Acta Universitatis Danubius. Œconomica, Vol 13, No 3 (2017)

Internal Factors of Albanian Entities Bankruptcy

Eni Numani

Abstract


Studies on the causes of entities' bankruptcy have significantly increased due to its impact on several stakeholders (financial managers, shareholders, customers, suppliers and creditors, employees of the entity and the economic life of the country in which the entity operates) and due to the high direct and indirect costs incurred. Given that external factors (related to the environment in which the entity operates) are out of the entity's control, this paper will be focused only on internal factors of bankruptcy, which are influenced by the decisions taken by management. In this paper we have categorized internal factors into two groups: financial factors and non-financial factors. Financial factors are mainly linked to the decisions made by financial managers on cash and financing resources management, while non-financial factors mainly refer to the decisions taken by management of the entity regarding recruitment of senior managers and all other employees, and lack of the planning activity as well.

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