engleski

BONITEST Analysis of Companies in Pre - bankruptcy Proceedings

For illiquid and insolvent companies operating in the Republic of Croatia a possibility for financial and operative restructuring has been introduced in order to enable the continuity of operations for such companies. The aim of the paper is to research the financial rating the companies have or had before, during and after pre-bankruptcy proceeding in order to establish the risks of business cooperation with these companies. Financial ratings of companies were measured by BONITEST model. The model was developed so as to enable a quick and efficient solvency control for business partners operating in the Republic of Croatia and is accessible on the web pages of Računovodstvo, revizija i financije magazine. Since companies operating in the Republic of Croatia face significant credit risks reflecting in uncollectible receivables, it is necessary to pay special attention to the control of business partner’s solvency. The results of the research have shown that the majority of companies has a low or the lowest rating in the period before, during or after pre-bankruptcy proceeding. Such rating implies that there is a very high bankruptcy threat in these companies even after the conducted pre-bankruptcy proceeding. Owing to that, business cooperation with such companies faces significant credit risks and calls for strong payment insurance instruments. Although the results of the research suggest that the pre-bankruptcy proceedings have not significantly improved the solvency of the observed companies, it is necessary to consider the usefulness of future pre-bankruptcy proceedings in the Republic of Croatia from the social perspective as well, which has not been taken into account in this paper.

BONITEST ; financial statements analysis ; companies in pre-bankruptcy proceeding

nije evidentirano