A systematic approach to the diagnosis and early warning of a financial crisis in an enterprise
Year: 2025
Type: article
Abstract: The article analyzes the scientific opinions on the nature and causes of the economic crisis and considers the concepts and role of control in an enterprise. It includes an analysis of the main methods of diagnosing the financial condition and identifying early warning signs of bankruptcy. The relevance of adopting an innovative approach to financial control in the anti-crisis management system is demonstrated. The advantages and disadvantages of traditional, integrated, and cost-based methods of diagnosing a financial crisis are presented through a comparative analysis of two operating companies. The conclusion is that the isolated use of any one method is inadequate for an objective and reliable assessment of the probability of bankruptcy. A conclusion is drawn that, in order to make timely and informed management decisions regarding the implementation of anti-crisis measures, a systematic approach should be adopted. Indicators of the financial and economic performance of enterprises are identified, including those derived from various methodologies that comprehensively characterize the financial situation. A practical example demonstrates that when analyzing individual indicators as standalone criteria, the likelihood of a crisis can be ambiguously interpreted. Therefore, the authors propose a diagnostic system based on a three-pronged approach in the form of a rating model for assessing the severity of a crisis within a company. The model relies on ranking financial and economic indicators according to criteria such as objectivity, calculation reliability, and priority when conducting financial diagnostics. Therefore, the proposed approach to crisis diagnostics can be considered objective, as it addresses the issue of ambiguity in conclusions that can arise when using any individual method.
Authors: Tatyana Nikolenko, Lydia Semina
Institution: Moscow Aviation Institute
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4409866916