DIAGNOSIS OF FINANCIAL DIFFICULTIES IN BUSINESS

Abstract

In today’s rapidly changing economic and financial market conditions, the goal of every entrepreneur is to remain stable and profitable. However, when operating in modern conditions, everyone faces certain financial difficulties. Therefore, in order to ensure the continuity of operations, maintain profitability and stability, managers need to constantly monitor ongoing processes, study financial indicators that would allow timely identification of the causes of emerging financial difficulties and help make adequate, correct decisions to eliminate them. The conducted researches are usually aimed at the diagnosis of bankruptcy, insolvency, financial exhaustion or financial difficulties, which is relevant for certain target groups, e.g. for organizations organizing leisure services, leasing companies, small and medium-sized companies, etc. For this reason, it is difficult to adapt the created models to another group of organizations, for example, entities conducting business in the manufacturing industry, since this activity is very specific. In scientific literature Stoškaus, Beržinskienės, Virbickaitės (2007), Dinterman, Katchova, Harris (2017), Tamošaitienės, Juškevičienės, Kriščiukaitienės, Galnaitytės (2010), Sun, Li, Zhang (2009), Mackevičiaus, Silvanavičiūtės (2006), Zinkevičiūtės (2011), Jocytės (2012), Budrikienės, Paliulytės (2012), Trušakova (2010), Jakimuk, Žigienė (2011), Grigaravičius (2002), Charitou, Neophytou, Charalambous (2004), Hu, Sathye (2015) et al. a number of problems of diagnosing financial difficulties are presented, such as: what indicators signal impending financial difficulties; which model for diagnosing financial difficulties is the most reliable for certain economic activities; which indicators to include in the model, and which statistical or artificial intelligence model to apply. Research problem – the analysis of the scientific literature allows us to say that researchers pay a lot of attention to the analysis and improvement of models for diagnosing financial difficulties and bankruptcy, but which model for diagnosing financial difficulties is the most suitable for entrepreneurs engaged in tourism and economic activities? The object of the study is the diagnosis of financial difficulties in a theoretical aspect. The purpose of the study is to determine the diagnosis of financial difficulties for those running a business after analyzing the factors that lead to the concept of financial difficulties. Research tasks: To examine the interpretations of the concept of financial difficulties used in scientific literature; Introduce the conditioning factors. Research methods: logical and comparative analysis and synthesis of scientific, periodical, normative, legislative and methodological literature, as well as graphic representation, statistical analysis of quantitative data.