Going concern, COVID and bankruptcy prediction: in Italy identified valid forecast ratios of bankruptcy prediction
Authors: Maria Silvia Avi Prof. , Baldassa Giulia Dr. 
Published: August 2022

In this paper, a theoretical and operational analysis was carried out on the issue of going concern. First of all, from a theoretical point of view, the subject of going concern has been examined in-depth to explain how the Covid-19 health emergency has impacted the companies' ability to carry out their activities shortly. It also achieves this aim by implementing operational research having as its object forty companies belonging to three macro-sectors: industrial, financial services and non-financial services, whose stocks make up the Italian stock exchange index Ftse Mib (Financial Times Stock Exchange Milan. The FTSE MIB is the benchmark stock index in Italy. It consists of a basket of 40 stocks on the Euronext Milan and Euronext MIV Milan markets identified by capitalisation, trading volume and sector). The theoretical and operational analysis of the concept of going concern was carried out considering, also, the bankruptcy alert indices identified by the Italian National Council of Chartered Accountants and Accounting Experts. These indicators were introduced by Italian legislation with the entry into force of the new Code of Corporate Crisis to identify possible economic and financial instability situations before the state of crisis. The research, as mentioned above, was carried out using the alert indices recognised by the National Council of Chartered Accountants and Accounting Experts. This research emerged that these indices are actually predictive of a company crisis. It also completed the study illustrated in this paper by comparing the results of the bankruptcy's predictive alert indices and Altman's Z-score. It reached the trends identified by the alert indices with the results obtained from Altman's Z-score, and from this comparison, it can see that the final results are similar. The comparison between the alert ratios illustrated by the National Council of Chartered Accountants and Accounting Experts and the results of Altman's Z-score allows us to affirm two observations: undoubtedly, the alert ratios are characterised by a high predictive validity regarding the bankruptcy of companies and, in addition, that these ratios lead to similar results to those that can obtain by applying Altman's Z-score. In this paper, a theoretical and operational analysis was carried out on the issue of going concern. First of all, from a theoretical point of view, the subject of going concern has been examined in-depth to explain how the Covid-19 health emergency has impacted the companies' ability to carry out their activities shortly. It also achieves this aim by implementing operational research having as its object forty companies belonging to three macro-sectors: industrial, financial services and non-financial services, whose stocks make up the Italian stock exchange index Ftse Mib (Financial Times Stock Exchange Milan. The FTSE MIB is the benchmark stock index in Italy. It consists of a basket of 40 stocks on the Euronext Milan and Euronext MIV Milan markets identified by capitalization, trading volume and sector). The theoretical and operational analysis of the concept of going concern was carried out considering, also, the bankruptcy alert indices identified by the Italian National Council of Chartered Accountants and Accounting Experts. These indicators were introduced by Italian legislation with the entry into force of the new Code of Corporate Crisis to identify possible economic and financial instability situations before the state of crisis. The research, as mentioned above, was carried out using the alert indices recognized by the National Council of Chartered Accountants and Accounting Experts. This research emerged that these indices are actually predictive of a company crisis. It also completed the study illustrated in this paper by comparing the results of the bankruptcy's predictive alert indices and Altman's Z-score. It reached the trends identified by the alert indices with the results obtained from Altman's Z-score, and from this comparison, it can see that the final results are similar.