Financial Analysis of the Probability of Insolvency of a Corporation

Abstract

Financial condition is the most important characteristic of the economic activity of business entities. Therefor in domestic theory and practice there is a search for methods and models that make it possible to predict the bankruptcy of organizations with sufficient accuracy. The article discusses the methods used in the practice of economic entities of the Russian Federation for assessing the likelihood of bankruptcy. As an innovation, an innovative crisis management mechanism is proposed — an autogenic crisis and its practical tool based on stress testing of enterprises in the real sector of the economy. To effectively manage crisis situations, it is recommended to develop a Federal Auditing Standard with a unified set of indicators that allow assessing the likelihood of insolvency (bankruptcy) of the audited organizations. In addition to financial indicators, it is proposed to include in the set of such indicators reflecting the operational and investment activities of business entities.