Estimating the Ukrainian companies’ financial potential and the probability of forced liquidation
-
Author(s)Volodymyr NusinovLink to ORCID Index: https://orcid.org/0000-0002-9293-2969
,
Liudmyla BurkovaLink to ORCID Index: https://orcid.org/0000-0002-2840-5785
,
Natalia ShuraLink to ORCID Index: https://orcid.org/0000-0001-6734-0550
-
DOIhttp://dx.doi.org/10.21511/imfi.17(2).2020.03
-
Article InfoVolume 17 2020, Issue #2, pp. 26-39
- Cited by
- 924 Views
-
123 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
The development of a global economy is impossible without economic ups and downs, which disrupt economic stability. The growth of the crisis in Ukrainian companies is no exception. In world practice, there are many methods for estimating the possibility of companies’ bankruptcy. At the same time, there are no methodological approaches to setting up the possible commencement of company’s liquidation during its bankruptcy. The article aims to develop a methodology for estimating the possibility of company’s liquidation due to the introduction of its bankruptcy procedure and to determine the financial potential of the company based on the Ukrainian economy. Statistical surveys about the activities of Ukrainian companies were conducted. Using a discriminant analysis, a four-factor model for estimating the possibility of companies’ liquidation undergoing bankruptcy was developed. An appropriate scale has been constructed to interpret the values obtained using the collective expert estimation method. The matrix method was applied to construct matrices of pairwise comparison for the results of qualitative assessment.
It has been proposed to assess the liquidation of a company by determining the conditional probability of such liquidation. A matrix of the pairwise comparison of the qualitative assessment results has been constructed for the company’s bankruptcy procedure commencement probability and that for the company’s liquidation procedure commencement. It has been substantiated that the level of the company’s financial potential is the reverse indicator of the probability value for the bankruptcy and the liquidation of that company. Matrices have been constructed that qualitatively assess probabilistic level of the financial potential both for the companies at the bankruptcy stage and for those whose bankruptcy procedure has not yet begun. The results of the testing confirm the correctness of the proposed methods and the expediency of their application.
- Keywords
-
JEL Classification (Paper profile tab)C51, D25, G33
-
References30
-
Tables8
-
Figures0
-
- Table 1. Scale to assess the corporate bankruptcy commencement probability based on the calculated value of the turnover period of the company’s current liabilities without taking into account the liabilities to that company’ affiliated persons that requi
- Table 2. Matrix of the pairwise comparison of the qualitative assessment results for the corporate bankruptcy commencement probability and the company’s liquidation procedure commencement probability
- Table 3. Matrix of the pairwise comparison of the qualitative assessment results for the probabilistic level of the financial potential and the bankruptcy procedure commencement probability
- Table 4. Matrix of the pairwise comparison of the qualitative assessment results for the probabilistic level of the financial potential and the company’s liquidation procedure commencement probability when the company is at the stage of bankruptcy
- Table 5. Matrix of the pairwise comparison of the qualitative assessment results for the probabilistic level of the financial potential, the corporate bankruptcy commencement probability and the conditional probability of the liquidation procedure commenc
- Table 6. Summary of the data regarding the bankruptcy commencement probability assessment conducted for the companies under research by external and internal users
- Table 7. Liquidation procedure commencement probability assessment for the Ukrainian shipbuilding and machine-building companies that are currently at the stage of bankruptcy, but whose liquidation procedure has not yet begun
- Table 8. Pairwise comparison of the qualitative assessment results for the companies’ bankruptcy procedure commencement probability and that for their liquidation procedure commencement
-
- Andrushchenko, O. Yu. (2011). Teoretyko-metodychni pidkhody do vyznachennia sanatsii ta sanatsiinoi spromozhnosti pidpryiemstva [Theoretical and methodological approaches to defining the sanitation and sanitation ability of the enterprise]. Efektyvna ekonomika – Effective economy, 5. (In Ukrainian).
- Antonets, M. V. (2015). Mekhanizm otsinky masshtabiv kryzovoho stanu pidpryiemstva [Mechanism for assessing the scale of enterprise’s crisis state]. Visnyk KNUTD – Bulletin of Kyiv National University of Technologies and Design, 2(85), 114-123. (In Ukrainian).
- Bahatska, K. V. (2005). Problemni pytannia vyznachennia sanatsiinoi spromozhnosti pidpryiemstv [Issues on defining the enterprises’ sanitation ability]. Derzhava ta rehiony. Seriia: Ekonomika ta pidpryiemnytstvo – State and Regions. Series: Economy and Entrepreneurship, 1, 56-62. (In Ukrainian).
- Bilokon, T. M. (2008). Orhanizatsiino-ekonomichnyi mekhanizm sanatsii pidpryiemstv tsukrovoi promyslovosti [Organizational and economic mechanism for sanitation of enterprises in sugar industry] (Extended abstract of candidate’s thesis). Kyіv: NNCz “IAE”. (In Ukrainian).
- Chalenko, N. V., & Senchenko, O. S. (2014). Shliakhy zabezpechennia finansovoi stabilnosti pidpryiemstva [Ways of ensuring the enterprise’s financial stability]. Formuvannia rynkovykh vidnosyn v Ukraini – Formation of market relations in Ukraine, 6(157), 135-139. (In Ukrainian).
- Datsenko, H. V. (2018). Audytorska otsinka ymovirnosti bankrutstva pidpryiemstv za umov finansovoi kryzy [Audit assessment of enterprises’ bankruptcy probability in the conditions of financial crisis]. Naukovyi visnyk Khersonskoho derzhavnoho universytetu – Scientific Bulletin of Kherson State University, 29(Part 2), 161-165. (In Ukrainian).
- Drobysheva, O. O., & Hiulnazarian, V. V. (2017). Stratehii upravlinnia pidpryiemstvom pid chas zahrozy bankrutstva [Strategies for managing an enterprise in crisis condition]. Ekonomichnyi visnyk Zaporizkoi derzhavnoi inzhenernoi akademii – Economic Bulletin of Zaporizhzhia State Engineering Academy, 5(11), 118-121. (In Ukrainian).
- Fuchedzhy, V. I. (2010). Kharakterystyka metodiv ta modelei diahnostyky kryzovoho stanu pidpryiemstva [Characteristics of methods and models for diagnosing the enterprise’s crisis state]. Menedzhment ta pidpryiemnytstvo v Ukraini: etapy stanovlennia i problemy rozvytku – Management and entrepreneurship in Ukraine: stages of establishment and problems of development, 691, 240-245. (In Ukrainian).
- Hlushchuk, O. M. (2011). Zarubizhni metody analizu ymovirnosti bankrutstva neplatospromozhnoho pidpryiemstva [Foreign methods for analyzing the probability of insolvent enterprise’s bankruptcy]. Problemy teorii ta metodolohii bukhhalterskoho obliku, kontroliu i analizu – Problems of theory and methodology of accounting, control, and analysis, 21, 87-95. (In Ukrainian).
- Ishchenko, M. I. (2014). Teoriia otsinky finansovo-ekonomichnykh rezultativ promyslovykh pidpryiemstv [Theory of assessing the financial and economic performance of industrial enterprises] (422 р.). Kryvyi Rih: Vyd. R.A. Kozlov. (In Ukrainian).
- Khryniuk, O. S., & Bova, V. A. (2018). Modeli rozrakhunku ymovirnosti bankrutstva yak metod otsinky finansovoho potentsialu pidpryiemstva [Models for calculating the bankruptcy probability as a method for assessing the enterprise’s financial potential]. Efektyvna ekonomika – Effective economy, 2. (In Ukrainian).
- Kiriliuk, R. P. (2013). Finansova kryza na pidpryiemstvi: faktory vynyknennia ta mekhanizm poperedzhennia [Financial crisis at the enterprise: factors of appearance and mechanism of prevention]. Ekonomika. Upravlinnia. Innovatsii – Economy. Management. Innovations, 1. (In Ukrainian).
- Kolyshkin, A. V., Gilenko, E. V., Dovzhenko, S. E., Zhilkin, S. A., & Choe, S. E. (2014). Prognozirovanie finansovoy nesostoyatelnosti predpriyatiy [Forecasting the financial insolvency of enterprises]. Vestnik Sankt-Peterburgskogo Universiteta – Bulletin of Saint-Petersburg University, 5(2), 122-142. (In Russian).
- Leskiv, S. R., & Semchuk, Zh. V. (2014). Systema indykatoriv otsiniuvannia finansovoho potentsialu pidpryiemstv [The system of indicators of evaluation of financial capacity of enterprises]. Ahrosvit – Agrarian world, 17, 40-42. (In Ukrainian).
- Linder, Ye. (2016). Evoliutsiia modelei otsinky ymovirnosti bankrutstva [Evolution of bankruptcy probability models]. Naukovyi visnyk Mykolaivskoho natsionalnoho universytetu imeni V. O. Sukhomlynskoho. Seriia: Ekonomichni nauky – Scientific Bulletin of Mykolaiv V.O. Sukhomlymskyi National University. Series: Economic sciences, 1, 125-129. (In Ukrainian).
- Lisnichuk, O. A., & Vynohradova, Ye. V. (2018). Modeli rozrakhunku ymovirnosti bankrutstva yak metod otsinky finansovoho potentsialu pidpryiemstva [Models of estimation of bankruptcy probability as a method of evaluation financial potential of the enterprise]. Naukovyi visnyk Mizhnarodnoho humanitarnoho universytetu. Seriia: Ekonomika i menedzhment – Scientific Bulletin of International Humanitarian University. Series: Economy and management, 33, 111-116. (In Ukrainian).
- Miroshnichenko, V. O. (2017). Rezervy posylennia finansovoho potentsialu ahrarnykh pidpryemstv [Reserves for strengthening financial potential of agricultural enterprises]. Naukovyi visnyk Uzhhorodskoho natsionalnoho universytetu. Seriia: Mizhnarodni ekonomichni vidnosyny ta svitove hospodarstvo – Scientific Bulletin of Uzhhorod National University. Series: International economic relations and world economy, 12(2), 24-28.
- Nusinov, V. Ya. (2016). Finansovyi analiz promyslovykh pidpryiemstv [Financial analysis of industrial enterprises] (511 р.). Kryvyi Rih : Vyd. R. A. Kozlov. (In Ukrainian).
- Nusinov, V. Ya. (2016). Otsenka stepeni tyazhesti finansovogo krizisa ukrainskih kompaniy [Assessment of the severity of the crisis of the Ukrainian companies]. East European Scientific Journal, 14(2), 81-88. (In Russian).
- Nusinova, O. V. (2011). Otsinka finansovoi bezpeky pidpryiemstv [Assessment of enterprises’ financial security] (192 р.). Kryvy Rih: Dionis (FO-P Cherniavskyi D.O.). (In Ukrainian).
- Nusinova, O. V. (2012). Osnovy otsinky ekonomichnoi bezpeky pidpryiemstv: teoretychni ta praktychni aspekty [Fundamentals of assessing the enterprises’ economic security: theoretical and practical aspects] (412 р.). Kyіv: TOV “PanTot”. (In Ukrainian).
- Ponomarenko, T. V. (2016). Prohnozuvannia ymovirnosti bankrutstva v konteksti otsiniuvannia ekonomichnoi stiikosti pidpryiemstva [Prediction of probability of bankruptcy in the context of evaluation of the enterprise economic sustainability]. Ekonomichnyi analiz – Economic analysis, 23(2), 160-168. (In Ukrainian).
- Ponomarenko, T. V. (2016). Systematyzatsiia pidkhodiv do otsiniuvannia ekonomichnoi stiikosti pidpryiemstva [Systematization of approaches to estimate the economic viability]. Naukovyi visnyk Khersonskoho derzhavnoho universytetu – Scientific Bulletin of Kherson State University, 16(3), 43-47. (In Ukrainian).
- Pustovhar, S. A. (2015). Otsinka finansovoho potentsialu vidnovlennia platospromozhnosti pidpryiemstv metalurhiinoi haluzi Ukrainy [Assessing the financial potential of renewing the solvency of enterprises in Ukrainian metallurgical industry]. Finansovo-kredytna diialnist: problemy teorii ta praktyky – Financial and credit activity: problems of theory and practice, 2, 87-96. (In Ukrainian).
- Rekova, N. Yu., & Andrushchenko, O. Yu. (2012). Metodychni pidkhody do otsinky sanatsiinoi spromozhnosti promyslovykh pidpryiemstv [Methodical approaches to assessing the sanitation ability of industrial enteprises]. Nauchnyy vestnik DGMA – DSMA Scientific Bulletin, 1(9Е), 312-320. (In Ukrainian).
- Rudyk, O. R. (2007). [Metodychne zabezpechennia antykryzovoi diahnostyky vitchyznianykh pidpryiemstv [Methodical support of national enterprises’ crisis diagnostics]. Visnyk Dnipropetrovskoho natsionalnoho universytetu zaliznychnoho transportu imeni akademika V. Lazariana - Dnipro National University of Railway Transport named after academician V. Lazarian, 18, 236-240. (In Ukrainian).
- Skrynkovskyi, R. M. (2015). Diahnostyka finansovoho, vyrobnychoho, trudovoho, sotsialno-ekonomichnoho ta innovatsiino-investytsiinoho potentsialiv i analiz potentsiinykh ryzykiv pidpryiemstva v umovakh nevyznachenosti [Diagnostic of the Financial, Industrial, Labor, Socio-Economic and Innovation and Investment Potentials and Analysis of the Enterprise Potential Risks under Conditions of Uncertainty]. Problemy ekonomiky – Problems of economy, 2, 186-193. (In Ukrainian).
- Sushko, V. I., & Pavliuk, T. S. (2014). Klasyfikatsiia modelei otsinky ymovirnosti bankrutstva pidpryiemstv [Classification of models for assessing the enterprises’ bankruptcy probability]. Ekonomika: teoriia ta praktyka – Economy: theory and practice, 1, 72-83. (In Ukrainian).
- Zaharov, V. K., Sevastyanov, B. A., & Chistyakov, V. P. (1983). Teoriya veroyatnostey [Theory of probabilities] (160 p.). Moscow: Nauka. (In Russian).
- Zaychenko, Yu. P., Rogoza, S. V., & Stolbunov, V. A. (2009). Sravnitelnyy analiz metodov otsenki riska bankrotstva predpriyatiy [Comparative analysis of methods for assessing the enterprises’ bankruptcy risk]. Systemni doslidzhennia ta informatsiini tekhnolohii – Systemic studies and information technologies, 3, 7-20. (In Russian).
-
An application of Altman Z-score model to analyze the bankruptcy risk: cases of multidisciplinary enterprises in Vietnam
Investment Management and Financial Innovations Volume 16, 2019 Issue #4 pp. 181-191 Views: 2287 Downloads: 2516 TO CITE АНОТАЦІЯThis study applied Altman Z-score model to assess the bankruptcy risk of a set of multidisciplinary enterprises of various types, mainly small and medium enterprises, with data taken from official financial reports of 180 enterprises in Soc Trang province. The binary logistic regression was employed to assess the impact of non-financial and financial factors on the bankruptcy risk of enterprises. The research findings showed that both the non-financial factors such as business area, types and size of the business, the educational level of managers and executors and other characteristics, and the financial factors (indicators) such as earnings before tax, net profit/equity ratio, earnings before interest and tax/total assets ratio, equity/total debt ratio, affect the bankruptcy risk of enterprises. Predicting the bankruptcy risk and measuring its determinants play an important role not only as an effective managing tool of the business, but also as evidence for policymakers to support the sustainable development of business.
-
Impact of determinants of the financial distress on financial sustainability of Ethiopian commercial banks
Kishor Meher 
,
Henok Getaneh
doi: http://dx.doi.org/10.21511/bbs.14(3).2019.16
Banks and Bank Systems Volume 14, 2019 Issue #3 pp. 187-201 Views: 1715 Downloads: 325 TO CITE АНОТАЦІЯThe study aims to investigate the impact of determinants of financial distress on financial sustainability of Ethiopian commercial banks. The balanced panel data of 12 commercial banks of Ethiopia have been taken for the study from 2011 to 2017. The research deploys Ordinary Least Square (OLS) Regression Model. The indicators of financial distress are bank’s specific internals and macro-economic factors. The proxies of financial sustainability are Return on Assets, Return on Equity, Financial Stability Index and Bank Soundness. The findings reveal that the Absolute Liquidity Risk and Net Income Growth are found to be positive and significant and Solvency Risk negative and significant in relation to Return on Assets. Asset Quality is found to be positive and significant and Solvency Risk negative and significant with respect to Return on Equity. The Asset Quality and Net Income Risk are positive and significant and Solvency Risk is negative and significant with relation to the Financial Stability Index. Absolute Liquidity Risk and Liquidity Risk are positive and significant and Credit Risk negative and significant with Bank Soundness. Free Cash Flow and Net Income Growth are essential for enhancing Return on Assets and Bank Soundness, and managing equity within the prudential norms could bring forth short-term financial sustainability of commercial banks. By lowering provisioning of loan loss, Growth in Net Interest Income and managing Solvency Risk could ensure financial stability to the banks, which in turn leads to financial sustainability. The study reveals that financial sustainability of banks is insulated from the exposures of systematic risks originating from macroeconomic factors.
-
Commercialization of innovations: peculiarities of sales policy at innovation active enterprise
This study investigates the management process of innovations commercialization and its essence. Nowadays, establishing and ensuring the efficiency of innovations commercialization process is an objective precondition that creates material values. It also creates new demand in the market, shifting the emphasis from the production of enterprises to various management fields, creates new ways of capital substitution and enhances the level of innovation activity profitability. The aim of the research is to analyze indicators and characteristics of implemented instruments of sales policy at innovation active enterprises in order to estimate the influence of sales policy parameters to innovation level. There are many factors and trends that motivate enterprises to search for new ways to ensure their competitiveness. Findings revealed that there is a need to develop new technologies that ensures the profitability growth and activities optimization through capital mobility into areas with higher productivity and profitability. Sales policy is a necessary precondition for operation performance and further development of enterprises. Sales policy parameters significantly affect the level of innovation activity of industrial enterprises. Each of sales policy tools has an individual impact on the enterprise activity dynamics and can have positive or negative effect.
