Cycle length collection of receivables and inventory turnover in companies for three years before the bankruptcy court (Dlugosc cyklu inkasa naleznosci i rotacji zapasow w przedsiebiorstwach na trzy lata przed sadowym ogloszeniem upadlosci)

Pawel Antonowicz ()
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Pawel Antonowicz: Katedra Ekonomiki Przedsiebiorstw, Wydzial Zarzadzania, Uniwersytet Gdanski

Problemy Zarzadzania, 2011, vol. 9, issue 31, 53-71

Abstract: The article presents the results of changes in cycle length collection of receivables and inventory turnover in the three years before the bankruptcy of enterprises. Analyzed were a total of 128 economic entities, whose bankruptcy proceedings took place in the years 2003-2010. The results of the study indicate that on average one year prior to bankruptcy, the companies are able to effectively vindicate their claims every 99 days. This means that those companies, having difficulties in enforcing their claims, consequently themselves become insolvent debtors. By way of a chain reaction they plunge other companies, which are further links the business processes. The tested entities with the approach toward bankruptcy also lengthen the average cycle of rotation of stocks, which, on the average of one year prior to bankruptcy, are kept in stock for 64 days. This situation is a consequence of making mistakes at the operational management level of bankrupt companies. Ongoing monitoring and conscious interpretation of the indicators of the financial analysis, discussed in the article, can be an effective optimization tool to monitor and manage enterprise assets area.

Date: 2011
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