Analysis and Control of Bankruptcy and Reorganization Processes: Case Studies Using Accounting Data

George Abuselidze,Anna Slobodianyk

doi:10.1051/e3sconf/202016409036

Abstract

The article is devoted to the justification and development of recommendations for improving the use of accounting data for the analysis and control of bankruptcy and reorganization processes of enterprises. It is determined that in conditions of financial and political instability, the activities of enterprises are accompanied by crisis situations, which may result in insolvency or bankruptcy. The peculiarities of processes of bankruptcy and reorganization of enterprises, using the methods of economic analysis, analysis of financial state and efficiency of the investigated company, as well as evaluated the effectiveness of the use of accounting data for analysis and control of processes of bankruptcy and reorganization of enterprises. Overview of cases in business practice for which the company is liquidated. The state and volume of activity of the basic enterprise in the context of the main indicators of financial statements for the last three years are analyzed. As a result of the analysis of the enterprise, it is proved that LLC Agrocomplex is profitable, with positive growth trends for most of the main indicators of economic activity. To identify signs of a crisis, the company assessed the threat of bankruptcy based on rapid diagnostics. The authors proved that the two-factor model for assessing the probability of bankruptcy of an enterprise shows that the probability of bankruptcy for LLC Agrocomplex is very low. The authors prove that when analysing the financial condition of an enterprise, a situation may arise when some indicators of the discriminant model for a particular enterprise may be very low compared to their “normal” values, and others - on the contrary, too high, which is also “bad". It is proved that their combination can indicate a stable financial condition of the enterprise, since it is the calculation of one integral indicator based on all input factors at the same time.

Highlights

Today, the work of many, even promising, companies is hindered by huge accounts payable to suppliers, the budget, and the workforce
Bankruptcy is a consequence of a deep financial crisis, a system of management measures that did not lead to positive results
A financial crisis is understood as an imbalance in the company's activities and limited opportunities for its influence on financial relations

Summary

Introduction

The work of many, even promising, companies is hindered by huge accounts payable to suppliers, the budget, and the workforce. The instability and crisis state of the economy negatively affects all spheres of public and economic life in Country. This period is characterized by a significant decline in production, depreciation of the national currency and a decrease in demand for products. All of the above has a negative impact on the activities of individual enterprises, most of them become insolvent and go into a deep crisis This situation requires solving the problems of individual enterprises at the state level by using the institution of bankruptcy. The cause of a particular risk situation is understood to be some condition that causes tension Sources of such tension can be: directly economic activity; activity of the enterprise itself; lack of information about the state of the environment that affects the final result. In Ukraine, the number of insolvent enterprises is steadily growing

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