FORMALIZATION OF THE MODEL OF THE ENTERPRISE INSOLVENCY RISK PREDICTION

Abstract

Objective: to improve the conceptual apparatus and analytical procedures of insolvency risk identification.Methods: general scientific methods of systemic and comparative analysis, economic-statistical and dynamic analysis of economic processes and phenomena.Results: nowadays, managing the insolvency risk is relevant for any company regardless of the economy sector. Instability manifests itself through the uncertainty of the directions of the external environment changes and their high frequency. Analysis of the economic literature showed that currently there is no single approach to systematization of methods for insolvency risk prediction, which means that there is no objective view on tools that can be used to monitor the insolvency risk. In this respect, scientific and practical search of representative indicators for the formalization of the models predicting the insolvency is very important. Therefore, the study has solved the following tasks: defined the nature of the insolvency risk and its identification in the process of financial relations in management system, proved the representativeness of the indicators in the insolvency risk prediction, and formed the model of the risk insolvency prediction.Scientific novelty: grounding the model of risk insolvency prediction.Practical significance: development of a theoretical framework to address issues arising in the diagnosis of insolvent enterprises, and ap- plication of the results obtained in the practice of the bankruptcy institution bodies. The presented model allows to predict the insolvency risk of the enterprise through the general development trend and the fluctuation boundaries of bankruptcy risk; to determine the significance of each indicator-factor, its quantitative impact, and therefore, to avoid the risk of the enterprise insolvency.

Keywords

• risk
• insolvency
• inability to pay
• prediction
• bankruptcy
• crisis
• diagnosis