Financial distress and financial restructuring of companies – determinants and effects

Małgorzata Porada – Rochoń

Purpuse – Businesses in a changing environment characterized by uncertainty, risk, and diversified threats exacerbate the occurrence of financial problems at both mac-ro and non-macroeconomic levels. The fact of late identification of the symptoms of the financial distress or its lack may result either in the need to implement an ex-tensive array of financial restructuring tools and actions, and in the extreme case may lead to bankruptcy.
The purpose of this article is to identify the determinants most affected by the fi-nancial distress in enterprises as well as the analysis and assessment of the most ef-fective tools and measures to tackle the financial distress of financial restructuring
Methodology – The study was conducted in April 2015 on the request of 100 small and medium-sized enterprises in the Zachodniopomorskie voivodship. The collected baudrate is cross-sectional microdata derived from questionnaire surveys. The sur-vey database contains 100 observations. Random sample selection. There were, among others analysis of the main components Also reviewed and analyzed litera-ture primarily called. Related work.
Findings – There is a large variation in the determinants that influence the occur-rence of financial distress in the surveyed companies. Taking into account the weighted average, the respondents included price fluctuations (availability), political conditions, and economic situation in the country – as factors most determining the financial distress. Managers as the most successful financial restructuring actions pointed to a reduction in investment spending by abandoning investments and rene-gotiating contractual terms. Both actions are part of a broadly understood cost reduc-tion program and are of a stabilizing nature.

Financial distress and financial restructuring of companies – determinants and effects


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