Proceedings

each of the three variables: 1 – low index (-∞; m-σ/2); 2- medium index [m-σ/2;
m+σ/2) and 3- high index [m-σ/2; +∞).
Figure 2. The profile of the risk of insolvency according to the three evaluation
methods
According to the diagram in Figure 2, we can see that for the period 2008-2009, the
association between the characteristic indexes of the three evaluation methods
significantly differs in what concerns the state of the company, by representing the
variables categories in the system of two factorial axes, characterized by the
dimensions: Dimension 1 and Dimension 2. The two dimensions are obtained based
on a linear combination of the analyzed variables (frequency of occurrence will be
considered in each variable category). Cumulative, dimensions explain at least 50% of
the degree of association between the analyzed variables. Therefore, for the analyzed
sample, we can notice that bankrupt companies have a low variation index of the EV
and MC value, but record a high variation index of VFCF. Unlike them, solvable
companies have a medium and respectively high index indice of the EV value and a
medium variation index for the values computed using the MC and VFCF methods.
We can see thus that in the case of insolvent companies there is a reverse correlation
between their values obtained based on free cash flows and patrimony and
comparative methods (corrected stock exchange capital). From an optimistic
perspective, the value of the company, obtained by discounting the future cash flows,
is not supported by the current economic reality, but the value of the entity can be
correctly evaluated through patrimony methods and by the correct stock echange
capitalization.
We can conclude that in crisis conditions the EV as well as the MC faithfully indicate
the state of a company at a certain moment, in comparison with the VFCF-based
evaluation, which provides a distorted (overestimated) image of the position and
financial performance of the company. Insolvent companies will attempt to improve
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