Structural and Profitability Indicators in Assessing the Risk of Bankruptcy

Abstract

Financial rates are indicators used to assess the performance and financial position of a company. Most of these economic and financial indicators are calculated based on the information provided by companies in the financial statements. The usefulness of these economic-financial indicators consists both in highlighting a trend, and especially in the possibility that the analyzed company can be compared with other companies active in the same sector. At the same time, there are financial indicators that help predict a possible bankruptcy in the future. In order to determine the risk of bankruptcy based on the assets owned by a company, I performed an empirical study in order to examine the impact of tangible and intangible assets in companies with deficiencies revealed by external auditors, together with profitability indicators which can help in predictions regarding company evolution.

Keywords

• management indicators
• fraud risk
• insolvency
• audit report
• bankruptcy