Table presents a summary of computations showing bankruptcy
Table 5 presents a summary of computations, showing bankruptcy probability of wind electricity producing companies in the Baltic States. However, when analyzing the results the following aspects should be taken into account:−firstly, data of the year 2009–2013 are analyzed. This is a period of economic recession and slow recovery of economies in the Baltic States. During this period companies of the countries practically independently of the sector they belonged to had financial problems, including liquidity, solvency, profitability and efficiency of assets utilization;−secondly, in 2009 the Directive on renewable Daunorubicin HCl sources was accepted. It gave a stimulus for wind electricity sector development and establishment of new companies. It is difficult to expect that newly established companies could demonstrate good results. Controversially, the world experience shows that namely young and immature companies get bankrupt more often. Besides, during this period wind PPs were constructed. This means that cost in companies increased. Since electricity production process was not in place there was no sufficient revenue to cover cost and earn profits;−thirdly, structure of wind electricity companies is unique. Namely, they have a lot of assets, which are a result of investment into wind PP, land and other equipment. Thus, fixed costs of companies are high. Electricity production highly depends upon the climatic conditions and thus is volatile. Although stable support is provided to electricity producers, however, due to instinct volatile nature of electricity production, turnover (sales revenue) is unstable and uncertain. Thus, profitability of companies is volatile and seasonal; and−fourthly, bankruptcy forecasting models have their limitations. Namely, they constructed based on data and assumptions which were valid during 1970–1980, but today business environment changed. Models focus only on financial data and they differ in a number of financial ratios included into the models. Thus, mold is necessary to consider these limitations.