Journal of Accounting and Management Information Systems (JAMIS)

Crisis diangostic. Means of improvement for companies in financial distress

3/2003 ,   p24..32

Daniela ŢUŢUI

Keywords:   uncertainty, risk, financial distress, competition

Any firm is exposed to uncertainty or risk and some firms do not succeed. Managers of the firms which have financial difficulties should be able to improve situation before it becomes too acute. When the difficulties of the firm advance, relationships with partners turn into conflicts and a normal activity of the firm becomes impossible. It isn’t easy to analyse the causes (factors) which produce financial distress of a firm. Decreasing of demand, the competition on markets, reduced production which affects profitability, the difficult access in financing are all factors that hold back the activity of a firm and create financial distress.