Quick Determination Model Of Insolvency For A Company
Under conditions of crisis, suppliers are faced with situations where a decision must be taken quickly if they supply or provide services for a company which they don’t know if it can honor invoices or not. In this research we propose a model for rapid determination of bankruptcy, which should lead the provider, in the short term, to the decision of cooperating or not with a company. The model was tested on financial statements from Arabesque Company and is based on a function of "scoring". Period considered was 2004-2009, during this period were analyzed five indicators: gross result, the period of debt repayment, period of the receivable debts, degree of indebtedness and patrimonial liquidity. Outcome research for ARABESQUE Company was as follows: YEAR -> CATHEGORY -> RISK TYPE 2004 D Low risk of bankruptcy, 2005 D Low risk of bankruptcy, 2006 D Low risk of bankruptcy, 2007 D Low risk of bankruptcy, 2008 C Moderate risk of bankruptcy, 2009 B Major risk of bankruptcy. Especially during the financial crisis, economic agents have so much need of liquidity. Relaxation process of lending by the banking system becomes a necessity. To believe, however, that whatever the results that there are there banks which give loans under stress conditions, would be a mistake. For that, careful monitoring, continuous and perseverance of bankruptcy risk , could ensure liquidity needs and the survival of society in times of crisis.
Volume (Year): 11 (2011)
Issue (Month): 1(13) (June)
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