European Financial and Accounting Journal, 2016 (vol. 11), issue 3
Articles
Relationship between Liquidity and Profitability: Empirical Study from the Czech Republic
Jan Svitlík, Lukáš Poutník
European Financial and Accounting Journal 2016, 11(3):7-24 | DOI: 10.18267/j.efaj.159 
The paper deals with relationship between liquidity and profitability ratios in the Czech Republic to investigate whether there exists correlation (a) within selected liquidity ratios and (b) selected liquidity ratios and selected profitability ratio in the Czech Republic during the period 2003-2013. Empirical data from Bureau van Dijk, Amadeus database were analysed from the point of both time-series and cross-sectional analysis. The main findings of the paper are that correlation within selected liquidity ratios is fairly strong while correlation between selected liquidity ratios and selected profitability ratio is relatively weak.
Does High Growth Create Value for Shareholders? Evidence from S&P500 Firms
Levent Ataünal, Ali Osman Gürbüz, Asli Aybars
European Financial and Accounting Journal 2016, 11(3):25-38 | DOI: 10.18267/j.efaj.160
This paper investigates the relationship between growth rate and shareholder value creation, using a sample of 243 non-financial Standard and Poor's 500 (S&P500) companies, which have 22 years of consecutive data available (1993-2014). Sustainable Growth Rate Model (SGR) is used to divide the sample into two groups as high growth firms and moderate growth firms. Using Panel data approach, it is shown that sales growth below sustainable growth rate (SGR) enhance shareholder value at a significantly higher rate compared to growth above sustainable growth rate. The findings suggest that shareholder value creation maximizes around sustainable growth...
Empirical Safety Thresholds for Liquidity and Indebtedness Ratios on the Polish Capital Market
Jacek Welc
European Financial and Accounting Journal 2016, 11(3):39-52 | DOI: 10.18267/j.efaj.161
One of the elements of company's evaluation is ratio analysis. It includes computation of bankruptcy risk metrics. There are multiple such measures, of which two seem to be quite universal and commonly applied. These are current ratio and indebtedness ratio. In this study, the accuracy of bankruptcy predictions based on these two ratios is evaluated within a sample of data from the Polish market. Also, the safety thresholds (meant as values at which the probability of bankruptcy exceeds fifty percent) are estimated. The study is based on a sample of 84 companies, in which case a bankruptcy filing was announced in a period between the beginning of 2009...
Construction Industry and Payment Discipline in the Czech Republic
Lucie Kureková, Pavlína Hejduková
European Financial and Accounting Journal 2016, 11(3):53-68 | DOI: 10.18267/j.efaj.162
The paper deals with payment discipline in the building industry in the Czech Republic. The aim of this paper is to identify, compare and evaluate the financial situation of building companies with different payment practices in the Czech Republic in the period 2010 - 2014. The paper uses enterprise and statistical methods. The payment discipline of companies is expressed by a payment index, which is constructed by Bisnode. The results are based on analysis of 1374 companies which are operated in the building industry. The analysis shows that payment habits increase with higher index IN05, Taffler's model, index IN99 and with larger size of the firms....
Do Czech Companies Disclose Revenue in Accordance with IFRS Requirements?
Kateřina Knorová
European Financial and Accounting Journal 2016, 11(3):69-84 | DOI: 10.18267/j.efaj.163
Revenue is one of the key indicators informing users of financial statements about company's performance. The different approaches to revenue recognition are analysed in the first part of this paper. The second part addresses the convergence of US GAAP and IFRS in the area of revenue recognition and examines the new converged revenue standard IFRS 15. The third part focuses on the IFRS disclosure requirements set by the current standard IAS 18 and compare to the new ones defined by IFRS 15. The empirical study analyses consolidated financial statements of Czech listed companies and assesses the compliance with current revenue disclosure IFRS requirements.
Disclosure of Joint Ventures and Associates in Financial Statement under IFRS
Petra Ašenbrenerová
European Financial and Accounting Journal 2016, 11(3):85-94 | DOI: 10.18267/j.efaj.164
This article deals with disclosure of associates and joint venture in financial statement. In May 2011 the IASB issued new standard IFRS 12 Disclosure of interest in other entities. This standard, compared with IAS 28 and IAS 31, requires to disclose more detail information about joint ventures and associates. The reason is elimination of proportionate consolidation for joint ventures and also users of financial statements requested improvements to the disclosure of a reporting entity's interests in other entities. The introductory section discusses the equity method and proportionate consolidation, which is followed by a chapter dealing with the disclosure...
Application of Malmquist Indices in Valuation Process of Adult Day Surgery System in Slovakia
Beata Gavurova, Samuel Korony
European Financial and Accounting Journal 2016, 11(3):95-105 | DOI: 10.18267/j.efaj.165
In developed countries, day surgery has been used as a significant tool of efficiency increase in the health care system over the last few decades. However, its development is not sufficient in the Slovak conditions in spite of the support of the Ministry of Health of the Slovak Republic. Its use in the unstable conditions of the Slovak health system represents the main reason. The paper presents a partial output of the research that focuses on day surgery development in order to increase an efficiency of the health system in Slovakia. Its primary aim is to highlight a significance of Malmquist indices' application in evaluation of day surgery processes...
Local Revenue Mobilization in Romania
Octavian Moldovan
European Financial and Accounting Journal 2016, 11(3):107-124 | DOI: 10.18267/j.efaj.166
As public institutions are faced with more diverse and increased community needs, significant concern arises (both in academia and practice) for the dwindling resources available at the local level and the factors which can influence local revenue mobilization. Using data for 3,227 Romanian territorial-administrative (all Romanian territorial administrative units except Bucharest - the capital city), this research compares local revenue mobilization (calculated as: effectively collected revenues, as a share of what was predicted at the beginning of the budgetary year) for the 2008 - 2011 period, trying to determine if the type of a territorial administrative...
Structural Distress Index: Structural Break Analysis of the Czech and Polish Stock Markets
Michael Princ
European Financial and Accounting Journal 2016, 11(3):125-137 | DOI: 10.18267/j.efaj.167
The estimation of multiple structural break models is usually associated with identification of spurious break points, which are identified by universal algorithms. This leads to overvaluation of structural distress in financial markets represented by data series. The paper is focused on an estimation of the new index, which incorporates results of Student, Bartlett, GLR, Mann-Whitney, Mood, Lepage, Kolmogorov-Smirnov and finally Cramer-von-Mises tests statistics together. The new measure is named Structural Distress Index and evaluates a probability of structural break occurrence based on estimations of proposed models. SDI values show that Czech...
The Czech Crown Money Market as the Source for Pricing Customer Cash Products
Dušan Staniek
European Financial and Accounting Journal 2016, 11(3):139-154 | DOI: 10.18267/j.efaj.168
The paper examines the Czech crown money market in terms of products and volumes traded. The interest rate time series for the last 10 years are surveyed, and a parsimonious model is used to investigate to what extent the marketplace serves as the starting point for pricing customer cash products. Although satisfactory long-term relationships are observed, market disruptions are breaking up the assumed coherence. Special attention has to be paid to the decoupling of official fixing rates (PRIBOR) and real market rates in the current low interest rate environment.
Commercial Insurance as a Tool of Consumer Protection in the Czech Republic
Eva Ducháčková
European Financial and Accounting Journal 2016, 11(3):155-168 | DOI: 10.18267/j.efaj.169
Guarantee insurance is used by the state to solve some questions of consumer protection. To be specific it is insurance of tour operators against bankruptcy and insurance of employment agencies against bankruptcy. In both cases the insurance covers business risks of businesses and legal entities and that is the reason why the use of guarantee insurance in this context brings about several problems. On the one hand there are theoretical problems which deal with interpretation and explanation of the nature and principles of insurance and their application to insurance products and also problems concerning risk assessment of these products. On the other...
Short-term Fiscal Sustainability of V4 Countries
Marianna Sávai
European Financial and Accounting Journal 2016, 11(3):169-182 | DOI: 10.18267/j.efaj.170
The financial crisis placed budget and fiscal policy sustainability on the centre stage of researches. Recently, a number of studies have suggested that the researcher should take use of the simplest models, because they provide accurate forecasting results. This present study falls in line with this new research direction, follows a simple intertemporal budget constraint, calculates primary gap in some selected years (2004, 2009, 2014) and tests assumptions for short-term in Visegrad Group Countries. Results indicate that the fiscal stance of V4 countries was varied. In most of the examined years, the fiscal policy of the countries have seemed to...