Does neglecting the instruments of financial failure play a role in the bankruptcy of companies?

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Corporate financial analysis tools are an important factor in corporate efficiency. Low-quality accessories for corporate financial analysis tools really brutally violate the interests of shareholders and can lead to the collapse of the business. The paper examines the development of models for predicting financial crises and compares the capabilities of existing models that can help alert management to current activity regarding an economic decision to buy shares or make loans. In the example of the NCA RUIBA company, Kida and Sherrod models were considered for predicting the financial failure of a firm. Based on the results of the calculations, it can be noted that NCA RUIBA had a good financial position when calculating the indicators according to Kida’s model, and according to the calculated data of the Sherrod model, the organization relies on external financing through high-risk loans, which is associated with the growth of non-current liabilities, especially long-term and medium-term ones. The results suggest that although corporate financial analysis tools alone are not sufficient to accurately predict financial distress, they can increase the predictive power of financial indicators and macroeconomic factors.

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    • Table 1. Categories by degree of risk and by measuring the ability to continue
    • Table 2. Financial statements and Z-score results of Sherrod
    • Table 3. Financial statements and Z-score results of Kida
    • Conceptualization
      Selma Douha
    • Formal Analysis
      Selma Douha
    • Project administration
      Selma Douha, Khadri Nadjib
    • Supervision
      Selma Douha
    • Validation
      Selma Douha
    • Data curation
      Soufyane Bouali
    • Funding acquisition
      Soufyane Bouali
    • Methodology
      Soufyane Bouali
    • Visualization
      Soufyane Bouali
    • Writing – review & editing
      Soufyane Bouali
    • Investigation
      Khadri Nadjib
    • Resources
      Khadri Nadjib
    • Writing – original draft
      Khadri Nadjib