Financial Characteristics of Pre-Moratorium Companies

Abstract

Financial Characteristics of Pre-Moratorium Companies This article presents the outcome of research focused on financial characteristics of companies declaring a moratorium. The key purpose of the moratorium is to avoid threatening bankruptcy. The aim of the research is to identify the financial situation of the companies entering the moratorium process. The main objective was to find the answer to the core question whether there is any chance of avoiding bankruptcy using the moratorium, that is, whether the moratorium fulfils its basic function. The research is based on a quantitative analysis of selected financial ratios and synthetic indicators and their mutual relations. The analysis looks for an answer to what financial indicator levels were characteristic for the companies launching the moratorium mode of operation and what these levels indicated. The research results prove that the financial situation of the companies entering the moratorium process was unsatisfactory. It is even possible to conclude that the companies were in the last stage of their corporate crisis. This situation shows that the probability of avoiding bankruptcy was extremely low.

Evaluation of the selected economic parameters of Czech companies and their potential for overcoming global crises during the Covid-19 pandemic

“…It is important to evaluate these findings with the results of studies that also analysed other research samples of Czech companies. For example, studies by Schönfeld (2020) and Schönfeld et al (2019) analysed companies that were affected by the negative events of the corporate crisis. The authors conclude that, for example, in companies that applied for a moratorium, the symptoms of the corporate crisis had already started manifesting themselves three years before.…”

Enterprise Performance and Specific Financial Sources

“…There are early warning signals that many companies reach extremely high leverage in Central Europe [9]. This can threaten the future existence and may result in the corporate insolvency as in cases [22] or [23]. This paper will analyze only one particular industry branch.…”