Occurrence Of Bankruptcy Research Articles

ANALYSIS OF THE POSSIBILITY OF BANKRUPTCY IN MEDIUM-SIZED AGRIBUSINESS COMPANIES IN AP VOJVODINA

In the context of a volatile economy marked by diverse global crises, it becomes imperative to proactively assess the potential insolvency among economic entities. This study focuses on medium-sized companies involved in agricultural and food production within the AP Vojvodina, spanning the time frame from 2018 to 2022. The primary objective is to assess the likelihood of bankruptcy within the observed companies, applying Altman’s modified Z score (Z’), Kralicek Quick test and the Springate model. The data utilized for this research are sourced from the financial reports of the observed companies. Based on the performed analysis, it can be concluded that the modified Altman’s Z’ score and the Springate model in most cases gave identical results on the occurrence of bankruptcy. Using the Kralicek Quick test, the solvency ratings are quite divergent. In the observed period, the possibility of bankruptcy was higher for agricultural companies compared to ones from the food industry.

Profitability moderate the effect of operating capacity and intellectual capital on financial distress

Financial distress is the stage of declining financial conditions experienced by the company before the occurrence of bankruptcy or liquidity. This study aims to examine the effect of operating capacity and intellectual capital on financial distress with profitability as a moderating variable. The population in this study are property and real estate companies listed on the Indonesia Stock Exchange. The sample in this study amounted to 12 property and real estate companies during the 2016-2020 period. Sampling using purposive sampling method. The analytical tools used in this research are multiple linear analysis and Moderated Regression Analysis (MRA). Based on the results of the study, it shows that operating capacity has a positive effect on financial distress, intellectual capital has a negative effect on financial distress, profitability can moderate the effect of operating capacity on financial distress and profitability cannot moderate the influence of intellectual capital on financial distress.

Financial Ratio Analysis to Predict The Potential of The Company’s Financial Distress With Altman Z-Score Method at PT Bali Kulina Utama

Identification of potential financial distress in a company is an important step in predicting the company’s financial health condition. Financial distress conditions can occur before the company goes bankrupt which is marked by a decline in company finances. To deal with these conditions, the company is expected to be able to prepare a strategy to anticipate the occurrence of bankruptcy by analyzing financial ratios. This study aims to calculate, analyze, and classify the potential of financial distress at PT Bali Kulina Utama through financial ratios with the prediction model used is Altman Z-Score Modification method. Primary and secondary data obtained through interviews and documentation data collection techniques. The data analysis technique is descriptive qualitative by calculating each financial ratio that contained in the Altman Z-Score Modification model and calculating the Z-Score Modification equation to predict financial distress position. Based on the results, it can be concluded that the potential of financial distress at PT Bali Kulina Utama in 2018-2020 is in a non financial distress condition, because the Z-Score Modification equation value is in Z”-Score > 2,6.

PREDIKSI KEBANGKRUTAN PADA BANK BUMN YANG TERDAFTAR DI BURSA EFEK INDONESIA

The research was conducted with the aim of knowing the prediction of the potential for bankruptcy of the four State-Owned Enterprises (BRI, BNI, Bank Mandiri and BTN) using the Altman Z-Score, Springate and Grover G-Score models. The data analysis method used a prediction model for the occurrence of bankruptcy consisting of the Altman Z-Score, Springate and Grover G-Score. The results showed that the prediction of bankruptcy (financial distress) using the Altman Z Score model was obtained from 2015-2019 for the four State-Owned Enterprise Banks (BRI, BNI, Bank Mandiri and BTN) as a whole obtained Z Score between 1.42-1 88 or at the criteria (cut off) Z <181 has the potential to go bankrupt and 1.81 <Z <2.99 gray area. Meanwhile, based on the Springate model from 2015-2019, the four State-Owned Enterprises (BRI, BNI, Bank Mandiri and BTN) overall obtained a Springate of 1.95 - 44.08 and were in the criteria (cut off) S> 0.862 and can be declared as not potentially bankrupt (healthy). Then based on Grover, it was obtained from 2015-2019 in the four State-Owned Enterprise Banks (BRI, BNI, Bank Mandiri and BTN) as a whole obtained a G Score of 1.71 - 2.15 and were in the criteria of G ≥ 0.01 or no potential bankrupt (healthy). The results showed that the Altman Z Score model has a better value than Springate and Grover because the number of ratios is more so that it can predict bankruptcy better

Faktor-Faktor yang Mempengaruhi Financial Distress: Pendekatan Model Springate dan Grover (Studi Empiris pada Badan Usaha Milik Negara Periode 2015-2019)

Financial distress is a condition in the stage of financial decline that occurs before the occurrence of bankruptcy or liquidation. This study aims to examine the factors that affect financial distress in State-Owned Enterprises (BUMN). The independent variables tested were managerial compensation, working capital, investment growth, operating cash flow, and leverage. Financial distress in this study was measured by the springate method and the grover method. This study selects the sample by purposive sampling method. With the final result as many as 58 samples for 6 years of observation. Research data for the period 2014-2019 was analyzed using multiple linear regression analysis. The results showed that the working capital and leverage variables had an influence on financial distress. Managerial compensation, investment growth, and operating cash flow have no effect on financial distress.

Extended Black and Scholes model under bankruptcy risk

In the Black-Scholes system, the underlying asset price model follows a geometric Brownian motion with constant volatility and no occurrence of bankruptcy. These two characteristics contradict real financial observations. In order to agree with the nonconstant feature of the volatility and take bankruptcy risk into consideration, we modify the Black and Scholes model and propose a new model based on the efficient market hypothesis. First, we present some probability properties of the bankruptcy risk by our model and demonstrate the statistical inference for the unknown parameters. We also study the European option pricing problem and propose its statistical computation method. In addition, via a real data analysis, we show that our model captures the trend of the stock prices much better than geometric Brownian motion and clarify that the bankruptcy is a crucial factor to be considered in the Black-Scholes system.

Veiklos auditas kaip ekspertizė tyčinio bankroto bylose

[only abstract in English; full article and abstract in Lithuanian]
 The article focuses on the performance audit as forensic examination in intentional bankruptcy problems experienced by the Lithuania. One of possible areas of performance audit expansion is a forensic examination, which is backed by various similarities – qualification requirements, the type of work being done by the expert/auditor, as well as it also taps into the essence of performance audit: to assure the effectiveness (which in this type of application is expressed via efficient litigation process).
 Since performance audit does not have the time proven place in civil proceedings, this article strives to bring attention of scientists and practitioners to the possibilities of application of performance audit as a forensic examination in the process of intentional bankruptcy. Cases of intentional bankruptcy are specific by its origins due to the circumstances of occurrence of bankruptcy itself: because it is intentional, financial statements of legal entity might not be indicating mala fide, therefore, financial audit might not be capable of detecting the inappropriate actions of management. Performance audit might become a key to solving this deficiency.
 This article utilises analysis of scientific literature as well as available (current and historical) court practice in Lithuania, seeking to provide an insight into – not only theoretical, but also practical –advantages that can be gained from performance audit examination in intentional bankruptcy cases.
 By interpreting, the law and analysing the content of the court decisions, the conclusion is being made that with the condition of proper qualification assurance performance audit examination might speed up the proceedings of the intentional bankruptcy and provides qualified factual evaluation for the court, hence making litigation process more efficient. It could also save time and expenses for both – court system (hence – the State) and involved parties. It would also help increase public trust and reliability of judicial system and its capability to effectively restore the clarity of economic relations between parties involved.

하이브리드 인공신경망 모형을 이용한 부도 유형 예측

The prediction of bankruptcy has been extensively studied in the accounting and finance field. It can have an important impact on lending decisions and the profitability of financial institutions in terms of risk management. Many researchers have focused on constructing a more robust bankruptcy prediction model. Early studies primarily used statistical techniques such as multiple discriminant analysis (MDA) and logit analysis for bankruptcy prediction. However, many studies have demonstrated that artificial intelligence (AI) approaches, such as artificial neural networks (ANN), decision trees, case-based reasoning (CBR), and support vector machine (SVM), have been outperforming statistical techniques since 1990s for business classification problems because statistical methods have some rigid assumptions in their application. In previous studies on corporate bankruptcy, many researchers have focused on developing a bankruptcy prediction model using financial ratios. However, there are few studies that suggest the specific types of bankruptcy. Previous bankruptcy prediction models have generally been interested in predicting whether or not firms will become bankrupt. Most of the studies on bankruptcy types have focused on reviewing the previous literature or performing a case study. Thus, this study develops a model using data mining techniques for predicting the specific types of bankruptcy as well as the occurrence of bankruptcy in Korean small- and medium-sized construction firms in terms of profitability, stability, and activity index. Thus, firms will be able to prevent it from occurring in advance. We propose a hybrid approach using two artificial neural networks (ANNs) for the prediction of bankruptcy types. The first is a back-propagation neural network (BPN) model using supervised learning for bankruptcy prediction and the second is a self-organizing map (SOM) model using unsupervised learning to classify bankruptcy data into several types. Based on the constructed model, we predict the bankruptcy of companies by applying the BPN model to a validation set that was not utilized in the development of the model. This allows for identifying the specific types of bankruptcy by using bankruptcy data predicted by the BPN model. We calculated the average of selected input variables through statistical test for each cluster to interpret characteristics of the derived clusters in the SOM model. Each cluster represents bankruptcy type classified through data of bankruptcy firms, and input variables indicate financial ratios in interpreting the meaning of each cluster.

The Choice between Informal and Formal Restructuring: The Case of French Banks Facing Distressed SMEs

This paper investigates the determinants of the arbitration taking place after a corporate defaults. Two ways of resolving financial distress are conceivable: either the creditors privately renegotiate with the debtor, or a formal bankruptcy procedure is triggered. This arbitration depends on the legal context and, more specifically, on the national bankruptcy code. We use original data coming from the recovery units of five French commercial banks. Our sample gathers 735 credit lines allocated to 386 distressed companies.We test four hypotheses. Hypothesis H1 proposes that bargaining power imbalances may have more impact on the arbitration than simple coordination failures, especially under court-administered legislation. Hypothesis H2 suggests that, to initiate the process of renegotiation, a bank needs information on the project’s profitability and on the managers’ reliability. To reach an agreement, the bank must ensure that both the conditions have been met. Hypothesis H3 predicts that the likelihood of renegotiation increases with the bank’s financial involvement. Hypothesis H4 focuses on the level of collateralization: when the bank has inclination for liquidation, collaterals may increase the occurrence of bankruptcy, provided the law facilitates such liquidation and preserves the bank’s priority.For testing the hypotheses H1 to H4, we use sequential LOGIT modeling to split between the variables explaining the decision to engage (or not) renegotiation and the variables explaining the success (or the failure) of renegotiation. Regarding H1, we find that even a court-administered procedure may not be dissuasive provided that the bank’s bargaining power is strong enough. Regarding H2, we show that the profitability of the project and the reliability of the managers are two essential conditions for avoiding bankruptcy. However, it takes some time to discover them. Regarding H3, our estimates show that, when the lending is bigger and/or when the debt contract is longer, then the chances of renegotiation are higher, but this does not predict such renegotiation shall be successful. Last, regarding H4, we do not find any evidence that the level of collateralization influences the arbitration between renegotiation and bankruptcy.

Reducing the Probability of Bankruptcy Through Supply Chain Coordination

With the increasing interdependence among supply chain members, bankruptcy of a supply chain member may cause other member firms to get into financial difficulties. This paper investigates the methods for reducing the probability of bankruptcy through supply chain coordination. Based on the developed multiagent simulation model for a simple three-echelon supply chain, the effects of coordination mechanisms, such as information sharing (INS) and vendor-managed inventory (VMI), on reducing the occurrence of bankruptcy at each stage of the supply chain are examined. Simulation results show that such coordination mechanisms are effective in reducing the risk of bankruptcy. However, the key roles of these coordination mechanisms, e.g., the manufacturer in VMI and the retailer in INS, may be reluctant to cooperate since they gain less benefit or even suffer a loss from the coordination. Additional cooperation incentive measures, i.e., permissible delay in payment for INS and inventory subsidy for VMI, are thus proposed for the implementation of these coordination mechanisms, and simulation results confirm their validity.

The Impact of Stress on the Clinical Presentation of Melanoma

The impact of major life events on the clinical presentation of melanoma was determined in a retrospective case-control analysis. There was a significantly higher occurrence of divorce or marital separation and a significantly higher occurrence of bankruptcy or unemployment in the 5 years prior to the clinical presentation of 56 melanoma patients relative to an age- and sex-matched control group of 56 general surgical patients (p less than 0.01). There was also a higher occurrence of death of a spouse or immediate family member, although this difference was not statistically significant. Overall, 26 (46 percent) of the melanoma patients had major life crises in the 5 years prior to clinical presentation, and this was highly significant (p less than 0.01). We believe that major life stress has an impact on the clinical presentation of melanoma. Potential reasons for this difference are reviewed.