Grygorenko E. Analysis of external and internal factors determining machine-building enterprises’ crisis

Abstract

The paper shows that financial condition ofmachine-building industryhas deteriorated significantly over the past several years. Consequently, crisis state ofmachine-building enterprisesis caused by externalnegative factors, as well as the internal ones, that affect thefunctioning of these enterprises and their further development too. The overall purpose ofthis paper is to analyzeandassess the impact of the external and internal factorson the formation of the financial and economic situation of machine-building enterprises. The internal and external factorsthat determine machine-building enterprises’ crisis are investigated. The correlation and regression are used to determine the actual relationships between the variables, which are as follows: the index of industrial production of the machine-building industry enterprises and producer price indexesfor all machine-building products, and the total volume of mastered capitalinvestments, and the producer price indexof industrial production(electricity). Analysis of thequality of the modelled us to the conclusionthat it is empirically adequate andcan be used toanalyze the impact ofexternal factorson the formation of machine-building enterprises’ crisis. We did exactly what needed to be done in order to find a solution to this problem: the correlation and regression models were built to determine the strength of the relation between various internal factors and the financial indicators, which are connected to machine-building enterprises’ crisis, including the rate financing, the return on assets and the Beaver ratio. On the basis of the analysis of the qualityof the constructed models it is recognized that theyare quite adequate andcan be used toanalyze the impact of the external factorson the financial and economic situation of an enterprise. The findings of the study indicate that the proposed correlation andregression models, which includefinancialindicators and ratios,have the following advantages: they are basedon a comprehensive analysis; they are ableto identifyenterprises thatare experiencing financial difficulties and having a hard time; and, finally, they make it possible topredict themovement ofthe machine-building enterprisestowards bankruptcy