DETERMINING THE EFFECTIVENESS OF THE ENTERPRISE'S REMEDIATION MEASURES

Abstract

Financial restructuring is a key mechanism for maintaining the viability of enterprises in crisis and plays an important role in preserving their economic activity. It aims to restore solvency, strengthen financial stability, and enhance the company’s competitiveness. With a well-developed restructuring strategy, businesses can overcome financial difficulties, avoid bankruptcy, and lay the foundation for sustainable future growth. The main objectives of financial restructuring include reducing debt levels, restoring liquidity, improving asset utilization efficiency, and enhancing the overall financial position of the enterprise. Depending on the specifics of the crisis, different restructuring mechanisms may be applied. These include crisis management, which involves developing measures for financial recovery; debt restructuring, which includes negotiations with creditors to revise payment terms; raising additional financial resources through investors, loans, or securities issuance; cost optimization, which allows for reducing non-core expenses and improving profitability; business diversification to find new sources of income; and mergers or acquisitions that help strengthen market positions. The effectiveness of restructuring measures directly depends on a thorough financial analysis of the enterprise, risk forecasting, and the development of a strategy to overcome the crisis. A crucial tool in this process is financial analysis, which helps assess the company's current state and determine the most effective recovery measures. Business planning plays a key role in developing restructuring measures, as it helps prioritize actions, allocate resources, and formulate strategic objectives. Banks can provide significant support to enterprises in the restructuring process by offering debt refinancing or credit obligation restructuring mechanisms. Additionally, the government can play a crucial role in financial recovery by providing financial aid, tax incentives, or subsidies. Another method of improving financial stability is the sale of non-core assets, allowing companies to generate additional cash for debt repayment and investment in core activities. A key factor in the success of financial restructuring is attracting external investors willing to invest in the company's recovery. These may be strategic investors interested in the company’s development or financial investors seeking to benefit from its future growth. A comprehensive approach to financial restructuring not only helps overcome financial difficulties but also creates the conditions for sustainable business growth and development. The successful implementation of restructuring measures contributes to restoring the trust of creditors, partners, and consumers, which, in turn, strengthens the company’s reputation and enhances its competitiveness in the market.