Economic Sciences / 10. Economy enterprises.

Post-graduate student, Golovach K. S.

Zhytomyr National Agroecological University, Ukraine

ALTMAN MODEL FOR AGRICULTURAL ENTERPRISES

The economic crisis caused by the imperfection and failure of the banking system was a precursor to serious problems solvency of enterprises. A number of companies avoided bankruptcy only because of their restructuring through mergers and acquisitions. Until now, a significant number of insolvent enterprises of real sector generates a wave of failures.

Using the analysis of the financial condition of the organization it is possible to identify problem areas that can lead to the insolvency of the company and the subsequent bankruptcy. Thus, the purpose of the analysis of the financial condition of the enterprise is the identification and prevention of adverse effects of its activities.

There are various methods of assessment of bankruptcy. One of the most popular methods - a solvency analysis of a enterprise. It is carried out with a purpose - to determine whether the company is able to meet its obligations.

Solvency analysis is impossible to be made using disparate indicators of financial and economic activity and liquidity, built on the basis of financial statements. The most objective are the factor discriminant analysis models of bankruptcy. [1]

Altman innovation lies in the selection of indicators and, more importantly, the weights (coefficients), which in the formula are multiplied by these indicators and in the evaluation of the resulting values. His conclusions Altman made based on an analysis of American companies for a number of years. In addition, there are different models for companies whose shares are publicly traded, and for non-public companies.

Because of industry characteristics, different economies, different countries, Altman model should be used with caution, without placing great hopes on it. It is recommended to draw conclusions about the financial situation of the organization and the likelihood of bankruptcy not only on the basis of this indicator, but also on the results of the analysis of a wider range of indicators.

Altman's model with five factors, designed for the agricultural enterprises of Zhytomyr region is shown in Fig. 1.

Fig. 1. Altman model for agricultural enterprises of Zhytomyr region

According to the results of the evaluation, taking into account the key performance characteristics for the z-count value, which is less than 1.23, determines the failure of the enterprise. This group includes in the first place economic entities, which values of the index is negative, that`s why they include - STOV "Lіschinske" PSP іm. Chkalova, PSP "Progres", SVK "Svitoch". Also, financially stable enterprises from the researched entities include CPP "Lad", TOV "Shans", TOV "Zhitomirnasіntrav" SVK "Svitoch" STOV "Ukragrotehtreyd" FH "Tsarіtsino" FH "Luke-Agro" and others. The majority of enterprises according to the Altman assessment are developing steadily and have prospects for effective development.

However, the key limitation of this method is the classical probability - the characteristics of the general population of events. Considering the separate enterprise, we describe the probability of its ratio to the total group. Nevertheless, the uniqueness of every enterprise is that, it can survive under very faint chances, and, of course, vice versa. Individuality of the enterprise destiny pushes a researcher to look at the enterprise closely, decrypt its uniqueness, and to diagnose and describe the differences.

Therefore, the model estimates of the probability of bankruptcy by Altman is the most common discriminant score. However, in most cases, it brings uncertain results and the likelihood of its estimation is approximately 70% (especially for the national enterprises). Therefore, many scientists attempted to adapt this model to the realities of the present to build a universal model for the long term.

References:

1. Financial statements of agricultural enterprises in Zhytomyr region for 2012-2014. / Hd. Exercise. agribusines. development of the state. Administration of Zhytomyr. region. - Zhytomyr, 2012-2014 years.

2. Altman E. Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy. / E. Altman // Journal of Finance. – 1968 – 9. – 589-609 pp.

3. Popov V. B. analysis models forecasting the likelihood of bankruptcy of enterprises / V. B. Popov, E. S. Kadurov // Scientists note Taurian National University them. VI Vernadsky. Economics and management. - 2014 - Vol 27 (66), № 1. - P. 118-128.