Evaluation of enterprise survival: case of Latvian enterprises
Abstract
Authors study the nature of insolvency both from the legal point of view and scientist position as well as updating tendencies of an insolvency of enterprises in recent years. The subject of the study has been selected company’s survival potential that is analyzed with financial ratio analysis using bankruptcy prediction models. Considering research results, authors identify models that are applicable to a particular industry. Authors put primary metal industry (NACE 24) for the study. The aim of the paper is to investigate the survival potential of enterprises by testing existing parametric models of insolvency forecasting and assessing their potential for use in the economic conditions of Latvia. During the investigation has been reviewed the concept of the financially healthy company and its relation with the main success development factors.
Keyword : non-financial company distress, solvency forecasting models, parametric models, Latvian enterprises, metal industry, model validation
How to Cite
Scacun, N., & Voronova, I. (2018). Evaluation of enterprise survival: case of Latvian enterprises. Business, Management and Economics Engineering, 16, 13-26. https://doi.org/10.3846/bme.2018.2482
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Savickaya, G. V. (2006). Metodika kompleksnogo analiza hozyajstvennoj deyatelnosti. Moskva: Infra-M.
Теreshchenko, А. (2000). Finansovaya sanaciya i bankrotstvo predpriyatij. Kiev: KNEU.
Ventura, J. (2008). The bankruptcy handbook: everything you need to know to avoid bankruptcy, get rid of debt, and rebuild your credit. United Kingdom: Kaplan Publishing.
Waszkowski, A. (2011). Methods of classification models. Oeconomia, 95-106. Retrieved from https://goo.gl/qZnc87
World Steel Association. (2015). Retrieved from https://goo.gl/yTKG4h
Altman, E. I. (1993). Corporate financial distress and bankruptcy. John Wiley & Sons.
Amini, H., Cont, R., & Minca, A. (2016). Resilience to contagion in financial networks. Mathematical Finance, 329-365. https://doi.org/10.1111/mafi.12051
Arasu, R., Balaji, C. D., Kumar, S. P., & Thamizhselvi, N. (2014). Applicability of Fulmer and Springate Models for predicting financial distress of firms in the finance sector – an emperical analysis. Journal of Finance and Risk Management, 4(1), 1-9.
Alferov, V. N., & Khudyakova V. V. (2017). Monitoring kreditosposobnosti zayomshikov kak mehanizm atikrizisknogo upravlenija. Strategii biznesa, 36(4), 1-11. Retrieved from https://goo.gl/vhNeq2
Baykina, S. (2010). Uchet i analiz bankrotstva. Moskva: Dashkov i Kо.
Berzkalne, I. & Zelgalve, E. (2013). Bankruptcy prediction models: a comparative study of the Baltic listed companies. Journal of Business Management, 7(1), 72-82.
Boratynska, K. (2016). Corporate bankruptcy and survival on the market: lessons from evolutionary economics. Oeconomia Copernicana, 7(1), 107-129. https://doi.org/10.12775/OeC.2016.008
Buston, C. (2016). Active risk management and banking stability. Journal of Banking and Finance, 203-215. https://doi.org/10.1016/j.jbankfin.2015.02.004
Gepp, A., Kumar, K., & Bhattacharya, S. (2010). Business failure prediction using decision trees. Journal of Forecasting, 29(6), 536-555. https://doi.org/10.1002/for.1153
Ginoglou, D., Agorastos, K., & Hatzigagios, T. (2002). Predicting corporate failure of problematic firms in Greece with LPM logit probit and discriminant analysis models. Journal of Financial Management & Analysis, 15(1), 1-15.
Gruszczynski, M. (2015). Issues in modelling the financial distress and bankruptcy of companies. Quantitative Methods in Economics, 16(1), 96-107. https://doi.org/10.2139/ssrn.2880146
Januška, M. (2004). Mūsdienu prasības bilances kontu uzskaitei un analīzei. Rīga: Merkūrijs.
Joo-Ha, N., & Taehong, J. (2000). Bankruptcy prediction: evidence from Korean listed companies during the IMF crisis. Journal of International Financial Management and Accounting, 11(3), 178-197. https://doi.org/10.1111/1467-646X.00061
Kanapickiene, R., & Marcinkevicius, R. (2014). Possibilities to apply classical bankruptcy prediction models in the construction sector in Lithuania. Economics and Management, 19(4), 317-332. Retrieved from https://goo.gl/unAWsB
Keasey, K., Pindado, J., & Rodrigues, L. (2015). The determinants of the costs of financial distress in SMEs. International Small Business Journal, 33(8), 862-881. https://doi.org/10.1177/0266242614529317
Krusinskas, R., Lakstutiene, A., & Stankeviciene, J. (2014). The research of reliability of bankruptcy prediction models in Lithuanian companies. Transformations in Business and Economics, 13(2), 102-123. Retrieved from https://goo.gl/QX6ovf
Laakso, T., Laitinen, E., & Vento, H. (2010). Threat of insolvency and successful company reorganization. Helsinki: Talentum Media Oy.
Liang, D., Lu, C.-C., Tsai, C.-F., & Shih, G.-A. (2016). Financial ratios and corporate governance indicators in bankruptcy prediction: a comprehensive study. European Journal of Operational Research, 252, 561-572. https://doi.org/10.1016/j.ejor.2016.01.012
Lursoft. (n.d.). Uzņēmumu datu bāzes. Retrieved from https://doi.org/10.1016/j.ejor.2016.01.012
Maksātnespējas likums. (n.d.). Retrieved from https://goo.gl/cdW3yY
Mavlutova, I., Zalitis, U., Mavlutova, A., & Mavlutov, B. (2014). Evaluation of enterprise solvency in lending practice of commercial banks: evidence from Latvia. RISEBA, 90-108. Retrieved from https://goo.gl/E8VxKG
Nelson, P. B. (1981). Corporations in crisis: behavioral observations for bankruptcy policy. United States: Praeger.
Petersen, C., & Plenborg, T. (2012). Financial statement analysis: valuation, credit analysis and executive compensation. England: Pearson Education Limited.
Pitrova, K. (2001). Possibilities of the Altman Zeta Model Application to Czeck Firms. E & M Ekonomie a Management, 3, 66-76. Retrieved from https://goo.gl/CMhULZ
Saksonova, S. (2006). Uzņēmuma finanšu vadības praktiskās metodes. Rīga: Merkūrijs LAT.
Singh, B. P., & Mishra, A. K. (2016). Re-estimation and comparisons of alternative accounting based bankruptcy prediction models for Indian companies. Financial Innovation, UNSP, 2(6). https://doi.org/10.1186/s40854-016-0026-9
Shneidere, R. (2009). Finanšu analīzes metodes uzņēmuma maksātnespējas prognozēšanai. Rīga: Lietišķās informācijas dienests izdevniecība.
Swedbank. (2016). Kā saprast, vai mans uzņēmums strādā ienesīgi? Retrieved from https://goo.gl/jsVFy4
Savickaya, G. V. (2006). Metodika kompleksnogo analiza hozyajstvennoj deyatelnosti. Moskva: Infra-M.
Теreshchenko, А. (2000). Finansovaya sanaciya i bankrotstvo predpriyatij. Kiev: KNEU.
Ventura, J. (2008). The bankruptcy handbook: everything you need to know to avoid bankruptcy, get rid of debt, and rebuild your credit. United Kingdom: Kaplan Publishing.
Waszkowski, A. (2011). Methods of classification models. Oeconomia, 95-106. Retrieved from https://goo.gl/qZnc87
World Steel Association. (2015). Retrieved from https://goo.gl/yTKG4h