Khadri Nadjib
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Does neglecting the instruments of financial failure play a role in the bankruptcy of companies?
Accounting and Financial Control Volume 4, 2022-2023 Issue #1 pp. 63-72
Views: 250 Downloads: 55 TO CITE АНОТАЦІЯCorporate financial analysis tools are an important factor in corporate efficiency. Low-quality accessories for corporate financial analysis tools really brutally violate the interests of shareholders and can lead to the collapse of the business. The paper examines the development of models for predicting financial crises and compares the capabilities of existing models that can help alert management to current activity regarding an economic decision to buy shares or make loans. In the example of the NCA RUIBA company, Kida and Sherrod models were considered for predicting the financial failure of a firm. Based on the results of the calculations, it can be noted that NCA RUIBA had a good financial position when calculating the indicators according to Kida’s model, and according to the calculated data of the Sherrod model, the organization relies on external financing through high-risk loans, which is associated with the growth of non-current liabilities, especially long-term and medium-term ones. The results suggest that although corporate financial analysis tools alone are not sufficient to accurately predict financial distress, they can increase the predictive power of financial indicators and macroeconomic factors.