ANALYSIS OF PUBLIC ENTERPRISES IN THE REPUBLIC OF SRPSKA AND ASSESSMENT OF THEIR FINANCIAL RISK

Abstract

The paper investigates how financially insecure public companies in the Republic of Srpska are using the Altman EM score model and the RAPO model developed on business entities in the Republic of Srpska. Public companies are classified as low, medium and high risk companies in terms of the probability of going bankrupt. The results show that in the observed period from 2013 to 2018, half of public companies are constantly in the problem zone, while about 40% are in the safe zone. That is, companies that have been identified as problematic have been in that group for many years, while those with low business risk have been consistently successful. The paper also presents the state's participation in the capital of public companies, as well as expenditures in the form of subsidies and recapitalizations that are allocated from the budget every year.