The Danube Region

In most of Danube region countries, there are no tools for analysing the financial data, which can be applied to second-chance SMEs. Although the economic performance of companies is monitored by banks in which companies have their liabilities, no financial tool that may help entrepreneurs to judge the situation of their businesses have been identified. Especially smaller companies are not able to analyse their market position analytically and may easily go into the crisis. Therefore, it is essential to establish efficient mechanism that will help entrepreneurs to identify and fix potential problems in advance.

RELEVANT INDICATORS

The identification of relevant indicators as a basis for the establishment of early warning system is important process, based on which immediate intervention of company’s management is allowed. In other words, the time is crucial element for financial risk detection. The awareness of factors that contribute to making a business successful is important and it is also applicable for understanding of financial performance and potential bankruptcy. Companies should take necessary actions in response to their financial problems as soon as possible, not when their problems are beyond their control. Although there is no full prevention against the financial crisis of enterprise, establishment of early warning system and creation of possible emergency plan towards potential crisis in necessary measure for SMEs.

DanubeChance2.0

For this reason, the partners within DanubeChance2.0 project decided to develop the methodology for financial model for entrepreneurs assessment based on the analysis of selected financial indicators in order to assess the financial situation of the company.