KEY INDICATORS OF FINANCIAL RESTRUCTURING OF DEBT OF ECONOMIC ENTITIES

Abstract

This article examines the need for the timely diagnosis of potential insolvency threats facing business entities. It proposes a system of key indicators to signal the need for financial debt restructuring, indicating a critical financial condition associated with the inability to fulfill monetary obligations. This system includes absolute and relative indicators, along with algorithms for their calculation, interpretation, and recommended values.
The study notes that recommended values must be differentiated by industry, an issue not yet addressed in national methodologies approved by Ukrainian executive authorities. Furthermore, there is a long-standing need to unify analytical indicators (e.g., terminology, formulas) for corporate and statistical reporting. Addressing this is particularly important for Ukraine’s post-war restoration to activate investment activities.
The research investigates the functional relationship between the ratios of short-term debt burden to sales, total assets, and the ability of assets to generate economic benefits. An imbalance in these ratios threatens business continuity, leading to the potential need for debt restructuring. The proposed system of indicators is tested across various economic activities, making it possible to identify their functional dependencies, critical points, and impact on the potential need for financial debt restructuring.