Application of Scenario Analysis for Diagnostics of Enterprise Bankruptcy

Abstract

The diversification and integration of economic relations between different market participants requires improving the quality of prospective analysis. Scenario analysis is a most effective tool to formulate options for the future economic development of an enterprise and financial insolvency prevention. The study of the future state of the enterprise based on economic diagnostics makes it possible to organize a system of managerial actions aimed at reducing the consequences of unfavorable situations and preventing its possible bankruptcy. In this context, the paper discusses the methodological aspects of using scenario forecasting based on economic diagnostics to optimize financial performance and prevent the insolvency of an enterprise.

The developed approach to scenario analysis that considers the technological features of the enterprise enables to elaborate predictive scenarios for making managerial decisions that reduce the risk of bankruptcy. The results obtained during the research can be applied in practical management to analyze and develop the future growth directions of the enterprise.