Estimating financial stability at the entity level is an integral part of economic and financial analysis, helping investors and creditors assess the performance and risks of any enterprise. Adapting to national conditions, the appropriate use of financial predictors, and statistical methods allow for the acquisition of relevant results and the most accurate forecasting of a company’s future development. The aim of this paper is to develop, describe, and test a model for predicting financial difficulties. The research methods used in this study include the analysis of scientific literature, the universal method of dialectics and its procedures, and mathematical methods. The results indicate that the use of the model allows for the identification of deteriorating financial conditions in manufacturing companies several years before insolvency is declared.
