Importance Financial analysis of insolvent companies requires special methodological approaches that would take into account the specifics of bankruptcy legislation and the debtor's unfavorable position. Russia has the mandatory Rules that govern the analysis of business entities in receivership. The Rules emphasize the significant role of analyzing financial statements. The relevant methods are not free from weaknesses. They almost ignore analytical capabilities of tax reporting, thus determining the main subject of the research. Objectives The objective of the research is to substantiate recommendations on improvement of methodological approaches to analyzing insolvent businesses on the basis of their financial statements and tax returns. Methods The article reviews the specificity of analyzing the debtor in compliance with the effective Rules and relevant clauses of the Draft Federal Standard on Analysis of the debtor's financial position and results of its financial, operating and investments activities as part of bankruptcy procedures. The methodology of the research relies upon the theory of corporate financial analysis. The recommendations are substantiated with regard to scope of financial statements and tax returns. Results The research identifies the main issues and limitations relating to the application of the existing methodological recommendations. It also finds key areas for revising and supplementing them. In particular, we suggest setting up a system of financial coefficients that would arrange for applying forecast models of corporate financial standing. We present what results can be achieved through analysis of tax returns. Conclusions and Relevance Analysis of financial reporting is reasonable to perform concurrently with analysis of tax returns since it is important to evaluate the debtor's financial position. However, purposes, methods and procedures of the analysis should strictly correlate with information scope of those sources. Methodological requirements should not be too stringent. It is difficult to reach such balance. However, it is important to ensure the quality and efficiency of receivership.