An Evaluation of Financial Health in the Electrical Engineering Industry

Roberto Stefko, Sylvia Jencova, Petra Vasanicova, Eva Litavcova

An Evaluation of Financial Health in the Electrical Engineering Industry

Číslo: issue 4/2019
Periodikum: Journal of Competitiveness
DOI: 10.7441/joc.2019.04.10

Klíčová slova: competitiveness, bankruptcy model, creditworthy model, financial analysis, Slovak industry

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Anotace: One of the characteristics of business competitiveness is business performance. Managerial decision making is one of the main factors that can affect the competitiveness of a company. Financial and economic analysis is an inseparable part of financial management in the practice of business entities. The aim of this contribution is to present several models of forecasting the financial situation of companies. By implementing the Taffler model, Springate model, and the Aspect Global Rating, we assess the financial health of a set of non-financial corporations that, with their net turnover, represents almost the entire electrical engineering industry in Slovakia. As Slovakia has a poorly developed capital market and a numerous private companies do not have publicly traded securities, in this paper we use models based on information from financial statements, an approach which is preferable to the use of market-oriented models. Financial data of selected non-financial corporations needed for the financial analysis were obtained from the Register of Financial Statements of the Slovak Republic, with data for the entire industry obtained from the CRIBIS database and results highlighting the financial health of individual electrical engineering companies. Relevant information should be beneficial especially for suppliers in order to avoid disruptions in their own production as well as for stakeholders, managers and auditors. Among other things, it is possible to monitor which companies have the strongest financial health and which are losing their competitiveness, thus are threated. A creditworthy model confirmed that the sector appears to be financially healthy.