Academic Scientific JournalsFinancial distress and financial restructuring of companies - determinants and effects
DOI:
https://doi.org/10.26881/wg.2018.1.03Keywords:
company, finance, financial restructuring, crisisAbstract
Purpose – Businesses in a changing environment characterized by uncertainty, risk, and diversified threats exacerbate the occurrence of financial problems at both macro and non-macroeconomic levels. The fact of late identification of the symptoms of the financial distress or its lack may result either in the need to implement an extensive array of financial restructuring tools and actions, and in the extreme case may lead to bankruptcy. The purpose of this article is to identify the determinants most affected by the financial distress in enterprises as well as the analysis and assessment of the most effective tools and measures to tackle the financial distress of financial restructuring.
Methodology – The study was conducted in April 2015 on the request of 100 small and medium-sized enterprises in the Zachodniopomorskie voivodship. The collected baudrate is cross-sectional microdata derived from questionnaire surveys. The survey database contains 100 observations. Random sample selection. There were, among others analysis of the main components Also reviewed and analyzed literature primarily called. Related work.
Findings – There is a large variation in the determinants that influence the occurrence of financial distress in the surveyed companies. Taking into account the weighted average, the respondents included price fluctuations (availability), political conditions, and economic situation in the country – as factors most determining the financial distress. Managers as the most successful financial restructuring actions pointed to a reduction in investment spending by abandoning investments and renegotiating contractual terms. Both actions are part of a broadly understood cost reduction program and are of a stabilizing nature.
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