability, which evaluates financial health of the companies in V4, all models should be modified by this index. The findings encourage evaluating the accuracy of bankruptcy prediction models by examining a large sample of companies and evaluating real benefits obtained from the acquired information.“
- Point two: the uses of firm size measures:
- Response: According recommendation of reviewer to rationalize the use of firm size, we add to conditions for models using: “The model using must consider also the firm size, which is ranked among key variables of the prediction. This variable must be considered, since capital, assets, sales, etc. are different in small and medium enterprises (SMEs) in comparing with big corporation (Dang et al., 2018). In most studies in this area it is considered as the most important variable.”
- Point three: short conclusion, summarization of findings, discussion and future research:
- Response: We make summarization of findings in the conclusion, underlying that present contribution distinguishes from previous similar studies from the view of list of conditions, necessary to obtain during using of prediction models in post-communist countries. We rewritten conclusions by adding practical implications and limitation of our research. We determined further possible research in conclusion and uniqueness of our research. According comments of review we add contributions of the paper at the end of the introduction: “Based on the finding we can state that before selection of the method for prediction of financial health, economic conditions of analyzed subject must be considered. The findings could serve as a base for further research in other economic spaces. “
- Point four: typos and broken sentences in the paper:
- Response: „there is“ – removed from the text and sentences had been rewritten.
- Point five: English editing
- Response: According request in the table of review we make second revision of English grammar by English editing service.
Best regards,
Adriana Csikosova
Author Response File: 
Author Response.docx
Reviewer 2 Report
Dear authors,
I appreciate your proposal at this early stage of a scientific research article, but you have a lot to do to improve the quality. The actual form of your paper is consistent with the demands of the literature review. I suggest you to use the models to analyze the situation of the companies from the East-European countries in the early ‘90s (or the last part of the 90's). I think that this subject will be very interesting for readers. Please present the economic situation, your statistic population, statistic sample, research method and realize a comparison between countries.
I will be very grateful if you consider this advice to improve the quality of your paper
Secondly, I would appreciate if you consider the fallowing
The row 28: there are two errors: the space between i and t, and a missing space after t „holds its own existence and i tis able to”, so please correct them.
In the row 67th, there is a contradiction „In reaction to Beaver (1967), Tamari (1966) understood that”; it is impossible because 1966 is before 1967... Please correct it
The idea presented in the rows 70-73 is a little unclear. It stated that Tamari is author of „one index”, although before, the authors stated that he „understood that evaluation of financial health cannot be done only by one index. Please revise this.
The rows 81-85 introduce a lot of ideas, but not sufficient clear. The readers need to know exactly what the authors must to show. Please complete these statements with the missing aspects to be more clear. Also the punctuation signs must be changed, to offer text clarity.
Line 99, please change „till present” through since.
Also, the results and conclusions must be written again.
I know that we talk about effort (your effort), but it is the only way to be on top.
Success!
Author Response
Dear reviewer,
thank you very much for your review. In attachment we send you corrected contribution according your request and recommendations. We made following changes:
- Point one: suggestion to use the models to analyze the situation of the companies from the East-European countries in the early ´90s:
- Response: As for the comment to use models in the early ´90s we resulted from Neumaier (1995) and we add literature from Fulmer, et al. (1984), Chrastinová (1998), Jager and Becker (2007) and Kanapickiene et al. (2014)
- Point two: economic situation, statistics, research method:
- Response: We presented more detail information about object of searching, the data and their acquiring, reasoning of methods selection.
- Point three: errors correction in former row 28:
- Response: we removed grammar mistakes, for example „i tis“ to „it is“,
- Point four: former row 67th – correction of years:
- Response: we corrected years of publication of Beaver (1966, not 1967, as mentioned in list of references)
- Point five: the idea presented in former rows 70-73 unclear:
- Response: We cleared out idea of Beavers and Tamari: “In reaction to Beaver (1966), Tamari (1966) understood that Beavers analysis is not definite, since according one index company could be evaluated as prospering and according other index company could be ranked among not prospering companies. Therefore Tamari created risk index....“
- Point six: former rows 81-85 not sufficient clear.
- Response: we rewritten sentence in original rows 81-85.
- Point seven: change in line 99
- Response: „till present“ to „since then“
- Point eight: English editing
- Response: According request in the table of review we make second revision of English grammar by English editing service.
Best regards,
Adriana Csikosova
Author Response File: Author Response.docx
Round 2
Reviewer 1 Report
Improved significantly.
