Discriminant analysis consists of assigning an individual to two or more distinct populations, on the basis of observations on several characters of the individuals and a sample of observations on these characters from the populations. R. A. Fisher suggested a linear function of variables representing different characters, called linear discriminant function, for classifying an individual into one of two populations. E. I. Altman adopted this approach to identify bankruptcy risk of corporations. Altman’s model of bankruptcy was estimated for various countries, thereby for Polish economy. Some results of estimation and interpretation of linear discriminant function estimated by the author are presented in the paper. Methodological problems of bankruptcy prediction, especially fulfilling of the basic assumptions and stability of the model and estimation problems are also discussed.
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