Bankruptcy: Nature of Emergence, Diagnostic Problems

Abstract

The study focuses on an assessment of the bankruptcy’s probability. In the economic analysis the universal nature of emergence of company’s bankruptcy and decline in its solvency had not yet been studied carefully. The existing analytical mechanism has variety of estimation models, but does not have the same degree of diversity among methodological approaches. The models considered have a single etiology, differing by private elements of the structure and coefficients. In recent years in Russia, the problem of bankruptcy has increased and acquired high growth rate. An insolvency of companies is systemic and becomes the new part of country’s economic reality. Therefore, this article contains the background of setting up the universal mechanism to estimate company’s risk of bankruptcy. As a result, there is formed the background to create a universal system for assessing the probability of bankruptcy. Moreover, there is increased the role of operational data in the analysis that is specific to each organization. It shows the case for forming clear algorithm for assessing the probability of bankruptcy on the basis of constant monitoring of the financial condition, combined with the calculation system assessment in relation to payment breaks and the complex evaluation of the coefficient system.