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Corresponding author:
1 National Aviation University, Ukraine.
E-mail: 0660105265@ukr.net
ORCID: https://orcid.org/0000-0003-3479-5019
ResearcherID: https://publons.com/researcher/ААС-3889-2019
2 National Aviation University, Ukraine.
E-mail: tan3000@ua.fm
ORCID: https://orcid.org/0000-0002-2010-307X
ResearcherID: https://publons.com/researcher/S-3805-2018/

DOI: https://doi.org/10.30525/2661-5150/2020-2-7

DIAGNOSTICS OF CRISIS CONDITIONS  
OF THE AVIATION ENTERPRISE

Larysa Turova1, Tetiana Gavrilko2

Abstract. The purpose of the article is to study the systems and methods of diagnostics of the crisis conditions of 
the aviation enterprise, to justify the role of controlling as a management accounting system in the detection and 
prevention of crisis phenomena, to clarify the mechanism and iterations of diagnostics of the crisis conditions 
taking into account the use of appropriate management systems. Methodology. The key provisions of economic 
and financial theory, methodological and methodological principles of crisis diagnosis of enterprises, presented 
in the works of Ukrainian and foreign scientists, were used as the theoretical basis of the study. The application of 
a systemic approach allowed to analyze the essence of diagnostics of crisis conditions, its purpose and objectives. 
The methods of logical generalization used in the research process allowed to formulate the conclusions on 
the conditions for the effective implementation of diagnostics of crisis conditions based on improving of the 
functioning of management accounting systems and management systems. Results. The study allowed us to 
analyze the factors that causing crisis conditions in the aviation industry. The main methods for diagnosing crisis 
conditions are analyzed placing emphasis on the special place that belongs to management accounting and the 
use of management systems when diagnosing crisis conditions. The basic provisions of effective organization of 
management accounting at aviation enterprises to form the information base at development of the strategy 
for crisis prevention or recovering from crisis conditions are defined. The peculiarities of diagnostic analysis 
of the financial condition of the enterprise as a system of diagnostic methods are identified; on the basis of a 
systemic approach, they allow to establish causal changes in the economic system through quantitative and 
qualitative measurement of the influence of factors on adjustments and development. Features of different types 
of diagnostic analysis depending on the hierarchy in the management system, goals and directions of analysis, as 
well as the availability of information about the problem areas of the enterprise, are discussed. Tasks that need to 
be implemented to achieve the goal of diagnostic analysis are specified. The necessity of diagnostics of possible 
crisis conditions of the aviation enterprise with simultaneous risk research and its influence on financial stability 
of the investigated object is justified. The system of indicator values for diagnostics of a financial condition of the 
aviation enterprise is offered. The sequence of calculations for the implementation of monitoring and controlling 
process of the financial condition of aviation enterprises is presented. Practical implications. The approach for 
diagnosing financial condition of the enterprise, which allows to identify the symptoms and threats of the 
financial crisis and to develop the policy for prevention (anticipation) of weak signals of a crisis situation based 
on the analysis, is justified. The conditions of effective application of management accounting systems on the 
basis of monitoring and controlling and modern methods of diagnostics of the financial condition of aviation 
enterprises are determined. The directions for improvement of analytical activity on the basis of information 
systems and technologies for the aviation industry are justified. Value/originality. Results given in the article can 
be used for further research on the problem of diagnosing the crisis conditions of aviation enterprises. 

Key words: crisis conditions, diagnostics, management accounting, controlling, monitoring, financial analysis, 
aviation industry.

JEL Classification: G33, L26, L64



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1. Introduction
The crisis conditions and bankruptcy are integral 

elements of the development of any industry in 
the market. The crisis resulting from the pandemic 
has caused record losses of the aviation industry, 
amounting to 84 billion USD. The International Air 
Transport Association (IATA) has named 2020 the 
worst year in the history of aviation. According to 
experts, next year will not make a full recovery and 
although the projected growth may be 55%, the 
performance of aviation companies will be 29% 
lower than in 2019. 

According to experts, the Ukrainian aviation 
industry will need at least one and a half to two 
years to reach the pre-quarantine period. The 
problematic situation has also developed with the 
aviation enterprises. The crisis in the pandemic has 
worsened even more due to untimely government 
orders, which are the main share in the production 
program for many companies. 

The slowdown in Ukraine's economic 
development as a whole is caused by other reasons 
of domestic and external origin, namely: declining 
demand for Ukrainian exports, the geopolitical 
situation in Southeastern Ukraine. The recent 
global financial crisis has affected all spheres of 
social production; the aviation industry and the 
service sector (air transportation) are no exception. 

The reasons for these problems to occur were 
mainly objective in nature. At the same time, an 
important place belongs to subjective reasons: 
inefficient use of crisis management tools both at 
the state level and at the enterprises themselves. 

There is an obvious need to find and implement 
measures to increase the effectiveness of the 
aviation industry and the aviation enterprises, 
which requires both systematic research and 
practical action on successful ways to prevent crises 
and overcome them. 

Thus, at present, the formation of diagnostic 
systems for the aviation enterprises, which will 
promote their crisis management, makes special 
sense. The tasks of management accounting in the 
creation of such diagnostic systems should be to 
form an information base on controlled indicators 
and provide them to stakeholders for analysis and 
further management decision-making. 

2. Tasks and methods of diagnostics  
of the crisis conditions

In the work of the aviation industry (AI) in recent 
years, there has been a deterioration in the financial 

and economic condition of enterprises, most of 
which are still operating at a loss. Thus, the current 
state of the AI of Ukraine cannot be considered 
anything other than a crisis. 

The government should currently contribute 
to the further development of AI. Ukraine has 
great prospects for the development of the aircraft 
industry due to the high demand for domestic 
aircraft in the world, which AI of Ukraine is trying 
to meet. However, the enterprises themselves must, 
first of all, take measures to overcome the crisis, 
properly assessing their current positions and, 
taking into account their strengths and weaknesses, 
form an adequate development strategy. 

The process of diagnostics of the crisis conditions 
of aviation enterprises should be aimed not only at 
creating an information system that would provide 
a comprehensive and systematic assessment of all 
activities of enterprises, including key financial 
indicators, but also to identify opportunities for 
improvement. 

The purpose of diagnostics of the crisis conditions 
is timely recognition of signs and nature of trends 
in the functioning of enterprises, identification 
of factors that cause negative consequences, the 
formation of an effective program to prevent further 
development of crisis phenomena by improving 
the relevance of enterprise management. 

The initial result of diagnostics is the adoption of 
optimal decisions, taking into account the features 
and characteristics of the situation that arose, 
to adjust the operation of all components of the 
system and ways to implement them on the basis 
of assessing the degree of impact of harmful actions 
on the deviation in criterial values. 

The task of diagnostics is not only to assess the 
condition of the object at a particular time, but 
also to predict its behavior after the application of 
appropriate measures, as well as in the absence of 
corrective action to improve the situation. 

Depending on the policy of the top management, 
the peculiarities of the enterprise, the availability 
of personnel of the appropriate qualification, the 
following methods of diagnostics of the crisis 
conditions can be used: 
– analytical, based on contactless methods due to 
statistical information, the use of a comprehensive 
analysis of financial and economic indicators of the 
enterprise; 
– expert, which gives the opportunity to evaluate 
the information from experts presented using 
contact methods; 



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– dynamic programming based on solving 
management problems using mathematical models; 
– linear programming allowing you to optimize the 
achievement of a quantified goal. 

3. The role of management accounting  
in the diagnostics of the crisis conditions

In the diagnostics of the crisis conditions of the 
aviation industry, management accounting and 
the use of appropriate management systems are of 
particular importance. 

Management accounting (MA), or internal 
accounting, means the collection and analysis of 
information for the management of the organization 
at all levels. 

It is a misconception of many managers that 
MA is a subsystem of accounting and is limited to 
the field of finance, because it allows you to track 
unacceptable deviations of the actual parameters 
of the enterprise from planned (regulatory) 
elements, identify their causes and make informed 
management decisions. 

In order for the MA data to lead to the desired 
result, the following actions must be performed: 
– To identify the main objectives of the structural 
units of the enterprise, which should be consistent 
with its mission and overall development strategy. 
– To specify the sub-goals and objectives with 
the definition of indicators for assessing the 
effectiveness of their achievement. 
– To determine the main and secondary indicators 
of importance for each task. 
– To distribute benchmarks based on the functions 
of responsibility centers. 
– To establish target values of control indicators, 
which will ensure the possibility of implementing 
the processes of forming plans and monitoring 
their implementation (Burkovska, 2012). 

The obtained results of management accounting 
can serve as an information basis for further analysis 
and development of a strategy for crisis prevention 
or crisis management. 

It is very important to assess the possible 
preconditions and results of changes that could 
affect the activities of the aviation enterprise in order 
to identify threats and prevent the development of 
crisis phenomena. 

To implement the tasks of preventive crisis 
management, it is mandatory to conduct preventive 
monitoring of the enterprise environment, 
both internal and external, the formation of the 
information base on indicators that reflect the level 

of success of the enterprise determining the vector 
of possible actions to identify crisis threats.

Thus, one of the most important tasks of crisis 
management is to diagnose the state of the aircraft 
industry, the use of effective tools for diagnostic 
analysis, which will create a basis for assessing the 
performance of the enterprise and will be the basis 
for adequate decisions on further development. 

4. Features of diagnostic analysis  
of financial condition

Diagnostic analysis is a type of analysis that 
differs in goals, objectives and includes a system 
of diagnostic methods that, based on a systematic 
approach, allows to establish causal changes in 
the economic system through quantitative and 
qualitative measurement of factors influencing 
this change and development. Taking into account 
the goals and directions of diagnostic analysis, the 
possibility of obtaining comprehensive information 
on the areas of activity of the enterprise, which fall 
into the "problem" area, the decision is made to 
choose one (or more) of the existing types: 
– diagnostic rapid analysis; 
– comprehensive diagnostic analysis; 
– diagnostic analysis of functional areas; 

diagnostic analysis of thematic issues (in 
particular, diagnostic analysis of financial 
condition). 

The purpose of the diagnostic analysis of the 
financial condition of the enterprise is to identify 
existing and potential deviations from stable 
operation on the basis of typical features that are 
specific only to this violation, prevention (control) 
of their occurrence and transformation into 
"bottlenecks", which can delay the achievement of 
goals and objectives, jeopardizing both current and 
strategic activities. Based on the above, diagnostic 
analysis of financial condition can identify 
"symptoms" of economic illness. 

To achieve this goal, the diagnostic analysis of 
financial condition should solve the following 
tasks: 
1) systemic comprehensive organically intercon-
nected study of external and internal environmental 
factors that describe changes in the environment 
of the enterprise to identify threats and new 
opportunities (this applies to both global and 
specific economic environment); 
2) timely identification of factors that ensure 
sustainability or lead to a breach of financial 
condition in the short and long term; 



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3) determination of the target parameters of the 
enterprise and the criteria for assessing their impact 
on its financial condition at each stage of the life 
cycle; 
4) determination of the causal links between 
changes in factors and the system (because a 
change in any factor can change the whole system) 
and measuring changes in financial condition 
(economic system) in quantitative and qualitative 
terms from the negative impact now and in the 
future; 
5) building of a model for assessing and diagnosing 
the financial condition for different uses of 
resources; 
6) determination of the degree of risk of a crisis 
situation at any stage of the life cycle; substantiation 
of the limit of the enterprise's entry into crisis; 
7) development of a system of measures aimed 
at finding ways to prevent bankruptcy, the 
development of managerial influences in order to 
bring the system in the right direction and further 
strengthen the financial condition. 

Since there is a problem in obtaining a unified 
idea of the object of study as a system as a whole 
in the process of diagnostic analysis, diagnostic and 
systemic analysis are closely intertwined. At present, 
such problems are related to the lack of a single 
methodological basis for reliable determination of 
the financial condition of the airline or operating 
company (air carrier, airport, etc.). 

Therefore, the diagnostics of the possible crisis 
conditions of the aviation enterprise should include 
a study of risk and its impact on the financial 
stability of the object under study. 

Risk assessment is based on a comprehensive 
(scientific, technical, technological, marketing, 
sociological, etc.) research of the object of 
study, taking into account external influences, 
construction and analysis of the chain of events 
under the conditions of various risk factors. 

Studies show that to date there is no complete 
system of risk assessment indicators. In our opinion, 
the basic methodological principles of forming 
a system of controlling and diagnostics of the 
financial condition of the aviation enterprise and 
the development of a set of initial risk indicators 
include: 
– compliance of the system of indicators with the 
objectives of the study, which means their ability 
to identify and assess the degree of influence 
of a certain group of risk factors on the object of 
diagnosis (industry or region for the meso level); 

– availability and accessibility of information 
support for empirical research; 
– the presence of a sufficient number of research 
periods to form a certain trend of changes in the 
values of the indicator (all periods must be the 
same); 
– providing the possibility of forming a statistical 
base, which would contain information on the 
level and dynamics of change of indicators, which 
would be a prerequisite for the development of risk 
assessment models; 
– quantitative measurability; 
– the availability of conditions for the construction 
of adequate algorithms for calculating indicators; 
– a high degree of variability and relative awareness, 
a clear and unambiguous definition of the nature of 
the impact on the level of risk of the object of study; 
– the optimal number of indicators from each 
area of research, the exclusion of indicators that 
duplicate each other. 

To implement the process of monitoring and 
controlling the financial condition of airlines, we 
offer the following algorithm of calculations: 
– determining the availability and size of possible 
financial resources on the basis of calculating the 
value of the current business of the enterprise; 
– determining the level of security and efficiency 
of attracting financial resources based on the 
calculation of a system of analytical indicators and 
indicators of financial condition; 
– analysing the level of organization of financial 
management; 
– the formation of an integrated indicator as the 
main indicator of the availability and use of financial 
potential, which allows to predict the future state 
of the enterprise, to identify financial reserves 
and opportunities, to increase the efficiency of 
management in general. 

At the same time, their successful functioning in 
the modern business environment is impossible 
without a defined strategy for the development of 
aviation enterprises (Voronkova, 2017). Ensuring 
a stable position in a competitive business space 
and increasing entrepreneurial capital is possible 
only if the management of aviation enterprises 
forms an effective development strategy. 

5. Approaches to the diagnostics  
of the crisis conditions

The generalization of literature sources and 
practices of aviation enterprises allows to single out 
the list of indicators that will diagnose the financial 



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condition of the enterprise, identify symptoms 
and threats of the financial crisis and based on the 
analysis to develop a policy to prevent (anticipate) 
weak signals of crisis situation. 

In our opinion, the main independent indicators 
for assessing the financial condition of the 
enterprise should include: 
– Asset mobility (Current / Non-current assets). 
– Accounts payable turnover (Net sales income / 
Current liabilities). 
– Return on equity (Net sales income / Equity). 
– Return on assets (Balance / Net sales income). 
– Provision with own current assets ((Current 
assets – Current liabilities) / Current assets). 
– Concentration of loan capital (Long-term 
liabilities + Current liabilities) / Balance sheet). 
– Debt coverage with equity ((Equity / (Ensuring 
subsequent expenses and payments + Long-term 
liabilities + Current liabilities)). 

Modern scientific literature sufficiently covers 
the issue of assessing the financial condition of 
the enterprise, taking into account the industry 
characteristics of its operation. From the available 
variety of financial indicators, the manager, owner 
or other person who makes financial decisions can 
choose the most adapted ones to the specifics of 
a particular enterprise. 

A financial ratio can be a criterion for making 
a management decision, if it has a constant 
calculation algorithm for the enterprise and it is set 
by the owner, manager or state regulatory or target 
value. According to M. Bartoli, these requirements 
are met by such financial indicators as:
– liquidity ratios (the literature shows the 
standard values, at the same time it is possible to 
set own standards, guided by the chosen policy of 
calculations); 
– coefficients of financial stability (the literature 
shows the standard values, at the same time it is 
possible to set own standards, guided by the chosen 
policy of calculations); 
– profitability ratios (usually there is an average 
industry value, the indicative levels of these 
indicators in competing companies are set by 
owners or managers); 
– turnover ratios (normative or recommended 
values can be used; when the management sets the 
lower limit of values, the specifics of the sphere of 
operation of the enterprise are taken into account); 
– coefficients underlying the models for 
determining the probability of bankruptcy (there 
is a sufficient variety of models of foreign and 

domestic scientists, adapted to the characteristics 
of certain economic sectors); 
– indicators of investment efficiency (characterized 
by a unified nature); 
– indicators of the conditions and movement of 
cash flows (relevant standards have commercial 
banks that use these indicators in assessing the 
creditworthiness of the borrower); 
– integrated ratios, which make it possible to assess 
the overall financial condition, financial stability, 
the feasibility of which is determined by the 
peculiarities of the assessment needs; 
– indicators of operational analysis (the criterion is 
the break-even point in kind or value, calculated at 
a particular enterprise); 
– indicators (standards) of risk (often determined 
by complex economic and mathematical models 
to establish standards require expert methods) 
(Chernysh, 2012). 

Given the sufficient effectiveness of factor analysis 
and diagnosis, assessing the financial condition, 
it is advisable to use the analysis of the dynamics 
and structure of the balance sheet, income and 
expenses, cash flow dynamics and more. Based 
on the characteristics of these indicators (use 
to characterize the process), it is problematic to 
determine their quantitative values (only some 
structural indicators can be an exception). 

For diagnosis it is not enough just to calculate 
the value of these indicators, you should be able to 
interpret the situation and assess the parameters of 
the actual financial condition of the enterprise AI. 

Due to the lack of a permanent list of evaluation 
indicators, according to Professor Blank I.O., 
theorists and practitioners in the field of diagnosis 
have an individual, often subjective, approach to 
solving this problem, so the use of computer tools 
to improve the reliability of the obtained results is 
justified (Blank, 2006). 

The presence of modern information technologies 
opens up new opportunities for management 
accounting (monitoring and controlling financial 
and economic activities), their use is a kind of 
driver of economic development. 

The use of traditional tools for the implementation 
of analytical procedures does not allow for timely 
and quality decision-making both in relation to the 
enterprise as a whole and for individual activities. 
The choice of modern information systems and 
technologies should be based on such factors as 
the cost of their acquisition and implementation, 
the level of their profitability, efficiency in terms of 



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achieving the desired goals for the company, staff 
skills, the need for analytical work and its volume 
(Bartoli, 1994). 

Implementation of processes for improving 
analytical activities based on information systems 
and technologies for enterprises with large volumes 
of operations is necessary, according to Theo 
Postma, for a number of the following reasons: 
– large capacity of information arrays used 
in enterprises and their diversity in terms of 
unification when used by different departments of 
the enterprise; 
– a variety of sources of information concerning 
both the external and internal environment; 
– lack of ability to process data online with the 
involvement of interested users (Postma, 1999). 

The outlined problems for aviation enterprises 
should be solved through the introduction 
of a computer information analytical system, 
which should be characterized by the presence 
of stages preceding the direct analysis of data 
using appropriate modern technologies (Data 
Warehouse, Data Mart) and analytical tools 
(OLAP, Data Mining). 

The use of standard professional software products 
"1C: Accounting", "PARUS", "Galaktika", SAP in 
the case of their adaptation to the peculiarities of 
the production activities of the enterprise requires 
additional costs; asset revaluation procedures are 
also quite time consuming, and although they can 
be performed on the basis of Microsoft EXCEL, 
it is obvious that this is insufficient for effective 
accounting in enterprises (Burkovska, 2012). 

Obtaining the results of management accounting 
allows the analysis of financial capacity, reserves 

and potential resources of the enterprise in order to 
form an anti-crisis program; it is important to have 
preventive measures to implement innovations in 
the aviation enterprise. 

6. Conclusions
The study has made it possible to establish 

that diagnostics in the aviation enterprises is an 
important means of achieving the goals of the 
enterprise, acts as a subfunction of the control 
function and should be based on the agreed use 
of all procedures of assessment, analysis and 
identification. 

Implementation of management accounting 
systems, based on monitoring and controlling 
and modern methods of ddiagnostics of crisis 
conditions of aviation enterprises, requires: 
– training (retraining, advanced training) of 
employees; 
– approbation of accounting procedures on real 
data of the enterprise for a certain accounting 
period (on a control example) with the involvement 
of system developers; 
– approval (adjustment) of permanent regulations 
for the operation of such systems based on the 
results of their experimental (trial) operation; 
– introduction of new automation systems for 
enterprise management to solve problems of 
financial diagnostics or adaptation of existing ones. 

Improvements in management accounting, as 
well as other further research on diagnostics of 
crisis conditions, will help to increase the efficiency 
of aviation companies and prevent the threat of 
their bankruptcy. 

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threat of bankruptcy]. Actual problems of economy, no. 10(112), pp. 182–187.
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Chernish, S. S. (2012). Problemy zastosuvannia metodyk analizu finansovoho stanu na vitchyznianykh 
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