Bankruptcy risk prediction for European Small and Medium-sized Enterprises

For the benefit of its clients, nBanks invests in an important source of knowledge and innovation: academic research. As part of its partnership with the University of Minho, we interviewed Sofia Malheiro, author of a master's thesis that defines a predictive model to help companies in Europe at risk of bankruptcy.

nBanks - Tell us a little about yourself and your background.

Sofia Malheiro - I'm Sofia Malheiro, I'm 22 years old and I'm from Braga. I got my degree in Management at the University of Minho and now I'm studying for a Master's in Finance, also at the University of Minho.

I consider myself a methodical, persistent person who doesn't give up easily.

I am motivated by embracing new challenges. Whenever I can, I participate in workshops and lectures to develop knowledge.

I also have a special interest in foreign languages, highlighting: German, Spanish and English.

nBanks - What motivated you to collaborate with nBanks?

S.M. - The opportunity arose to develop projects/theses with companies, instead of developing typical theses. Alongside my interest in the investment area, I have always had a certain curiosity about the banking and credit area. Until now, I have never been able to delve deeper into this area, as it was not covered in my undergraduate degree or in the academic part of my master's. The only contact I had was in the Banking Economics Topics course unit – an option I chose last year. I decided to collaborate with nBanks to develop my thesis, as it gives me the practical opportunity to gain and deepen knowledge in the banking and credit area.

nBanks - What thesis will you develop and what methodology will you use?

S.M. - My thesis will focus on testing known models for predicting corporate bankruptcy, applied to some European small and medium-sized enterprises. The methodology to be followed will be to use the most recent existing company data in the AMADEUS database and apply the Altman Z-Score and Ohlson models.

nBanks - What applicability do you think your thesis will have in the future? What benefits do you identify for companies and their managers?

S.M. - I hope that the thesis I am developing will be useful and will also be applied in nBanks services.

The biggest benefit will be to help company managers position/identify the bankruptcy risk of their companies, based on the history of similar companies.

nBanks - What final comment would you like to leave?

S.M. - I would like to thank nBanks once again for the opportunity it gives me to develop a practical project and to have my first contact with the world of work. I hope to achieve the objectives and not disappoint anyone.

The conclusions of this and the remaining 3 master's theses developed within the scope of the partnership established with the School of Economics and Management of the University of Minho will result in the creation of yet another functionality of the nBanks platform, to add to the range of tools available to support and streamline corporate financial management.

Next week we will interview the student who developed the 4th master's thesis in conjunction with nBanks.

‍