THE ALGORITHM OF DEFINITIONS AND OVERCOME THE CRISIS AT ENTERPRISE
Journal Title: Проблеми і перспективи розвитку підприємництва - Year 2014, Vol 1, Issue 6
Abstract
Every company is committed to long-term economic growth, but they are often faced with periods of economic instability and crisis. The subject of the article is the economic activity of the enterprise and its problems. The purpose of the paper is to develop an algorithm detecting the first symptoms of the crisis at the plant and to overcome these symptoms by specific methods and tools. A methodical approach to the analysis of a crisis in the company which is considered in the article makes it possible to conduct a diagnosis in time and detect crisis signs on their early stages. The measures proposed enable managers to form an effective anti-crisis policy of the company. The result of this article is allocation five types of financial crises that have different characteristics: the solvency crisis, a crisis of limited resources, profitability crisis, a crisis of effectiveness and a strategic crisis. In this article there is the algorithm of managment in the event of company’s adverse effects. First of all we must determine the type of crisis in the company. We must calculat the following indicators: coefficient of financial independence, absolute liquidity ratio, the rate of output growth, the growth rate of equity, earnings (losses) from sales, net income, return on assets, return on net sales, the employment potential of the company, the rate of total current liquidity, etc. The calculation of each indicator and comparison of the results with the standards will clearly determine which typeof crisis the company has. The main objective of the manager is to overcome the crisis at the enterprise. It is necessary to apply a number of anti-crisis measures that would help improve the financial stability of the company. For each type of crisis various methods of stabilization to achieve long-term economic growth in the future should be used. For example, in a crisis of solvency the company is committed to the restructuring of creditor indebtedness; during the crisis of limited resources a company tries to optimize cash flows. During the crisis of profitability it tries to stimulate sales/ In case of the crisis of efficiency the company makes cost optimization, while in case of strategic crisis it restore the productive capacity of the enterprise and determins long-term factors of success.
Authors and Affiliations
Yuliia Pletneva, Inna Akhnovskaya
Keywords
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