insolvency prediction models

Insolvency prediction models are tools used to estimate the likelihood that a company will run into financial trouble or go bankrupt in the future. They analyze various financial data—like revenue, debts, and cash flow—to identify warning signs of potential failure. These models help investors, lenders, and managers make informed decisions by assessing risk levels. By applying statistical techniques, they can predict insolvency outcomes with a reasonable degree of accuracy, enabling early interventions or better risk management strategies.