ASSESSMENT OF FINANCIAL CONDITION AND BANKRUPTCY PROBABILITY OF JSC “UKRZALIZNYTSYA”

Keywords: financial condition, absolute and relative profitability indicators, bankruptcy, Altman’s two-factor model, Altman’s five-factor model, Tereshchenko’s function

Abstract

The analysis of the absolute profitability of JSC “Ukrzaliznytsia” from 2018 to the sixth month of 2021 has been performed: net sales revenue, net financial result. An increase in indicators in 2018-2019 has been established and reduction of net income, the occurrence of losses in 2020-2021. The analysis of relative indicators of profitability has been performed: return on capital (assets), return on assets before income tax and interest payments, return on equity, return on sales (sold products). The profitable activity of JSC “Ukrzaliznytsia” in 2018-2019 and unprofitable activity in 2020-2021 has been established. It is determined that the main factors of deterioration of the financial condition of JSC “Ukrzaliznytsia” are external (exogenous) factors: reduction of demand for passenger and freight services due to the pandemic COVID-19. It is proved that one of the signs of the probability of bankruptcy is the unprofitable activity of the company. An assessment of the probability of bankruptcy of JSC “Ukrzaliznytsia” from 2018 to the sixth month of 2021 on the basis of two- and five-factor models of Altman and the function of O. Tereshchenko has been made. The advantages and disadvantages of these models are described. It has been found that the results of the analysis of the probability of bankruptcy on the two- and five-factor models of Altman show that JSC “Ukrzaliznytsia” is a financially unstable company, which is not threatened by bankruptcy. It is determined that it is necessary to assess the probability of bankruptcy of JSC “Ukrzaliznytsia” on the basis of domestic methods, one of which is the function of O. Tereshchenko, as two- and five-factor Altman models developed by a foreign scientist and based on foreign business practices. development of Ukraine. It was established that according to the function of O. Tereshchenko in 2018 and 2021 for JSC “Ukrzaliznytsia” there was a possibility of bankruptcy, in 2019 – bankruptcy did not threaten the company, in 2020 – there was the highest probability of bankruptcy. Such results of the analysis are most closely correlated with the results of the analysis of the financial condition in terms of profitability indicators. Rehabilitation measures are proposed to reduce the level of bankruptcy of JSC “Ukrzaliznytsia”.

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Published
2022-02-22
How to Cite
Lyvdar, M., Chubka, O., & Fitiak, D. (2022). ASSESSMENT OF FINANCIAL CONDITION AND BANKRUPTCY PROBABILITY OF JSC “UKRZALIZNYTSYA”. Economy and Society, (36). https://doi.org/10.32782/2524-0072/2022-36-17
Section
FINANCE, BANKING AND INSURANCE