Model analysis to identify companies approaching bankruptcy

Natalia V. Kuznetsova
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Natalia V. Kuznetsova: Baikal National University

Economic Consultant, 2023, vol. 4, issue 4, 55-67

Abstract: Introduction. The article is relevant because the number of company bankruptcies increased, especially in capital-intensive industries such as construction. This creates the need to develop and apply effective methods for the early detection of financial problems, which makes the topic particularly relevant. The article aims to analyze models for identifying companies approaching bankruptcy. Materials and methods. The materials were articles in peer-reviewed journals on finance and economics devoted to the analysis of financial ratios and bankruptcy prediction. Research methods included calculating financial coefficients based on financial reporting data and statistical analysis. Results. A primary duty of an arbitration administrator in the insolvency (bankruptcy) procedure is to conduct a financial analysis of the debtor’s activities. The study of the debtor’s financial condition was carried out by the approved Rules for performing financial analysis by the arbitration administrator using the coefficient method of economic analysis. The analysis results can be used to substantiate the possibility or impossibility of restoring the debtor’s solvency, and the expediency of introducing subsequent procedures used in bankruptcy proceedings. Conclusion. With the development of technologies such as machine learning and big data, new opportunities are opening up for deeper and more accurate analysis of financial ratios. This allows us to develop more complex bankruptcy prediction models, which makes the topic relevant for researchers and practitioners. The prospects also lie in the possibility of integrating the analysis of financial coefficients with other methods, such as the analysis of external factors (economic, political, social) and qualitative analysis.

Keywords: bankruptcy; arbitration manager; financial analysis; coefficient method (search for similar items in EconPapers)
JEL-codes: G33 (search for similar items in EconPapers)
Date: 2023
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