Predicting the Risk of Company's Bankruptcy in Manufacturing Industry

This work is devoted to forecasting the bankruptcy of companies in the manufacturing industry in Russia. The bankruptcy of organizations affects the interests not only of company executives, but also the interests of investors, creditors and the state. In addition, the manufacturing sector is one of the most important parts of the Russian economic complex. The purpose of this study was prediction the risk of companies’ bankruptcy on the example of the manufacturing industry, as well as identifying factors that have an impact on the risk of bankruptcy. As a method of forecasting bankruptcy, a survival analysis was chosen. Also, logistic regression was used because of its popularity in research. The work analyzed Russian companies that are related to medium and small businesses. It was found that Cox's regression with time-dependent covariates better predicts the risk of bankruptcy compared to logistic regression. Cox's regression showed that following factors affect the risk of bankruptcy: profitability of the organization, return on assets, asset turnover, cash in the overall structure of assets, and the share of long-term sources in the overall structure of assets.