Kopelev I.B.Financial University under Government of Russian Federation, Moscow, Russian Federation kopelev@yandex.ru
Subject The subject of the study is financial and economic performance data acting as indicators of forecasting bankruptcy risk of a company. The paper includes the results of developed methodological approach to substantiating the choice of financial and economic performance indicators of companies as part of bankruptcy risk forecasting. The importance of the selected subject relates to the empirical approach prevailing in the works of contemporary domestic and foreign economists while determining the predictive ability of financial and economic performance indicators, which are considered both separately and as part of parametric models of bankruptcy prediction. Objectives The purpose of the study is to create a theoretically justified set of financial indicators, representing a comprehensive description of various aspects of company's activities, and to develop a mathematical equation describing the dependence of a probability of bankruptcy on these indicators' values. Methods As a theoretical basis of the research I chose the results of works of J.W. Wilcox and W.H. Beaver on predicting the risk of bankruptcy. I chose the random walks theory as a methodological basis of the research. Results I proposed to develop the theoretical approach of J.W. Wilcox to the formation of a set of financial and economic performance indicators of a company, which have the best predictive power within solving the problems of bankruptcy risk prediction. I generated a set of financial ratios, which I recommend to use for bankruptcy risk forecasting and crisis intervention planning. I developed a complex equation, which in general terms enables to link a probability of bankruptcy with key aspects of financial and economic activities of a company. Conclusions I have determined a mathematical relation that allows assessing the impact of key financial performance indicators, as well as of a planned increase in the value of net assets, which reflects the degree of aggressiveness of company's financial policy, on the probability of bankruptcy.
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