A Critical Approach to the Corporate Insolvency in Romania

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Florya Chronicles of Political Economy
Volume:3 Issue:1
A Critical Approach to the Corporate Insolvency in Romania

A Critical Approach to the Corporate Insolvency in Romania

Authors : Alina TARAN

Pages : 111-129

View : 13 | Download : 12

Publication Date : 2017-04-01

Article Type : Research Paper

Abstract :A critical moment in the existence of an economic entity is the deterioration of its financial situation and the advent of a liquidity crisis that could lead to the establishment of debt payment incapacity. Through this paper, we analyse the financial situation of companies before the moment of entry into insolvency and during insolvency proceedings, and then we compare them with non-distressed companies. Our purpose is to debate the problem of the prediction of insolvency in terms of symptoms and methods of assessment of the risk of insolvency, taking into account a sample of companies from Romania that are listed on the Bucharest Stock Exchange Market. In order to reveal the most significant indicators that describe the distressed companies, we conducted a comparative analysis of some existing models to measure the bankruptcy riskm with a focus on testing their applicability and developing a new model appropriate for the Romanian business environment
Keywords : Insolvency, Insolvency Risk, Financial Information, Bankruptcy Prediction Models, Artificial Neural Networks, Romania

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