IDEAS home Printed from https://ideas.repec.org/a/scm/ausvfe/v11y2011i1(13)p237-244.html
   My bibliography  Save this article

Quick Determination Model Of Insolvency For A Company

Author

Listed:
  • Cristina Rodica GRADEA

    (Wales University of Bucharest, Romania, Faculty of Economic, Legal and Administrative Studies)

Abstract

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.

Suggested Citation

  • Cristina Rodica GRADEA, 2011. "Quick Determination Model Of Insolvency For A Company," The Annals of the "Stefan cel Mare" University of Suceava. Fascicle of The Faculty of Economics and Public Administration, "Stefan cel Mare" University of Suceava, Romania, Faculty of Economics and Public Administration, vol. 11(1(13)), pages 237-244, June.
    • Handle: RePEc:scm:ausvfe:v:11:y:2011:i:1(13):p:237-244
    as

    Download full text from publisher

    File URL: http://www.seap.usv.ro/annals/arhiva/ANNALS_vol.11,nr.1(13),2011_fulltext.pdf
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:scm:ausvfe:v:11:y:2011:i:1(13):p:237-244. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Liviu Scutariu (email available below). General contact details of provider: https://edirc.repec.org/data/feusvro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.