Methods To Prevent The Insolvency Of Companies
AbstractThe insolvency of companies is a phenomenon more and more common in Romanian economy. A business is insolvent if it doesnâ€™t have enough assets to cover its debts, or it is unable to pay its debts as and when they are due. If a company can anticipate the insolvency risk it can avoid insolvency. The aim and the objective of the paper is to highlight the main strategies and methods for preventing insolvency and also their importance for a company. The financial difficulty of a company doesnâ€™t have a legal adequate definition, but the accounting information, the evaluation report or audit reports, the banks admonitions can offer important criterions for the appraisal of the venture and can create a reference point for the trigger action of the alertness. A hypothetical line of the companies difficulties would start from the admonitions of the difficulties, would continue with the eventual prevention procedures or measures and procedures of extra judiciary treatment of the financial crisis, and only if these procedures didnâ€™t gave result, with the insolvency procedure. The insolvency procedure gave also a chance for a company, the reorganization procedure, but may also lead to bankruptcy. The methods for preventing insolvency can be applies also by profitable companies in order to prevent financial difficulties, and also by companies in difficulties, company which can pass the crises period applying these strategies and methods.
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Bibliographic InfoArticle provided by Dimitrie Cantemir University, Faculty of Economical Science in its journal Academica Science Journal - Economica Series.
Volume (Year): 1 (2012)
Issue (Month): 1 (November)
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insolvency; methods of prevention; bankruptcy; corporate governance;
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