Remaining Financially Healthy and Competitive: The Role of Financial Predictors
Tomas Kliestik, Katarina Valaskova, George Lazaroiu, Maria Kovacova, Jaromir Vrbka
Klíčová slova
competitiveness, bankruptcy prediction, financial distress, financial ratio, Eastern European countries
Abstrakt:
Financial ratios play an important role in revealing corporate financial soundness, a role which
helps to maintain the competitive position of an enterprise, with the achievement of stable development
contributing to the elimination of potential financial risks. This paper aims to analyse
and compare financial ratios used in the models of transition countries. The analysis focuses
on the prediction of the future financial development of a particular enterprise as well as the
determination of potential dependencies among the nation in consideration of financial ratios
and country of origin. More than 400 prediction models of the Slovak Republic, the Czech
Republic, Poland, Hungary, Romania, Lithuania, Latvia, Estonia, Croatia, Russia, Ukraine and
Belarus were analysed. The crucial significance of financial ratios in divergent conditions is
revealed using a cluster analysis, categorical data and a correspondence analysis. The cluster
analysis identified similarities among three groups of countries: i) Belarus, Estonia, Croatia and
Latvia; ii) Lithuania, Russia, Hungary and Ukraine, and iii) Czech Republic, Slovakia, Romania
and Poland. The results of the correspondence analysis indicate that the individual groups of
countries prefer different financial ratios in developing models of prediction of financial distress,
differences which arose as a consequence of common changing political, market and economic
conditions within each group of nations. In contrary to results suggested by our findings, the
most frequently used financial ratios in the prediction models throughout the countries remain
current ratio, total-liabilities-to-total-assets ratio, and total-sales-to-total-assets ratio.
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 Remaining Financially Healthy and Competitive: The Role of Financial Predictors [PDF soubor] [Velikost souboru: 657.78 KB]
 10.7441/joc.2020.01.05
Kliestik, T., Valaskova, K., Lazaroiu, G., Kovacova, M., & Vrbka, J. (2020). Remaining Financially
Healthy and Competitive: The Role of Financial Predictors. Journal of Competitiveness, 12(1), 74–92. https://doi.org/10.7441/joc.2020.01.05
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