Home  Journals  Economic Analysis: Theory and Practice  13(412) - 2015 April

The use of economic analysis in the diagnosis of financial insolvency

Vol. 14, Iss. 13, APRIL 2015

Article PDF Version

Available online: 5 April 2015

Subject Heading: METHODS OF ANALYSIS

JEL Classification: 

Pages: 11-23

Importance Inadequacy and instability of the regulatory framework of bankruptcy in Russia, the lack of sufficiently objective, reasonable methods of diagnosis of bankruptcy do not allow, in a timely manner, identifying the trends in possible financial difficulties and take timely managerial decisions aimed at improving the financial condition and avoiding possible bankruptcy. The economic analysis in the diagnosis of a possible bankruptcy of the organization improves the quality, reliability and completeness of the information used for management decision-making.
     Objectives The paper aims to assess the applicability of domestic models for diagnosis of bankruptcy of commercial organizations.
     Methods The authors used certain domestic methods of bankruptcy diagnosis to evaluate the financial condition of organizations.
     Results The authors are analyzing the feasibility of a ratio analysis method, its advantages and disadvantages. A study of the organization's data concludes on the validity of the use of methods of bankruptcy diagnosis. According to the results of the analysis, it can be concluded that the enterprise is not stable. It cannot be inferred that the enterprise is in the solvent state of crisis. To obtain reliable results for the output, it is necessary to conduct a further comprehensive review of the enterprise that would identify weaknesses in the enterprise's policy.
     Conclusions and Relevance The authors concluded that the ratio method should be applied in financial analysis At the same time it is necessary to use the system of both relative and absolute terms, calculated according to the statistics, accounting, records management, and other sources of information. That will allow a timely identification of possible bankruptcy trends.

Keywords: coefficient method, financial insolvency, foreign, domestic, models, preview, integrated diagnostic analysis

References:

1. Analiz finansovoi otchetnosti [Analysis of financial statements]. Moscow, Omega-L Publ., 2009, 451 p.
2. Blank I.A. Upravlenie denezhnymi potokami [Cash Flow Management]. Kiev, Nika-Tsentr Publ., 2007, 736 p.
3. Blank I.A. Finansovyi menedzhment [Financial Management]. Kiev, El'ga, Nika-Tsentr Publ., 2004, 656 p.
4. Bocharov V.V. Kompleksnyi finansovyi analiz [A comprehensive financial analysis]. St. Petersburg, Piter Publ., 2009, 240 p.
5. Gilyarovskaya L.T. Ekonomicheskii analiz [Economic analysis]. Moscow, YUNITI-DANA Publ., 2004, 615 p.
6. Gilyarovskaya L.T., Vekhoreva A.A. Analiz i otsenka finansovoi ustoichivosti kommercheskoi organizatsii [Analysis and assessment of the financial viability of a commercial organization]. St. Petersburg, Piter Publ., 2003, 256 p.
7. Endovitskii D.A., Bocharova I.V. Analiz i otsenka kreditosposobnosti zaemshchika [Analysis and assessment of the creditworthiness of a borrower]. Moscow, KnoRus Publ., 2005, 272 p.
8. Endovitskii D.A., Lubkov V.A., Sasin Yu.E. Analiz vliyaniya vnutrennikh i vneshnikh faktorov na uroven' delovoi aktivnosti organizatsii [Analysis of the impact of internal and external factors on the level of business activity of an organization]. Spravochnik ekonomista = Reference Book to Economist, 2006, no. 8, pp. 84–91.
9. Endovitskii D.A., Lubkov V.A., Sasin Yu.E. Sistema pokazatelei analiza delovoi aktivnosti khozyaistvuyushchego sub"ekta [A scorecard of business analysis of a business entity]. Ekonomicheskii analiz: teoriya i praktika = Economic Analysis: Theory and Practice, 2006, no. 17, pp. 2–12.
10. Endovitskii D.A., Lyubushin N.P., Babicheva N.E. Resursoorientirovannyi ekonomicheskii analiz: teoriya, metodologiya, praktika [A resources-oriented economic analysis: theory, methodology, practice]. Ekonomicheskii analiz: teoriya i praktika = Economic Analysis: Theory and Practice, 2013, no. 38, pp. 2–8.
11. Endovitskii D.A., Lyubushin N.P., Babicheva N.E. Finansovyi analiz [Financial analysis]. Moscow, KnoRus Publ., 2015, 256 p.
12. Endovitskii D.A., Shcherbakov M.V. Diagnosticheskii analiz finansovoi nesostoyatel'nosti organizatsii [A diagnostic analysis of financial insolvency of organizations]. Moscow, Ekonomist" Publ., 2007, 287 p.
13. Ionova A.F., Selezneva N.N. Finansovyi analiz [Financial analysis]. Moscow, Prospekt Publ., 2010, 623 p.
14. Kovalev V.V. Upravlenie denezhnymi potokami, pribyl'yu i rentabel'nost'yu [Management of cash flow, profit and profitability]. Moscow, Velbi, Prospekt Publ., 2008, 336 p.
15. Kovalev V.V., Volkova O.N. Analiz khozyaistvennoi deyatel'nosti predpriyatiya [Analysis of the economic activity of the enterprise]. Moscow, Prospekt Publ., 2010, 424 p.
16. Lyubushin N.P., Oparina O.I. Analiz obshchego i spetsificheskogo v ponyatiyakh “krizis”, “nesostoyatel'nost'”, “bankrotstvo” [Analysis of the general and specific in the terms of crisis, insolvency, bankruptcy]. Ekonomicheskii analiz: teoriya i praktika = Economic Analysis: Theory and Practice, 2007, no. 9, pp. 2–7.
17. Pozhidaeva T.A. Analiz finansovoi otchetnosti [Analysis of financial statements]. Moscow, KnoRus Publ., 2010, 320 p.
18. Finansovyi menedzhment [Financial management]. Moscow, Rid Grupp Publ., 2012, 800 p.
19. Sheremet A.D., Negashev E.V. Metodika finansovogo analiza deyatel'nosti kommercheskikh organizatsii [Methods of financial analysis of commercial organizations’ activity]. Moscow, INFRA-M Publ., 2003, 237 p.
20. Ekonomicheskii analiz aktivov organizatsii [Economic analysis of the organization’s assets]. Moscow, Eksmo Publ., 2009, 606 p.

View all articles of issue

ISSN 2311-8725 (Online)
ISSN 2073-039X (Print)

Journal current issue

Vol. 23, Iss. 3 March 2024

Archive