Subject The article deals with enterprise bankruptcy modeling with Russian companies as the target of the research. Objectives The aim of the study is to develop a methodology for assessing the financial stability of organizations operating in manufacturing industries. As the elements of the methodology, we considered the indicators playing a major role in the analysis of financial condition of a company. These indicators include the current liquidity ratio, quick ratio, liquidity ratio in fundraising, financial independence ratio (autonomy), equity ratio, and current assets to equity ratio. Methods For the empirical analysis purposes, we considered a number of manufacturing industry companies. In the course of the research, we collected 3,500 accounting statements of large and medium-sized companies for 2009-2013 from the SPARK database, including 500 bankrupts. The methodology of the study rests on statistical methods. To clarify liquidity ratios and financial stability standards, we have built a binary classification tree (CART - Classification and Regression Tree) and used the Gini coefficient. Results We have refined the standard value of indicators, which provided the basis for the proposed methodology. Depending on the values of various factors, we assigned companies to the appropriate reliability category. Conclusions Based on these results, we recommend companies to use the developed ratios to perform a routine financial analysis, forecast bankruptcy risk and make effective management decisions.
Keywords: financial stability, methods, forecasting, bankruptcy, manufacturing industry
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