Prediction of corporate (non)success through financial statements

The globalisation of economics has created unstable business environment which requires both the prediction of changes and a fast adaptation. In the world of advanced technology development and continuous development of innovations, making the right and timely decisions is of crucial importance for business survival. Business crisis can be caused by bad or untimely decisions within the company or by the influence of various external factors. In order to minimize the risk of business crises, it is necessary to analyse continuously the business of the company. It is also extremely important to predict potential dangers which can harm development and business survival. The crisis endangers the company's existential goals. Therefore a timely recognition of the first crisis signals is of crucial importance to the company's future. Crisis management is a process implemented through three phases: preventive identity management and reactive management. The emphasis is put on preventive management respectively in order to identify the onset of crisis. The timely observation of crisis applying appropriate methods and instruments has for the goal to repress crisis at the very start, that is before it endangers business survival. The purpose of the conducted research, with help of financial proportions from financial statements is to determinate how much earlier a crisis signals appear, before the crisis begins and seriously jeopardizes the existence of the companies of Croatian manufacturing industry.