This paper is focused on the financial situation of enterprises introducing safeguard procedure (in other words moratorium) in the Czech Republic. The paper’s aim is to show if the enterprises asking for the safeguard procedure do have financial conditions for recovering and maintaining the going concern principle. The safeguard procedure should help the enterprise to solve their problematic situation because it protects them against creditors for the court approved time period. The safeguard procedure cannot be successful when the financial situation is extremely poor and therefore this paper analyses the enterprises’ financial situation upon applying for safeguard. The situation is evaluated using bankruptcy models, such as Altman Z-Score, Kralicek Quick Test, IN 99 and IN05. The evaluation is conducted in different time moments, specifically one year, two years and three years before implementing the safeguard procedure. Results for the individual enterprises are summed up by basic descriptive statistics as mean, median, low and upper quartiles. The results show that the financial situation of most enterprises was very poor before introducing the safeguard procedure and it had deteriorated during the years before.

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Financial Characteristics of Pre-Moratorium Companies This article presents the outcome of research focused on financial characteristics of companies declaring a moratorium. The key purpose of the moratorium is to avoid threatening bankruptcy. The aim of the research is to identify the financial situation of the companies entering the moratorium process. The main objective was to find the answer to the core question whether there is any chance of avoiding bankruptcy using the moratorium, that is, whether the moratorium fulfils its basic function. The research is based on a quantitative analysis of selected financial ratios and synthetic indicators and their mutual relations. The analysis looks for an answer to what financial indicator levels were characteristic for the companies launching the moratorium mode of operation and what these levels indicated. The research results prove that the financial situation of the companies entering the moratorium process was unsatisfactory. It is even possible to conclude that the companies were in the last stage of their corporate crisis. This situation shows that the probability of avoiding bankruptcy was extremely low.

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