Application of selected financial performance methods to chosen industry in the Czech Republic
Application of selected financial performance methods to chosen industry in the Czech Republic

Author(s): Dana Dluhošová, Barbora Ptáčková, Dagmar Richtarová
Subject(s): Business Economy / Management, Economic history, Transformation Period (1990 - 2010), Present Times (2010 - today), Accounting - Business Administration
Published by: Masarykova univerzita nakladatelství
Keywords: financial performance; financial ratios; analysis of deviations; pyramidal decomposition; economic value added;
Summary/Abstract: This paper is dedicated to financial performance evaluation of selected industry of the Czech Republic. Financial performance of the industry or company is a random process, which can be decomposed into the particular indicators. Very important is to find and to quantify main factors which influence financial performance of the industry the most. One of the possible ways is to apply the method of pyramidal decomposition to financial indicators. The aim of this paper is to evaluate financial performance of selected industry in the Czech Republic in the period 2007 to 2015 according to the methods of analysis of deviation and to find main value drivers of this selected industry. Annual data from the period 2007 to 2015 will be used for the analysis. The data for the analysis will be taken from the web site of Ministry of industry and trade of the Czech Republic. Firstly, financial ratios will be determined. Secondly, the method of pyramidal decomposition will be applied to selected financial indicators, such as profitability ratios, liquidity ratios and activity and debt ratios. Analysis of deviation will be then applied to particular financial ratios and dynamic analysis of selected industry financial performance will be performed. Evaluation of selected industry in the Czech Republic according to economic value added indicator will be included in the conclusion of the paper and also value drivers of this industry will be determined in the analyzed period.

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