Analysis of the probability of bankruptcyThe stable insolvency of the organization serves as the basis for detailed analysis. The purpose of such an analysis is to identify the reasons for the deterioration in the financial condition of the organization and the possibilities for getting out of the crisis. Since March 1998, the Federal Law "On Insolvency (Bankruptcy)" has been enacted in Russia. Insolvency (bankruptcy) is the debtor's inability recognized by the arbitration court or the debtor's inability to fully satisfy the creditors' claims for monetary obligations and (or) fulfill obligations to pay mandatory payments. Bankruptcy of the organization does not occur at one time, it can be caused by a combination of various external and internal factors. Causes of bankruptcy Internal causes of the emergence of the situation of insolvency of the organization include:
- Inability to foresee the probability of bankruptcy;
- Decrease in sales volumes due to poor study of demand, lack of a clear marketing policy;
- Decrease in production volume;
- Decreased product quality;
- Unjustifiably high costs in the organization;
- Low profitability of products;
- Long production cycle;
- High level of debts to creditors and the existence of mutual non-payments;
- Ineffective management of the company's production and financial activities by management.
Diagnosis of bankruptcy Modern economic science has in its arsenal a large number of various methods and techniques for forecasting the financial state of the organization from the perspective of possible bankruptcy. There are three main approaches to forecasting bankruptcy:
- Calculation of solvency indices;
- Use of a system of formalized and non-formalized criteria;
- Evaluation and forecasting of indicators of the balance structure's adequacy.