Bankruptcy prevention and crisis management on the example of 'Kirov Plant 'Mayak'
Contents
bankruptcy business
management plant
Introduction
.
Bankruptcy risk of Russian small businesses and methods its prevention
.1
Recognition Method of fictitious and deliberate bankruptcy
.2
Discriminant model diagnostics bankruptcy
.3
Bankrupt companies: the problem of predicting
.4
The main methods of preventing bankruptcy
.5
Anti-crisis management activities of enterprises
.
Analysis of OJSC "Kirov Lighthouse" on the subject bancruptcy
.1
General characteristics of OJSC "Kirov Plant "Mayak"
.2
Calculation of the probability of bankruptcy as a discriminant function
Introduction
Institute of insolvency (bankruptcy)
is an integral part of the legal system of some country with a market economy.
Issues related to the inability to pay the goods delivered, services rendered,
to return the money borrowed from loan shark, emerged almost simultaneously
with the emergence of commodity-money relations.its history, mankind has
studied the market and the possible patterns, it has learned to build various
models and improved. However, despite all the actions to market forecasting,
market research, this problem plagued humankind and now.'s no secret that the
market is constantly come and go all sorts of legal and natural persons engaged
in activities designed to profit from the use of property, sale of goods, works
and services. These market actors are constantly interacting, come in all sorts
of relationships. An integral part of the system of relationships is the
failure of one or more parties to fulfill their obligations, that this is the
entire business risk.the development and improvement of the system of
management, diversity of ownership, all legal systems lead to a very simple
conclusion - the debts must be paid. But how to pay the debts, what should be
done for the most complete performance of the obligations of the debtor - is
the most controversial issue.is believed that the word "bankruptcy"
came from medieval Italy (bankarupta), apparently formed from either the bank
broken, either from the bench broken (clients were turning the table on which
the unfortunate merchant to change money on the area or just
traded).implementation mechanism of bankruptcy practice of foreign countries
began with the time when the debtor's insolvency came as slaves to their
creditors. Over time, this loss of freedom gave way to public punishment. Began
to consider the degree of guilt of an insolvent debtor in accordance with the
specification of the quality characteristic or actions that led to this
result.law concept of "failure" applies only to merchants, so for
those non-trade occupations provisions on bankruptcy does not apply. In German
law may be the subject of any bankruptcy debtor ceased payments and covered by
the competition. In Sweden, there is responsibility of the debtor who commits
acts leading to insolvency, when it in any way deprive a substantial part of
its property, with the result that is either insolvent or significantly impairs
their ability to pay. In the U.S., the person against whom a bankruptcy, while
production is insolvent, and after a judgment may be declared bankrupt.Russian
legal history there are various definitions of the insolvency and bankruptcy.
Of greatest interest is the pre-revolutionary period, as the level of Russian
law at the time estimated highly enough.consider bankruptcy careless or
intentional infliction of harm insolvent creditors by reducing or concealing
property. That is, in order that the person was declared bankrupt, are
necessary aggravating circumstances. [6]modern Russian legislation the term
"insolvency" and "bankruptcy" of equal value (in this case
does not imply intentional fictitious bankruptcy). Apparently, this is not the
right approach, as the legal technique should take into account well-established
content phraseological systems and traditions of their legal use. Even if we
take into account the perception formed the word "bankruptcy", it
would be better to use a combination of the American version of insolvency and
bankruptcy.signs of bankruptcy legislation in various European countries are
insolvent, the increase in accounts payable, unprofitable transactions or use
of property. As the world practice, bankruptcy - the inevitable phenomenon of
any today's market, which uses the failure as a marketing tool of
redistribution of capital.the history of modern Russia from the beginning of
market reforms were adopted federal laws governing bankruptcy. The need to
improve bankruptcy law led to the adoption Federal Low №127 "On Insolvency
(Bankruptcy)" from 26.10.2002. The Act applies to all legal entities, with
the exception of state-owned enterprises, institutions, political parties and
religious organizations.(Bankruptcy) of enterprises refers to the arbitration
court recognized the debtor's inability to fully satisfy the claims of
creditors on monetary obligations and (or) to fulfill the obligation to make
required payments.Law specifies the following test for the bankruptcy of a
legal entity: the inability to satisfy the demands of creditors' and (or) to
fulfill the obligation to make mandatory payments if the relevant obligations
and (or) the obligation is not fulfilled them within three months from the date
when they are to be executed.new law does not specify the minimum amount of
monetary obligations and mandatory payments required to appeal to the tribunal
to declare bankrupt the organization. The composition and amount of monetary
obligations and mandatory payments required to initiate bankruptcy proceedings,
will be determined by the arbitral tribunal.state of the bankrupt companies
identified the above-noted features, to be distinguished.
• fictitious bankruptcy - a
deliberately false declaration enterprise having the opportunity to meet the
requirements of the purpose of misleading lenders to get them to delay or
deferred payment or discount the debt;
• deliberate bankruptcy -
intentional creation or increase of insolvency of the company manager or owner,
the damage caused by them to the enterprise for personal interests or interests
of other persons known incompetent business management.these cases, a measure
of responsibility for the admission of bankruptcy is established in accordance
with the Criminal Code of Russian Federation. Should not be used to temporarily
insolvent company measures of bankruptcy, because bankruptcy - an exceptional
measure in relation to the debtor, are not capable of overcoming the protracted
crisis of non-payments. [1] Based on this we can conclude that the bankruptcy
of the enterprise - this is strictly a certain state of insolvency, in which
its assets could be made recovery by creditors.
1. Bankruptcy risk of Russian small
businesses and methods its prevention
specifics of the domestic economy of
small businesses has an impact on the diagnosis of bankruptcy. More recently
(August 2008), the question of the risk of insolvency complicated crisis of the
world financial system.main purpose is to provide the results of a systematic
exposition and extract the essential guidelines.should primarily, to raise the
question: what exactly are we going to predict (forecast). It is believed that
the bankruptcy and insolvency in the enterprise - interchangeable. This is
false. Bankruptcy occurs together with an established insolvency of the debtor,
and the failure - the result of the impossibility of fulfilling the demands of
creditors current liabilities. Federal Law "On Insolvency
(Bankruptcy)" №127-FZ, which came into force on October 26, 2002., Pays
much attention to the prevention of bankruptcy.the legislator envisaged
measures are aimed, above all, to overcome temporary financial crisis. In case
of default, we can only speak of a time of economic crisis (a situation where
the material resources of the company are used inefficiently) and crisis
management (inefficient use of human resources, which often means low as
competence management and, therefore, inadequate management decisions
environmental requirements). It was only as a result of self-government or
self-serving assumptions above insolvency crisis acquires features
intentionally or fraudulent bankruptcy - an intentional criminal act.bankruptcy
is a case where the debtor declares himself bankrupt, but he has the ability to
satisfy the claims of creditors-create a full, that is, so this statement is
obviously false . Deliberate bankruptcy is that the head of the organization or
its founders in someone's personal or other interests deliberately make the
company insolvent. Both types of failures are bound by similar goal pursued in
bad faith by the debtor. Misleading lenders with an ax to grind, criminals can
get respite from creditors (installments) payments or tax relief, and at best
case for attackers and did convey liquid assets "friendly company"
significantly worsened the economic situation of the creditor.is assumed that
due to the substitution of the economic indicator "inconsistency"
legal term "bankruptcy" bankruptcy prediction methods, which are
designed to predict the different types of insolvency were not applicable in
cases of "unfriendly" the debtor to creditors., if not a huge number
of different models of diagnosis, then at least the integrated use will provide
a clear and objective index to make an unambiguous conclusion to the lender in
respect of the economic state of the future business partner. But the paradox,
none of the known methods are not able to give accurate information about the
condition or developmental disabilities study enterprises. Some relations
suggest bankruptcy, while others assure the financial stability of the
company.main reason for this discrepancy in the results was the same
"domestic specifics", which does not allow to use the tools of
financial statement analysis to Russian enterprises.for the inapplicability of
bankruptcy prediction models are not so much. F First, small business enterprises
in most cases opaque.. Such companies often lack competent financial
accounting, which excludes an objective assessment of the financial and
economic activities. Second, this special tax regimes. For example, according
to the Tax Code of the Russian Federation (TC) for a number of organizations
provided the simplified tax system (STS). In this case, a complete statistical
monitoring of the financial status of a simplified tax system is impossible,
since the object of the analysis will be two lines: income and expenses.
Organizations that use the simplified taxation system listed above set of
models to predict bankruptcy will be untenable. Third, it is an opportunity for
small businesses in completing the balance sheet and income statement to
reflect the data only for groups of articles without further explanation.. An
essential object of predicting the risk of bankruptcy is the financial
statements of the enterprise. But consumers of financial information companies
can use various sources of its receipt. For the financial manager of the
business, as well as for the owner, to make an accurate prediction, and thus
reduce the risk due permissibility and all-sufficient background information
does not present any difficulty. For counterparty (the creditor), the situation
is the opposite - the study or analysis of materials monitoringa1 diagnosis
verge of bankruptcy occurs, with limited or no information., the current state
of accounting, which allows the entrepreneur does not display incoming key
financial indicators of the company, making the task of predicting the risk of
bankruptcy of the traditional models applied to domestic practice
impossible.main drawback of existing models to predict the risk of bankruptcy -
their dependence on a large number of incoming targets. Each indicator is a
function of a large number of parameters, and a small change (or lack thereof)
implies completely distorted result. The result is the ability to manipulate
the values of parameters [2].
.1 Recognition Method of fictitious
and deliberate bankruptcy
on practical results, the analysis
of Russian companies - the "gray bankrupt" can assume a number of
signal points, clearly indicating the real financial position of the future
financial partner. The proposed method for recognition of fictitious and
deliberate bankruptcy is in development and in addition Interim validation
rules liquidator signs of fake and deliberate bankruptcy. In the analysis of
the following actions:
. Search for signs of deliberate
bankruptcy through visual examination of the complex accounting. Detection
inconsistencies and violations of the treaty, and other primary documents.
Documents that many inconsistencies, includes not only signs of deliberate
bankruptcy, but the presence of large amounts of abuse by an organized group of
people interested in the liquidation of the enterprise, in order to avoid
liability.
. Calculation of the index of
financial integrity (Cif)are the factors that will be the signal for the
calculation Cif: 1) total balance, and 2) the authorized capital, and 3) the
rate of the Central Bank of the Russian Federation, and 4) the period of
financial statement analysis, and 5) wages, and 6) the number of employees
working in the enterprise, and 7) organization's life cycle, 8) leases. These
indicators have an unquestionable advantage - they are always available, their
presence is fixed by the legislator, and some of them can be obtained from
government policy. Thus, the lender along with the owner of the company gets
investigated same sufficiency financial instrument for the analysis of the
bankruptcy risk of the latter.the balance. Or balance sheet. Or total assets.
Practical activities of the company in the aggregate is expressed, above all,
money, taxes, the budget, financing and investment. In part, this is - the
result of economic activity, expressed in resources controlled enterprise.
Displayed by the company itself, not only through appropriate rules and orders
of the state.capital. Financial entity authorized capital - in a continuous
redistribution of money form of value, and their reproduction. Distribution
begins to appear on the stage of the creation of authorized capital and ongoing
business activities in a commercial structure. The main source of capital acts
working capital (or part) of the founders, shareholders. Proper application and
use of capital contributes to the successful formation of equity management.
The greater the value of equity (at constant capital), the greater the
financial resources of the company, the more efficient movement of value and
higher capitalization of the company is. As its own, the registered capital
should be shown on the balance sheet. Legislator established a uniform size of
the original property of the foundation of society, guaranteeing the rights of
the creditor - the parties interested in the objective assessment of business
risks. The provisions of Article 26 of the charter capital secured the
Companies Act, Art. 14 of the Federal Law №14-FZ and commit to provide the
authorized capital of no less than 100 times the amount of the minimum wage. It
remains to find a certain satisfaction, which in most part will determine the
amount of equity capital of the organization, to provide
"self-expansion" originally advanced the cause of the cost. This problem
is partially solved by bringing to account other indicators - rate of the
Central Bank of Russia.of the Central Bank. The formation and use of financial
resources of almost all enterprises are inextricably connected with the
movement of the loan fund and a form of motion, as bank interest. With a lack
of background information (often its complete absence) more fully the principle
of "self-expansion" finance company will be responsible to use rates
of the Central Bank. It is known that the discount rate used to calculate the
tax base for certain taxes, interest and calculate a different percentage. This
option was included in the calculation of the risk of bankruptcy by analogy
with §5, Art. 65 of the Tax Code. Code requires organizations that have
received a tax credit due to the threat of bankruptcy, to pay interest on the
loan, based on the refinancing. Refinancing amount of the authorized capital,
the estimation of their own means of production, which in turn gives the right,
without recourse to the financial statements summarize the self-expansion of
the financial resources of the enterprise over time.of financial statement
analysis - the number of months in the period. The familiar 12-month deadline,
the only period for which the State Statistics Committee of Russia presents
statistical information on the finances of the organization. The choice period
substantiate typical small business uneven sales revenue, as well as the almost
complete lack of coincidence of the time, the cost of production over time,
implementation of production. This is especially the situation for
entrepreneurs in the agricultural sector.costs.growth of the economy is
directly related to the planning, monitoring and control costs. In foreign
practice is widely used technique which allows to track the progress of
operational planning dependence of financial results of the production costs
and sales volumes. Such an analysis allows us to trace the chain of indicators
"costs - sales - profit," said operational analysis. Various costs
behave differently depending on the economic activity of the enterprise.
Exposing this relationship, the lender is able to predict the risk of
bankruptcy, based on the theory of formation expenses management. If in the
general case, the calculation of variable costs for obvious reasons almost
impossible, the constant (fixed cost) and semi-variant costs amounting to
almost no change, and can be counted on the basis of statistics. Knowing the
value of fixed costs, the researcher can assume the force of impact of operating
leverage (GRA). For businesses, having to balance the relatively large number
of under-utilized fixed assets, high operating leverage power, is dangerous and
shows the high level of business risk business.known researcher of fixed costs
can include costs of the company on rent, pay for electricity, telephone and
wages. Is closest in meaning to the concept of "wages" living wage
working people. Procedure for calculating the cost of living is set by the Law
№134-FZ. Is selected as the factor, workers, members of the government and
members of society (if any) just can not be lower than the minimum set by
federal law.factor used in the calculations, the number of employees in the
company. In surveys, the organization - legal entities collecting information on
employment researcher holds the following categories of workers: the scheduling
of employees, external Combine and employees performing work under civil law
nature. Source of information on the number of payroll employees in settlements
in an average year are: card of the object registry and extract from the
Unified State Register of Legal Entities. Information on the number of
part-time and external employees performing work under the contract of civil
nature, is formed according to the current observation.assessing the bankruptcy
is particularly important factor in the life cycle of the organization. In
management theory the concept of "life cycle of the enterprise" to
determine the various issues that arise during the entire period of its development,
and thus evaluate its investment appeal. This statement implies a clear
dependence of the period of the life of the enterprise value of the profits.
One of the factors is based on the existing theory of audit in a similar
concept - "going concern assessment of the organization." From the
point of view of the auditor - an assessment that the entity continues as a
going concern, and he has no need to eliminate or significantly reduce the
activities and obligations will be repaid in due course. Binding evaluation of
bankruptcy risk to the life cycle of the evidence of stability, sustainability,
and perhaps about the economic growth of the enterprise. The longer a company
is on the market, the lower the probability of bankruptcy at any given moment.
In analyzing this factor, you can get information about the alleged sufficiency
of the organization to meet obligations and formation of resources for further
development. Date of registration provides a statistical business register in
the Russian State Statistics Committee Report Cards object register. The
average age of the life of small industry can be estimated on the basis of the
balance sheet on the date of registration.business (SB) in Russia is about 20
years. Since 1991, have repeatedly changed the criteria and conditions of
business for companies of this sector. Consequence - the difficulty in
analyzing the financial statements of key performance indicators of the
(IP).indicators to assess the RB - the result of the balance or the total
assets of the company, SC- share capital, RBR - the rate of the Bank of Russia,
A - Age of the company in years, W - wages, N - the number of employees in the
company, T - period analysis of the financial statements months, and R - rent,
FC - fixed costs per year. These factors characterize the state of the
qualitative aspects of small business, as well as a direct effect on an
indicator such as the probability of bankruptcy. The general formula for
determining the index of financial Cif particular would be:
= RB + { SC + (RBR
× A) + ((W × N) × T + R)}(1)
Cif = RB ÷ {SC
+ (RBR × A) + FC}.
this case, the scale of the risk
assessment of insolvency of the enterprise may be:
• If Cif < 0, the probability of
bankruptcy is high;
• If Cif ≥ 0, then the
probability of bankruptcy is equal to 0.5;
• If Cif > 0, the probability of
bankruptcy is low and decreases with increasing.problem can be solved only on
the basis of analytical procedures. This approach assumes that the transition
from the financial analysis, which considers only the last activity of the
organization, to the analysis, aimed at the future, the evaluation of possible
adverse effects in the organization. This approach complies with the concept of
the accounting and reporting for the medium term.construct an index of
financial probity sources of information support for the risk of bankruptcy is
proposed to use three documents: the balance sheet and profit and loss account;
card account register object presents statistical business register
(Stratregistr) as an extract from the Unified State Register.on the model
calculations showed that, although the method and gives a very rough estimate
of the probability of bankruptcy, its practical application is possible.are
some pretty effective forecasting techniques that are well suited for the
domestic business, it is this. [2]
.2 Discriminant model diagnostics
bankruptcy
order to reduce risk in
decision-making financial institutions developed countries are widely used
technology of formation, detection and recognition of economic phenomena. A
prerequisite of this approach is the assumption of the existence of indicators
that can not be observed directly, but can be estimated from the observed
several factors. For example, working capital, total assets, liabilities, net
income, etc. can define output indicators such as the risk of bankruptcy. For
the evaluation of the possibility of bankruptcy was the distribution companies
into two classes - the potential bankrupts (companies that went bankrupt
shortly after the declaration of the financial statements) and the
well-functioning of the company - to determine the inherent characteristics of
the classes and the specific values of the financial and economic
indicators.problem of forecasting bankruptcy, resolved Altman, based on 33
pairs of companies (bankrupt and stable companies) resulting in a linear
correlation equation funktsii2 that describes where the discriminant boundary
between these two classes of businesses.the construction of the discriminant
model diagnostics bankruptcy must select a number of the financial statements.
In an analysis of a selected combination of indicators and for each, the weight
in the discriminant function. Magnitude scales show a different impact on the
value of individual indicators efficient variable that in the integral
describes the financial condition of the company. The problem is to select a
set of indicators are those that will give the opportunity to make the most
significant conclusions regarding the potential financial condition of the
company.a criterion for the selection of indicators in the discriminant model
was chosen generalized discriminant criterion Wilks’s lambda Lw, characterizing
the degree of variation of the independent variables with their inter-group
comparison. For the purposes of discriminant modeling begging financial
performance, estrangement between the averages of the enterprises of different
groups of maximum and intra dispersiya4 - minimal. To ensure a clear separation
between similar groups of enterprises in the discriminant model best include
indicators with a minimum of Lw., to construct the optimal model using stepwise
selection method of the independent variables. It lies in the fact that on the
basis of comparison of different combinations of indicators and selected model,
which is characterized by the lowest value of Wilks’s lambda (the highest level
of classification accuracy), in the absence of multicollinearity in the set
outside factors. As a result, the algorithm selection of indicators for model
diagnostics bankruptcy consists of the following stages., on the basis of
available data from the financial statements of financially sound enterprises
and potential bankrupts count values of selected indicators
covering various aspects of operations. Although such important indicators as
profitability ratios and profitability were not included in the model because
they are calculated on the basis of the indicator "net income", which
for most businesses is zero. As for the coefficient of absolute liquidity, its
use has also been limited by the exhibiting companies in their reporting zero
readings "cash and cash equivalents". Due to non-borrowed funds in
most companies could not be widely used such factors as: cover debts equity,
concentration and the ratio of funds raised and equity.is followed by
calculation of t-tests between each pair of explanatory variables. These
calculations are compared to the table value of t-distribution for a given
level of dependence by checking the accuracy of the classification model with
data rates using the criterion Wilks’s lambda. As extra screening indicators in
the analysis of the model parameters will be reduced accordingly and the value
will change the degree of freedom. After sifting pairs of correlated indicators
inspect the remaining members of the factors to multicollinearity with the use
of F-test. After the exclusion of all the factors contributing to
the model multicollinearity, perform one more test set input variables using
the criterion χ2.
The analysis selected set of input
factors of the model, which cover all the main groups of indicators of
enterprises have a high ability to predict a possible bankruptcy and lack of
multicollinearity, which will ensure stable operation of the model. The result
is a model estimating the probability of bankruptcy as a discriminant function
on the basis of the set of explanatory variables (Table number 2):
= 0,033 • X1 +0,268 • X2 +0,045 • X3
- 0,018 • X4 - 0,004 • X5 - 0,015 • X6 +0,702 • X7 (2)
using a model (2) to assess the
financial condition of the company obtain the value Z, which is greater than
1.104, this is evidence of a satisfactory financial condition and the low
probability of bankruptcy.higher the value of Z, the more stable position of
the company. If the value of Z for the company was less than 1.104, there is
the threat of a financial crisis. With the decrease of the indicator Z
increases the probability of bankruptcy of the analyzed company. [3]
№2:
Independent evaluation of the
financial performance of state:
Index
|
Factor
|
Ratio
|
X1 X2 X3 X4 X5 X6 X7
|
Mobility assets Werewolves
payables Werewolves equity Return on assets Working capital Concentration of
capital raised Cover debts equity
|
Current assets / Non-current
assets Net income from sales / Current liabilities Net income from sales /
Equity Balance / net income from sales (Current assets - current liabilities)
/ Current assets (Non-current liabilities Current liabilities +) / Balance
(Non-current liabilities Current liabilities +) Equity / (Provision for
future expenses and payments + Long-term liabilities + Current liabilities) /
Balance
|
.3 Bankrupt companies: the problem
of predicting
major problem of bankruptcy
prediction is that the models that use cross-sectional analysis, based on the
assumption of stationarity in time of the bankruptcy processof nonstationarity
of the data used in forecast models, is the fact that the number of
bankruptcies increases dramatically during economic recessionsimprove the
predictive accuracy of the models, especially in the early stages of the
bankruptcy process, it is necessary to apply the transformation of financial
indicators and multivariate logitthere are many studies on the prediction of bankruptcy
of companies. To identify companies that are potential bankruptcy, the authors
of most studies tend to rely on the results of cross-sectional analysis of
their financial performance.major problem of bankruptcy prediction is that the
models that use a cross-sectional analysis, based on the assumption of
stationarity in time of the bankruptcy process. However, this assumption is
often violated, so often, these models allow us to classify the company after
they went bankrupt or non-bankruptcy. As a result, it is impossible to make an
accurate forecast of the future financial performance of the company.question
of non-stationary data have been directly investigated by R. Moyer. He applied
the model of Altman, based on the data on the companies for years 1946-1965.,
To classify companies according to data for 1973 he 1970. Initial accuracy of
the model Altman is 95%, dropped to 82%. When this model was tested on data
from 1965-1975., Its accuracy was 75%. Re-calculation of the coefficients of
the original model Altman on more recent data would enhance its accuracy to
90%.of nonstationarity of the data used in forecast models, is the fact that
the number of bankruptcies increases dramatically during economic recessions.
The authors of studies on the prediction of bankruptcy of companies, usually
come to the conclusion that the bankruptcy of companies do not arise suddenly,
usually preceded by a sufficiently long period of deteriorating, so it can
accurately predict at least three years of actual bankruptcy. But if it affects
only internal to the company are considered, it would be impossible to explain
the dramatic increase in the number of bankruptcies of companies during
retsessii7. One possible explanation for the unpredicted rapid growth is that
the bankruptcy model correctly identified only the most common internal
characteristics inherent weak companies. These characteristics indicate that
the status of the company is close to bankruptcy.actual bankruptcy and the
period over which it takes place, in addition to internal factors depend on
specific economic events (external to the company), which aggravate the
situation. This suggests that the predictive ability of even the most accurate
predictive models will be different at different periods of time as the external
economic environment is affecting the state of the company, changes with time.
Examples of such external macroeconomic factors may be inflation, interests
rates and availability of credit, the phase of the business cycle (recession,
elevation). As a result, different rates will be more or less important at
different times depending on what economic events trigger bankruptcy.in the
level of inflation may lead to higher production costs, which in turn lead to
higher prices for the products and reduce demand. Identify companies that are
sensitive to an increase in the rate of inflation, will help measures such as
stock levels, profitability, return on assets, capital intensity.periods of
high interest rates, or unavailability of loans, bankruptcy often caused by
excess of the cost of debt repayment profit from the sale. In this context it
is useful for the prediction of bankruptcy are indicators such as interest
coverage ratio, liquidity ratios, the value of accounts receivable, the amount
of long-term debt.times of recession, companies are going bankrupt who had not
accumulated sufficient reserves to survive the long sales decline. Bankruptcy
in these circumstances is caused by insufficient cash flow, lack of reliable
relations with creditors and higher-than-normal levels of accounts receivable
and inventory. The most useful for predicting bankruptcy in the recession are
factors such as capitalization8, net cash flows9, liquidity9, stockturn10,
accounts receivable turnover11., the addition to the model of macroeconomic
parameters can improve its predictive ability. In addition, there are other
approaches to improve the predictive accuracy, especially in the early stages
of the bankruptcy process. First, is the conversion of financial indicators,
such as average values are identified and trendy12 volatility13.
Second, conducted multivariate logit analysis, in which data for several years
prior to the bankruptcy to be used to predict not only the fact of bankruptcy,
but also determine the time when it happens. Third, you can increase the
accuracy of the models, if the analysis takes into account the difference
stages of the bankruptcy process.a typical bankruptcy process, characterized by
the deterioration of its performance. It is assumed that the analyzed company
is not a newly created (see Figure 1).line in Figure 1 illustrates the above
process is divided into four stages. The initial stage is characterized by a
partial reduction of certain financial ratios. However, the performance of the
company is no different from that of other successful companies, so the use of
statistical methods for the classification of companies do not bear any
results. This stage can be identified as a result of deteriorating, the
emergence of negative financial results. Negative differences observed
throughout the year, are often not large enough to significantly affect the
overall trend indicators. However, at the initial stage of bankruptcy can
improve the predictive accuracy of the models, if you include it in the
temporary difference indicators.to the initial phase of the next intermediate.
It is characterized by a slow decline, or neutrality of almost all financial
indicators. Indicators of the company at this stage will deteriorate
continuously, so the overall trend will be negative. Consequently, at the
intermediate stage of bankruptcy model accuracy is improved by including trend
indicators.the third (final stage) of the bankruptcy process is characteristic
deterioration of the company to a very low level. This means that the level of
financial performance at this stage is so low that they can be used to classify
the companies to "bankrupt" and "not bankrupt". At this
stage, the inclusion in the statistical model of the temporary differences and
trend indicators do not lead to a significant improvement in the accuracy of
forecasts.fourth stage of the process is final. Event that separates the third
stage of production from the fourth, is the publication of the last report to
the recognition of the bankrupt. At the end of the final stage performance of
the company deteriorated so much that it is insolvent. [5] From what we can
conclude:
the identification stage of the
bankruptcy process, there are two problems., the various companies of the
bankruptcy takes different amounts of time, so if the models as the dependent
variable, use the company's status (bankruptcy / non-bankruptcy), the different
time periods prior to the bankruptcy lead to poor predictive properties of the
model. Projection results improved when the dependent variable is used not
predicted status of the company (bankruptcy / non-bankruptcy), and the time
until the bankruptcy., the character of the bankruptcy process is different for
different companies. Lines 1, 2 and 3na figure illustrates three possible types
of bankruptcy. Line 2 describes the performance of the constant unsuccessful
company. They are low even for a few years before the bankruptcy. Line 3 is
characterized by abrupt bankruptcy process. The company shows good or excellent
results up to the third stage of bankruptcy, when there is a sharp drop in
performance.more different types of bankruptcy proceedings the companies
included in the analyzed sample of the lower predictive ability of standardized
models used in its various stages.identify the state of the company, as a rule,
are consistently applied models developed for different stages of bankruptcy.
The table shows the eight possible combinations of warning signals for
bankruptcy. "Plus" sign indicates that the application of the model
identified the warning signals of a possible bankruptcy. "Minus"
means that these signals have not been identified. [4]
№1:
Interpretation of results
|
|
Model based on the negative
temporary differences
|
Model based on a negative trend
|
Model based on financial
coefficients
|
|
Early warning signals (A few
years before the bankruptcy)
|
1
|
_
|
_
|
_
|
The company is not bankrupt
|
2
|
+
|
_
|
_
|
Initial stage of bankruptcy
|
3
|
+
|
+
|
_
|
The transition from the initial
stage to the intermediate
|
4
|
_
|
+
|
_
|
Recent alarms (Little time to
spare before the bankruptcy)
|
5
|
+
|
_
|
+
|
The transition from the initial
stage to the final stage of bankruptcy (of type 1)
|
6
|
_
|
+
|
+
|
Transition from the intermediate
stage to the final stage of bankruptcy
|
7
|
_
|
_
|
+
|
The final stage of the bankruptcy,
the company is constantly bad ranking
|
8
|
+
|
+
|
+
|
The final stage of the bankruptcy
(the company with critical low rates)
|
three, corresponding to the first
position of the table, testifies to the fact that it is not detected warning
signals of a possible bankruptcy. Plus three in the last eight positions of the
table show that the company is in the final stages of bankruptcy.conclusion, we
note that to improve the accuracy of predictive models of bankruptcy is
necessary, first, to draw attention to the impact of macroeconomic factors on
the company, and secondly, to take into account the difference stages of the
bankruptcy process to use the types of models in order to assess what stage of
bankruptcy is company, in the third, for the transformation of financial
indicators and multivariate logit analysis. [4]
.4 The main methods of preventing
bankruptcy
developed countries, the potential
bankrupts are washed out of scope before the official finding of this
"status." For example, in France, there is a special "system
alert", warning of economic partners about symptoms of the
"disease."monitoring bankruptcy of enterprises is formed at the macro
level data collection and calculation of state enterprises, the emergence of
bankruptcy allows you to diagnose, monitor trends and dynamics of change, and
on this basis to make better management decisions for the region and the
country as a whole.objective necessity of monitoring in this area is necessary
as previously used in planning and distribution methods of economic analysis
and forecasting almost stopped working. There was a need to establish an
adequate system of modern problems of studying and managing complex processes,
including the failure of businesses. This takes into account the experience of
many other countries in this field. It is very different. So, UK legislation
considers the debtor's point of view, explore the possibility of the return of
the money lenders. Consequence of filing for bankruptcy is the sale of the
company's property. The U.S. and Japanese law, by contrast, aims to
rehabilitate the debtor allowed all sorts of ways, including giving him some
assistance. In France prefer to timely warn bankruptcy, rather than treat
it.our country, monitoring is carried out by order of the Russian Federal
Service for cases of not-being, and financial health "On the introduction
of monitoring the financial condition of the organization and taking into
account their ability to pay" from 31.03.1999. For this purpose, a system
management bankruptcy of enterprises, it includes the following elements:
. Participants in the system, which
include the company bankrupt, its creditors, the government, labor groups, the
head of the debtor, trustee in bankruptcy, (interim manager, administrative
manager, the external manager, administrator), the arbitral tribunal,
investors, debtors, self-regulatory organization of arbitration managers;
. State regulation:
• legal (legislative,
methodological, informational) support;
• tax regulations;
• Restructuring - removal of
non-core business enterprise objects selected independently functioning
elements of the business or the sale (in accordance with the Resolution of the
Government of the Russian Federation of 22.05.1998, №476 "On measures to
improve the efficiency of the bankruptcy proceedings");
• Training of arbitration managers;
• financial and credit policy of the
state, expressed in financial support on a grant basis under the terms of soft
loans vital to economic enterprises in accordance with the Regulations on the
provision of public financial support for insolvent companies and the use of
the federal budget, sectoral and inter-budget funds for the reorganization or
liquidation of insolvent companies (Annex №2 to the Decree of the Government of
the Russian Federation;
• Social protection of employees of
the bankrupt, jobs for them, re-payment of benefits. (Adjusted in accordance
with the Regulations on the organization of work to promote employment in the
mass release, approved by the RF Government of 05.02.1993 №99);
• methodological support to the
diagnosis of enterprises, bankruptcy prevention, and rehabilitation in the
event of its occurrence.
. System of state authorities and
services at the federal and regional levels, to ensure government regulation.
. Management principles of
bankruptcy:
• a legal framework of business
relations in the bankruptcy;
• Reduce the effect of state and
administration in bankruptcy, ie maintenance of a democratic approach to the
disposition of the debtor;
• Provide honest debtor to resume
its activities;
• the introduction of measures of
security systems in bankruptcy;
• Establishment of measures to
revive the business;
• Protection from the effects of the
company disputes, lawsuits to speed up his break;
• preservation of promising
businesses with temporary financial difficulties;
• protect the interests of all
bankruptcies, the estranged priority to the interests of creditors;
• equitable distribution of the
estate, which is all the property of the debtor, who at the time of opening of
bankruptcy proceedings and subject to sale., Russia has a powerful system of
prevention bankruptcy at the macro level, which absorbed the successful foreign
experience of many developed countries. [4]
.5 Anti-crisis management activities
of enterprises
procedures applicable to the debtor
company are reflected in the Federal Law "On Insolvency
(Bankruptcy)".set of measures applicable to bankrupt enterprises under the
law (Fig. 1) can be divided into groups: reorganization and liquidation.
By reorganizing procedures include:
external property management, pre-trial rehabilitation, supervision, settlement
agreement.managed property is a procedure applied to the business of the debtor
in order to restore its solvency, which aims to continue the activities of the
enterprise.control is introduced arbitration court decision at the request of
the debtor, a creditor or the authorized body and is based on the outsourcing
of the management of the debtor liquidator.Readjustment - it measures to
restore the solvency of the debtor to be taken by the owner of the property of
the debtor - unitary enterprise, the founders (participants) of the debtor, the
debtor's creditors and other parties in order to prevent bankruptcy.-
bankruptcy applied to the debtor in order to safeguard the assets of the
debtor, the analysis of the financial condition of the debtor, in which the
register of creditors' claims, and the first meeting of creditors.amicable
agreement - bankruptcy, used at any stage of the proceedings of bankruptcy to
eliminate the production of the bankruptcy by reaching an agreement between the
debtor and creditors., the main difference of reorganization procedures is that
their use does not result in termination of the debtor companies. The main task
- to organize the withdrawal of an insolvent company, and ensure its normal
functioning.liquidation procedures include: receivership, compulsory
liquidation of the debtor on the arbitration award.of the debtor is in
bankruptcy proceedings, which is determined by the liquidated assets of the
debtor (bankrupt estate) to be distributed among the creditors in order of priority.proceedings
- bankruptcy applied to the debtor is declared bankrupt, in order to meet the
proportionate request of creditors. [5]in the scheduling of payments to
creditors. Out of turn covered the legal costs and labor costs of the
administrator and the implementation of the bankrupt enterprise during his
reign. First of all the requirements for citizens to repay the debt to pay for
benefits for injury to life and health, then the payment of benefits, payroll
persons working under labor agreements (contracts), and the payment of
royalties. In the third stage, settlements with other creditors.' claims on the
obligations secured by the pledge of property of the debtor, are met by the
value of the collateral mainly before other creditors, except for obligations
to the creditors of the first and second stage, claims, which arose prior to
the conclusion of the treaty pledge.contrast to the reorganization liquidation
procedures lead to the termination of the enterprise.this regard, the
procedures of the bankruptcy process in a broader sense, it is useful as a
crisis procedures. In this case, the actual bankruptcy proceedings will serve
as part of crisis management procedures.process of implementation of
anti-crisis procedures in relation to the activities of debtor companies called
crisis management process, which in a market economy is a managed process.is
essential to distinguish the following two concepts.management - a
macroeconomic category, which is a measure of the impact of government designed
to protect businesses from the crisis.crisis management of the enterprise is a
set of forms and methods of implementation of anti-crisis procedures for a
particular debtor. Unlike monitoring this microeconomic category reflecting the
relations of production at the plant level.mechanism of crisis management
include: diagnosis of the feasibility and the financial condition of the
company, the outlook for business development, marketing, crisis management
investment policy, personnel management, production management, organization of
liquidation.actions is to analyze and assess the situation of the company, the
study of the production capacity, the development of production programs,
income policy, innovation, determination of the general concept of financial
recovery. During the realization of this goal is defined practical significance
of bankruptcy for all participants, which is manifested in the following:
• to society - formed structure of
the economy to adapt to the market;
• for the population - made him the
right products;
• creditors have a chance to save
money;
• Staff enterprise creates or
receives useful and appreciate the work., the phenomenon of bankruptcy - the
inevitable companion of the market economy, acting as a phisician, which
controls the health of the enterprise and providing the conditions for further
growth. [4]
2. Analysis of OJSC "Kirov
Lighthouse" on the subject bancruptcy
.1 General characteristics of OJSC
"Kirov Plant "Mayak"
Joint Stock Company "Kirov
Plant "Mayak" was founded in 1941., it is one of the largest
department of the industry conventional arms, ammunition and special chemicals
Ministry of Industry of the Russian Federation, which produces a wide range of
products of sophisticated military equipment to the means of self-defense
products and economic purposes. The catalog contains products made of Kirov
Plant "Lighthouse":goods, including puls-kollektor to complete
milking machines, stand for inspection and adjustment of milking machines,
ventilation system " АЭРЭКО " hardware, form polypropylene.: metered
aerosol spray device "УДАР", "УДАР-М2".The high technical
level, experienced and qualified staff ensure that products that meets modern
requirements., the society is actively searching and development of future
products, which correspond to the current level of science and technology and
meet the needs of the market.
.2 Calculation of the probability of
bankruptcy as a discriminant function
To compute the probability of
bankruptcy is required financial statements and, more specifically, we need a
specific section called "Profit and Loss" presented below:
Profit and loss statement 6 months
in 2011.
|
|
Коды
|
Форма № 2 по ОКУД
|
0710002
|
|
Дата
|
30.06.2011
|
Организация: Открытое акционерное
общество "Кировский завод "Маяк"
|
по ОКПО
|
08628904
|
Идентификационный номер
налогоплательщика
|
ИНН
|
4345000947
|
Вид деятельности
|
29.60
|
Организационно-правовая форма /
форма собственности: открытое акционерное общество
|
по ОКОПФ / ОКФС
|
|
Единица измерения: тыс. руб.
|
по ОКЕИ
|
384
|
Местонахождение (адрес): 610017
Россия, Кировская область, г. Киров, Молодой Гвардии 67
|
|
|
Пояснения
|
Наименование показателя
|
Код строки
|
За отчетный период
|
За предыдущий период
|
1
|
2
|
3
|
4
|
5
|
|
Выручка
|
2110
|
285 560
|
164 166
|
|
Себестоимость продаж
|
2120
|
-192 997
|
-135 942
|
|
Валовая прибыль (убыток)
|
2100
|
92 563
|
28 224
|
|
Коммерческие расходы
|
2210
|
-6 378
|
-3 693
|
|
Управленческие расходы
|
2220
|
-112 016
|
-102 001
|
|
Прибыль (убыток) от продаж
|
2200
|
-25 831
|
-77 470
|
|
Доходы от участия в других
организациях
|
2310
|
14 735
|
33 278
|
|
Проценты к получению
|
2320
|
1 797
|
1 408
|
|
Проценты к уплате
|
2330
|
|
|
|
Прочие доходы
|
2340
|
8 636
|
44 781
|
|
Прочие расходы
|
2350
|
-38 766
|
-41 342
|
|
Прибыль (убыток) до
налогообложения
|
2300
|
-39 429
|
-39 345
|
|
Текущий налог на прибыль
|
2410
|
0
|
0
|
|
в т.ч. постоянные налоговые обязательства
(активы)
|
2421
|
82
|
|
Изменение отложенных налоговых
обязательств
|
2430
|
-6 829
|
-6 135
|
|
Изменение отложенных налоговых
активов
|
2450
|
14 797
|
17 448
|
|
Прочее
|
2460
|
271
|
-205
|
|
Чистая прибыль (убыток)
|
2400
|
-31 190
|
-28 237
|
|
СПРАВОЧНО:
|
|
|
|
|
Результат от переоценки
внеоборотных активов, не включаемый в чистую прибыль (убыток) периода
|
2510
|
|
|
|
Результат от прочих операций, не
включаемый в чистую прибыль (убыток) периода
|
2520
|
|
|
|
Совокупный финансовый результат
периода
|
2500
|
-31 190
|
-28 237
|
|
Базовая прибыль (убыток) на акцию
|
2900
|
25
|
23
|
|
Разводненная прибыль (убыток) на
акцию
|
2910
|
19
|
18
|
|
|
|
|
|
СПРАВКА О НАЛИЧИИ ЦЕННОСТЕЙ,
УЧИТЫВАЕМЫХ НА ЗАБАЛАНСОВЫХ СЧЕТАХ
|
Наименование показателя
|
Код строки
|
На начало отчетного года
|
На конец отчетного периода
|
1
|
2
|
3
|
4
|
Арендованные основные средства
|
910
|
58 096
|
60 834
|
в том числе по лизингу
|
911
|
37 810
|
38 522
|
Товарно-материальные ценности,
принятые на ответственное хранение
|
920
|
6 350
|
6 912
|
Товары, принятые на комиссию
|
930
|
|
|
Списанная в убыток задолженность
неплатежеспособных дебиторов
|
940
|
1 654
|
2 779
|
Обеспечения обязательств и
платежей полученные
|
950
|
1 250
|
123 250
|
Обеспечения обязательств и
платежей выданные
|
960
|
214 998
|
267 144
|
Износ жилищного фонда
|
970
|
205
|
Износ объектов внешнего
благоустройства и других аналогичных объектов
|
980
|
433
|
433
|
Нематериальные активы, полученные
в пользование
|
990
|
|
|
Материалы, принятые в переработку
|
995
|
2 561
|
11 454
|
Independent evaluation of the
financial performance of state:
Index
|
Factor
|
Ratio
|
X1 X2 X3 X4 X5 X6 X7
|
Mobility assets Werewolves
payables Werewolves equity Return on assets Working capital Concentration of
capital raised Cover debts equity
|
15 4038/1 4363=10,724 28 5560 / 22
3127=1,279 28 5560/ 15 4038=1,853 15 4038/ 28 5560=0,539 (13 9675-22 3127) /
13 9675=-0,597 (6829+22 3127) / 15 4038=1,492 15 4038/ (5 2146 +6829 +22
3127)=0,546
|
= 0,033•X1+0,268•X2+0,045•X3 -
0,018•X4 - 0,004•X5 - 0,015•X6+0,702•X7
Z=
0,033•10,724+0,268•1,279+0,045•1,853 - 0,018•0,539 - 0,004•(-0,597) -
0,015•1,492+0,702•0,546=0,353892+0,342772+0,083385 - 0,009702 - (-0,002388) -
0,02238+0,383292=1,133647
to the model (2), according to my
calculations, the value of Z (financial assessment) to gain more 1.104, in my
case Z = 1,133647, which suggests that I have chosen the company is in good
financial condition, and the likelihood of bankruptcy is low
Conclusion
summary, I can say that the analysis
of the probability of bankruptcy takes the value of one of the main regulators
that firms use as a medium impact on the financial processes in the enterprise.
There are many methods for estimating the probability of bankruptcy. The
company needs to choose one or combine several reasonably existing methods to
get a picture of the company's solvency. [9]its analysis of bankruptcy can
identify the reasons for a possible bankruptcy, in order to avoid in the
future. The reasons may be, as mentioned above, the decline in sales due to
poor demand study, no distribution network, advertising, reduced production,
unnecessarily high costs, low profitability of products; excessive production
cycle, large debts, mutual non-payments, etc. etc.other things, I have outlined
promising methods for assessing reliability and solvency of counterparties,
particularly in the current Russian conditions where the counterparty is often
dependent on the financial stability of the enterpriseimportant to know the
company accountant and the basis of calculation of solvency analysis of the
likelihood of bankruptcy, as well as the regulatory framework governing the
issues of bankruptcy.
Footnotes
. monitoring, systematic collection
and processing of information, which can be used to improve the decision-making
process, as well as, indirectly, to inform the public or directly as feedback
tool for the implementation of projects, program evaluation or policy.
. correlation-linear function
relationship between two or more random variables (or values that can be with
some reasonable degree of accuracy considered as such). In this case, change
the values of one or more of these values are accompanied systematically
changing the values of one or several other variables
. intragroup variance - reflects
random variation, ie part of the variation that occurs under the influence of
unaccounted factors and independent of the sign factor, form the basis of the
group.
. cash ratio, describes the
company's ability to repay the current (short-term) liabilities with cash,
money in banks and short-term investments.
. cross-analysis is a comparison of
the two types of analysis, technical and fundamental together.
. Recession-term means relatively
mild, non-critical recession or a slowdown in economic growth.
. capitalization transform means
(part of the net profits, dividends, etc., or all profit) in additional
capital, additional factors of production (such as the means of labor, objects
of labor, labor, etc.), which results in a increase in the size of their own
funds.
. liquidity and economic term for
the ability of the assets to be sold quickly at a price close to the market.
. inventory turns, characterizes the
mobility of funds that the company invests in stocks: the faster the money
invested in stocks, returned to the company in the form of proceeds from the
sale of the finished product, the higher business activity of the organization
. accounts receivable turnover ratio
of revenue from sales to the average amount of accounts receivable, net of
allowance for doubtful position.
. trend direction indicators of way.
. volatility of financial and
statistical measure of the variability of prices.
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Yuri Danilov. "Financial Management" // Problems of the theory and
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.
AE Krioni. "Management in Russia and abroad" // January-February
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.
AV Matveichuk №4 (43) 2008. Moscow. page: 90.91.
.
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