The assessment of bankruptcy risks of construction companies

Abstract

Companies don’t fail on a day by Day basis. Usually the decline of a economic unit is accompanied by decreasing economic and financial situation over an extended period of time, which is usually five years, according to the literature.  Therefore, companies have time to react and undertake appropriate countermeasures, but they need to be aware of risk’s existence and it’s scale. To identify such risk companies use early warning systems (Zaleska, 202, p. 9-10).

In this article symptoms indicating at declining standing of a company, early warning systems’ essence and their classification are shown. Sample systems identifying economical and financial difficulties of companies were described and using chosen early warning systems the assessment of risk of the bankruptcy of public limited companies Budimex, Erbud and AWbud was performed, based on the financial data of the examined companies from years 2012-2015. Aim of the research paper is to bring to reader’s attention the enormous significance of early warning systems and their practical applications.