Tax & Audit

Business Crisis -Alert Indices-

The law of 12 July 2022 and more specifically the Legislative Decree no. 83/2022 introduced new features regarding the appropriate structures (organisational, administrative and accounting), already governed by art. 2086 of the civil code currently in force, with the aim of performing the function of promptly detecting the crisis and the loss of business continuity. In the event of default, the failure to adopt the organisational, administrative and accounting structures may constitute liability for the directors, and where existing, also for the legal control body, where it is ascertained that they are not activated in time.

M|Research supports through a specialized analysis with a focus on the specificity of the sector:

the provision of control tools capable of monitoring the health of the business
the validation of the alerting system through a multivariate scoring system

The implementation of the study envisages two levels of analysis aimed at the preparation of two six-monthly reports aimed at the constant monitoring of the adequate structures (art.2086 of the civil code):

1. Econometric Analysis. At a first level of analysis, M|Research estimates, over a ten-year period, a forecasting model aimed at:

• Identify statistically significant indicators in predicting the onset of a company crisis taking into account the specific sector in which the company operates;

• Estimate the company’s “probability of crisis” by comparing it with that of the other companies in the sample (benchmarking analysis)

2. Analysis by indices. At a second level of analysis conducted on the basis of the indicators of the financial, income and equity area considered most significant by M|Research:

• Statistically defines “sectoral threshold values”, which if exceeded jointly, are to be understood as generators of a state of “crisis alert”;

• Compares the corporate value of these indicators in the last two or three years, with the identified threshold values, in order to detect any imbalances, and conducts a benchmarking analysis using the statistical moments of the sectoral distribution of the various indicators.