ANALYSIS AND DIAGNOSTICS OF THE CRISIS DEVELOPMENT OF THE ENTERPRISE
The study of the chapter is aimed at the formation and systematization of knowledge about the theoretical bases of financial diagnosis , methods of assessing the risk of bankruptcy ^ methods of analyzing the prospects of an insolvent enterprise; obtaining skills to substantiate the conclusions and recommendations for developing practical proposals for restoring the normal functioning of the business.
Features of financial diagnostics, the focus and the main tasks of analysis and diagnosis
One of the main tasks of integrated economic analysis is the forecasting of financial and economic performance indicators and expected results. The connection of analytical studies with the prediction of the main business parameters makes it possible to single out in an integrated economic analysis such an independent direction as a diagnostic analysis. Its target orientation is related to the disclosure of the main deviations from the normal, stable state in the mechanism of organizations, the forecasting of crisis development and the identification of cause and effect relationships in the main violations of financial and economic activities, as well as the management of undesirable consequences. An analytical study of the crisis development of a business entity has its own characteristics and is becoming most relevant in the context of the crisis development of the economic system. Traditional analytical tools are designed for their use in normal economic activities. In emergency situations related to the need to exit the organization from a financial crisis, traditional analysis is often not effective enough.
An important feature of the diagnostic study is a comprehensive system approach to research, which includes:
• continuous monitoring of the financial condition and performance of the enterprise for early detection of signs (symptoms) of crisis development;
• analysis and diagnostics in conditions of increased risk, pre-crisis or crisis conditions, determining the scale of crisis development;
• study of the main factors, the reasons that caused the crisis development of the enterprise;
• Search for new directions for the development of the organization in the framework of innovation activities.
Diagnosis in the system of crisis management should be based on the following assumptions:
• The enterprise operates under uncertainty, i.e. in a risk environment;
• the risks that affect the activities of the business entity are internal and external;
• external risks for all enterprises operating in the market are the same;
• Internal risks of the enterprise are related to the level and quality of management of the business entity;
• the enterprise is in a crisis (or pre-crisis) state;
• Insolvency is not a single phenomenon, but characteristic of the economy and individual industries as a whole.
Based on the prerequisites of financial diagnostics, the main principles of its implementation are:
• early diagnosis of crisis phenomena;
• Rapidity of response to identified symptoms and factors of crisis development;
• objectivity and adequacy of the developed financial equilibrium programs;
• Full realization of the internal opportunities for the enterprise to exit the crisis.
Formal requirements for diagnostic research are formulated in normative documents, according to which its tasks are to establish the possibility
or the impossibility of restoring the solvency of the enterprise and further breakeven activity, justification for the introduction of an appropriate bankruptcy procedure.
The tasks to be performed within the framework of financial diagnostics are subject to deeper detail:
• a priori identification of unfavorable development trends and identification of weak bottlenecks activity of the enterprise or the main threats from external and internal factors;
• establishing the nature of violations from the normal course of economic processes on the basis of typical features inherent in a specific violation;
• Forecasting bankruptcy;
• timely response to any undesirable changes in the economy of the enterprise and operational impact on problem situations;
• Defining methods and developing anti-crisis measures.
The directions of the diagnostic analysis are dictated by the goals facing the analyst or the arbitration manager in bankruptcy proceedings. The main steps that meet the economic feasibility, the tasks to be accomplished and the methods of conducting should include:
• preliminary diagnostic analysis (rapid analysis) or diagnosis of bankruptcy risk;
• Subsequent (complex) diagnostic analysis of external and internal environment, identification of weaknesses in activity, cause-effect relationships;
• evaluation of the results of implementation of anti-crisis measures and financial recovery of an insolvent organization;
• Forecasting bankruptcy for the nearest and as far as possible distant future, determining the possible timing of insolvency (Figure 14.1).
Preliminary diagnosis based on the rapid assessment of the financial situation is caused by the requirements of an immediate assessment of current activities, early detection of signs of crisis development, when it is necessary to make quick decisions in the face of limited information on correcting mistakes or correcting the corresponding managerial actions. For example,
but the data on the ratio of income and expenditure, it is necessary to determine the possibility of a negative development of the increase in risk and a decrease in financial results, etc.Potential options for express diagnostics can be conclusions about the absence of signs and negative trends in development or about the presence of risk factors, unfavorable trends, including those that can lead to bankruptcy, as well as a conclusion about the crisis or pre-crisis state, the ability to independently restore solvency .
After a preliminary assessment, it is required to conduct a subsequent, more in-depth study of indicators, trends, and the dynamics of the ratios of key parameters. Complex diagnostics is an in-depth study and should confirm and clarify, as a result of the preliminary assessment, the scale of the financial crisis of the enterprise, provide a deeper rationale for the results of the crisis parameters of financial development, determine the ability of the business entity to neutralize the threat of bankruptcy at the expense of internal financial reserves.
If primary signs of financial instability are not revealed during the preliminary diagnosis, a comprehensive diagnostic study of the possible insolvency is not carried out, instead of it, the activity is forecasted according to the main parameters of the business.
The presence of established deviations from normal functioning requires a deep comprehensive study and diagnosis in certain areas of the formation of an unstable situation with the forecasting of the timing of possible bankruptcy or recovery of business conditions. Thus, the diagnosis at the next stage of the implementation is carried out in two directions: the diagnosis of the internal and external business environment and the subsequent diagnostic study of specific problem areas with an assessment of cause-effect relationships and dependencies.
If the diagnosis of the risk of a crisis state is aimed at determining the degree of insolvency, financial dependence and, ultimately, the probability of bankruptcy, then forecasting development
aims to clarify the timing of the restoration of the financial and economic balance or the terms of real bankruptcy.
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