The usefulness of financial instruments in assessing the bankruptcy risk of companies

Agnieszka Lisowska (), Tadeusz Waściński (), Jevgenijs Kurovs (), Marcin Szpernalowski () and Malgorzata Koszewska ()
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Agnieszka Lisowska: Warsaw University of Technology, Poland
Tadeusz Waściński: Warsaw University of Technology, Poland
Jevgenijs Kurovs: RISEBA University of Applied Sciences, Latvia
Marcin Szpernalowski: Warsaw University of Technology, Poland
Malgorzata Koszewska: Lodz University of Technology, Poland

Entrepreneurship and Sustainability Issues, 2023, vol. 11, issue 1, 191-208

Abstract: The research problem relates to modern enterprises' central dilemmas, which use existing financial instruments to assess the company's situation. Issues raised in this study involve identifying matters in the financial analysis of chosen companies listed on a stock exchange, the recognition of which may improve and heal the current economic situation. For this purpose, the document analysis and analysis methods were used. Documents contain financial statements of the researched enterprises, balance sheets and income statements included therein, and the conducted source analysis of contemporary subject literature of economics, finance and statistical studies. Studies on assessing the financial situation of the researched companies were carried out according to the following structure: preliminary analysis of financial statements, preliminary analysis of balance sheet, preliminary analysis of income statement, preliminary analysis of cash flow statement, ratio analysis of financial statements, working capital and financial liquidity ratios, efficiency ratios, debt and debt sustainability ratios, capital market ratios. The article ends with the financial condition improvement recommendations. This study may be used in similar scientific publications and teaching materials, or enterprises can use it to recognize ineffective areas. It also can be used to assess the effectiveness of the early warning model.

Keywords: stock exchange; economic analysis; financial analysis; early warning models (search for similar items in EconPapers)
JEL-codes: G17 G33 L61 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ssi:jouesi:v:11:y:2023:i:1:p:191-208

DOI: 10.9770/jesi.2023.11.1(11)

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