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Forecasting Business Stability Based on Scenario Approach and Logit-Modeling of Financial Potential

Finance: Theory and Practice | 2026

Paper Details

Authors: Frolova A.S.; Kazakova N.A.

DOI: 10.26794/2587-5671-2026-30-3-50-63

Journal: Finance: Theory and Practice

Year: 2026

Publisher: Financial University under The Government of Russian Federation

Document Type: Article

Open Access: All Open Access; Gold Open Access

Cited by: 0

Abstract

The relevance of the study stems from the need to improve the accuracy of business sustainability forecasting in a highly turbulent economy. In this regard, the purpose of the research was to create a forecast for business sustainability using an example from the non-ferrous metallurgy industry using an advanced approach with a logit analysis of its financial prospects as a means of assessing key risks, and creating scenarios that could increase the accuracy of forecast estimates. The research methodology included principles, factors, indicators, models of sustainable development, empirical analysis and a risk-factor approach. The selection of factors and indicators for the model characterizing the multidimensionality in financial potential is based on an industry risk analysis, which includes the results of a study of the uncertainty of the business environment. Additionally, correlation analysis and assessment of the statistical significance of various factors were conducted. To build the model, data from 2014 to 2023 was downloaded from the SPARK information system, as well as public industry data. The constructed logit model allows us to assess the probability of the realization of key sustainability risks. The proposed assessment scale allows us to interpret the results as a basis for forecasting of the financial potential of non-ferrous metallurgy companies. The scientific novelty lies in improving the algorithm for forecasting business sustainability. This includes identifying risk factors, selecting indicators based on industry analysis, and developing logit models for financial potential. It also involves developing scenarios, that increase the reliability of forecasts of company sustainability over the short and medium terms. The practical value of the results lies in their potential use in research and development projects, as well as assessing and developing industry strategies at the Ministry of Industry and Trade, and by industry professional, investing funds for industrial development, and in generating reports on the sustainable development of socially and economically important enterprises. © Frolova A.S., Kazakova N.A., 2026.

Keywords

financial potential; logit model; non-ferrous metallurgy; regression analysis; risk factor approach; scenario approach; strategy; sustainable development