Search

Research background: The corporate debt situation can be considered a crucial factor influencing the future development of the financial performance of the firm. It is essential for every business entity to know its financial health, its strengths and weaknesses, and how its business has been affected by the COVID-19 pandemic and all the changes it has brought. Purpose of the article: The main aim of this paper is to explain and quantify the consequences of the COVID-19 pandemic, analyze changes in the growth of crucial determinants, and identify new trends in Slovak enterprises throughout the monitored period of 2018-2021. Methods: Hence, a statistically significant difference between the individual indicators due to the period in which the firms achieved these values was determined using the Friedman test. It determined whether the average values of the financial indicators remained constant over the period under review (the years 2018 and 2019 are considered pre-COVID-19 years, while 2020 and 2021 are years when the globe was already being impacted by the outbreak of the COVID-19 pandemic) or whether the individual values of the indicators differed significantly. Findings & value added: Considering that there are statistically significant differences in the indicators of self-financing ratio, current indebtedness ratio, and equity leverage ratio in all monitored periods except for the years 2020 and 2021, where the average values of these debt indicators are the same, the results indicate that the COVID-19 pandemic also negatively impacted the indebtedness of Slovak enterprises. Although this research paper, focusing on the financial performance of the firms in the post-pandemic period, is pioneering in Slovakia, the biggest contribution of the study is the application of the latest information, which could help in more precise monitoring of corporate financial stability and debt policy during the current challenging period. The obtained results provide important universal guidelines for building financial strategies improving long-term financial resilience of enterprises. [ABSTRACT FROM AUTHOR]

We are enriching the debate on the indebtedness of self-governing regions with a scientific article that focuses on the effects of this phenomenum of the Czech Republic and the Slovak Republic as selected Central European countries. The main purpose of the article is to find out possible measures and solutions in the stabilisation of the financial security of self-governing regions in the surveyed countries. The research refers to the monitored period from the accession of both countries to the European Union in 2004 (data summarized in 2005) till 2022 when the final annual statistical data of the regional final accounts (referring to 2021) are available. Descriptive statistical method was used to express the development trends of indebtedness, represented by line graphs and tables. The data were aggregated for individual budget years in all self-governing regions, due to significant differences in the structure of fragmentation, the research results were interpreted through the indebtedness per inhabitant and the share of indebtedness to current income determined by the legal framework. Through the study of foreign and domestic scientific literature, possible preventive measures for reducing self-governing regions debt were proposed when using returnable funding sources after joining the European Union of these two countries. [ABSTRACT FROM AUTHOR]

Research background: Debt is considered a normal part of enterprises these days. If enterprises do not have enough equity, they will start to use a large amount of debt which is mainly associated with indebtedness. Rising indebtedness can be a difficult financial situation for business entities in the form of default and inability to meet their liabilities. Purpose: The main aim of this paper is to perform a debt analysis of enterprises operating in sectors that are considered leading in the conditions of Slovakia, such as the manufacturing and construction sector, and subsequently, to examine whether the size of the enterprise has a significant impact on selected indebtedness ratios. Research methodology: Firstly, the debt analysis was performed using the six selected indebtedness indicators on a sample of 846 enterprises. Secondly, a more detailed analysis, focused on examining the existence of statistically significant differences between individual indebtedness ratios concerning the size of the enterprise, was realized using the non-parametric Kruskal-Wallis test. At the end of the research, the Bonferroni corrections were used to identify where the stochastic dominance occurred. Results: The impact of the enterprise's size on the calculated indebtedness indicators is confirmed by the results of ANOVA, based on which it can be argued that statistically significant differences between the calculated indebtedness indicators exist between large and small enterprises, as well as an inequality of medians between large and medium-sized enterprises. As a result, the median values of the debt ratios of small and medium-sized enterprises are the same. Novelty: The contribution of this paper is a new feature of the application of debt analysis for the evaluation of corporate performance. There are only a few papers in Slovakia that focus in detail on an analysis of the indebtedness of individual enterprises and with an examination of the determinants that affect this indebtedness, which is, however, an added value of our contribution. [ABSTRACT FROM AUTHOR]

Lower interest rates and easier access to credit have elevated demand for debt over the last two decades. However, Slovak household indebtedness has increased most significantly among the European Union countries. Therefore, understanding the factors which drive Slovak households to the debt is crucial for policymakers, regulators, and financial institutions. The main goal was to analyse relevant socio-economic and demographic characteristics of indebted and non-indebted Slovak households. This analysis was based on microeconomic data collected through a survey on Household Financing and Consumption in 2017. Firstly, we performed a descriptive analysis which closer identified factors related to household indebtedness. Subsequently, a logistic regression model was tested based on univariate analysis. Then, we illustrated the significant average marginal effects of selected socio-economic and demographic factors on the probability of indebtedness of Slovak households graphically and numerically. After all, the results suggest that the likelihood of household participation in the credit market increases with increasing levels of wealth, while the level of household income does not have a statistically significant effect on debt distribution. Also, households with more members and households with two children are more likely to hold any debt. An opposite effect was observed in households where the reference person was economically inactive, achieved a higher level of education, or was older [ABSTRACT FROM AUTHOR]

Critical situations in the operations of companies, both evitable and inevitable, usually have a certain pattern and development trend but are different as to the duration, sector or region. Many of them ask for some legal procedure, the most critical ones lead to a bankruptcy process. The purpose of the research is the rapid increase in number of bankruptcies in Slovakia in recent years. The main aim of this paper is to analyse the evolution of the bankruptcy as a type of critical situation in Slovak companies and specify it according to the regional and sectoral perspective, including economic conditions prior to a bankruptcy. The paper utilizes secondary data obtained from available databases. The initial analysis is focused on the group of all companies entering the bankruptcy process in the period from 2009 until 2019. Firstly, the full sample is considered, regardless of the legal form and data and the outcome of the analysis is used for mapping of industrial and regional intensity of bankruptcies. The second stage of the research is focused on research sample after the irrelevant subjects were ousted from it. As irrelevant subjects we consider sole traders without business data and companies with doubtful data or unclear bankruptcy start. Through the available indicators are identified the early warning signals from the financial perspective. Indicators are split into two categories - absolute and relative ones and they are investigated three, two and one years before the start of bankruptcy. Four hypotheses were formulated before the research, the length of bankruptcy process was quantified and specified for SK NACE sectors and regions. The paper presents the results of empirical analysis, which showed that the dynamic change in number of bankruptcies was brought with significant amending of bankruptcy legislation. The longest bankruptcy process is found in accommodation and food services (4 years), while IT companies generally went bankrupt within a year. The economic situation in bankrupting companies significantly worsen in case of sales and equity (the number of companies with negative equity doubled), development of profit/loss fluctuate a bit due to the sale of assets which helped in later stages. There is no statistically significant difference in the length of bankruptcy among the industries and regions. In case of legislative rules the lower cash ratio seems to be the dominant reason while companies enter the bankruptcy. The research results can be useful for further and more detailed analysis, mostly in connection with bankruptcy development (what happen when bankruptcy started) and liabilities compensation and through non-financial bankruptcy factors in individual industries. [ABSTRACT FROM AUTHOR]

Indebtedness of public administration has become a key issue of the economic debates and discussions in recent years. Growing public debt negatively influences the economic development and causes serious troubles to every country and its inhabitants. In a paper we analyze and examine the influence of growing indebtedness on municipalities' decision to finance sport. For our purpose, we chose eight capital cities of the Slovak high territorial units. We analyzed the development of indebtedness and financial health indicators within period 2009-2012. From obtained data we examined how indebtedness influences the decision of selected municipalities to finance and provide sport activities and services. Methodology and methods for data analysis are described in Section 2. We stated hypothesis that indebtedness in selected municipalities causes decreased financing of sport activities. We found out that indebtedness development has direct connections, impacts, and correlation on decision of municipality representatives. Further conclusions and discussion are part of Section 4. Paper is elaborated within national scientific research project VEGA 1/1195/12 Strategic interactions of the Slovak local municipalities in determining the tax rates. [ABSTRACT FROM AUTHOR]