Importance The article addresses the bankruptcy problem in the agricultural sector and analyzes relevant effective laws to reveal the flaws in the currently applied methodology to assess the financial condition of agricultural goods producers. Objectives The purpose of the research is to formulate proposals to improve Russian laws in the sphere of agricultural goods producers' bankruptcy prediction. Methods The research rests on the CART (Classification and Regression Tree) methodology whereby we specify financial ratios that are applied to evaluate agricultural companies. To estimate financial thresholds, we analyze the sampling consisting of 580 companies, including 273 bankrupts. Results To enhance the Russian laws, we revised financial ratios enabling to determine bankrupt companies, offered a better classification of companies based on their financial ratios, considering the industry-specific features of agricultural producers. We included a new indicator with a high level of predictive capability into the existing methodology, and recommended to exclude the ratio of working capital to inventories as it has low forecasting power. Conclusions and Relevance If implemented, the offered changes to the methodology will increase the efficiency of bankruptcy forecasting for agricultural goods producers and help take timely measures to prevent failures.
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