Measuring of Goodwill in Non-profit Organizations under the conditions of Globalization: The Case of Slovak Republic

Research background: Both the creation and quantification of goodwill are interdisciplinary issues affecting accounting, economics, law, marketing, sociology and human resources. In both economic theory and practice, goodwill is the difference between the market and the book value of an enterprise. Purpose of the article: With the acceleration of globalization, the economic aspects of which are the logical consequence of the increasing interdependence of individual economies towards the end of the second half of the 20th century, the importance of building and managing goodwill as a competitive advantage through business activities and internationally is increasing. These facts should be more highlighted and stronger in the sector of non-profit organizations. Because of their mission, vision and character of their business. The main aim of the paper is to capture the value of goodwill in the sector of non-profit organizations in the Slovak Republic. Methods: As a testing data will be used 72 non-profit organizations from Slovak Republic. In this sample will be quantified the value of their goodwill by residual income methods. Residual income assumes the value of goodwill as a difference between net income and the product of the cost of equity and the book value of equity. Findings & Value added: Paper findings will bring the view on the possibility of measuring goodwill in the sector of non-profit organizations under the conditions of globalizations with the emphasis on the application of residual income method in the case of Slovak Republic

Application of Economic Value Added under the Conditions of Globalization: Study of Real Estate Industry

Research background: The success and stability of any company depends mainly on its financial health. This research is focused on the application of economic value added as a methods for analysis of financial health of company. The EVA indicator characterizes the company’s ability, which is reduced by the price of equity. In other words, the capital invested in the company has a benefit that exceeds the cost of that capital. The goal of each owner is to achieve the maximum possible appreciation of this invested capital and thus ensure the appreciation of the company’s assets. Purpose of the article: The main aim of the paper is to assess the financial health of companies in the real estate industry by economic added value under the conditions of globalization. Methods: For research was used the data of Slovak enterprises from real estate industry, obtained from annual financial reports covering the year 2019. Based on these data economic value added were calculated. Especially, EVA equity methods was used. Cost of equity were quantified by capital assets pricing model. Subsequently, the results obtained were examined by descriptive statistics. Findings & Value added: The results of paper bring comprehensive analysis of financial health of Slovak companies from real estate industry by economic value added. Paper identified the value of economic value added in all companies from this industry, quantified both, the largest and the smallest values of economic value added in data. Subsequently, study applied descriptive analysis of results

Enterprises Financial Performance in a Globalized World

World globalization has a significant impact on the financial performance and financial health of enterprises. The aim of the paper is to analyse and compare the financial performance of selected enterprises under the conditions of globalization. Paper will work with six selected enterprises from the IT sector, which represents one of the fastest growing sectors in the globalized world. Each of them will be from the Slovak Republic. As input data will be used their financial statements during years 2015-2018. These data will be obtained from the Amadeus database - a database of comparable financial information for public and private companies across Europe. The methods of financial-economic analysis will be used to analyse these data. Especially, the paper will be work with selected financial ratios from analysing of liquidity, profitability, indebtedness, and activity. The theoretical part of the paper will contain a literature review and historical development of financial performance assessment and theoretical aspects of enterprise financial performance. The practical part will contain the application of selected methods of financial-economic analysis in the database of enterprises. Paper findings brings evaluation of financial performance of enterprises in IT sector under the conditions of globalized world

Earnings Indicators under the Condition of Globalization

The paper is focused on the analysis of the influence of partial indicators on the selected top indicator, which is the earnings. The profit is the resulting effect of the enterprise’s business activity and, at the same time, often the measure of whether the company is successful or not. Business performance data is one of the cornerstones for further corporate planning and decision making. It is necessary to point out the factors that influence the company’s result. The main purpose of the contribution is the pyramidal breakdown of the economic performance indicator to identify the main factors influencing its change over the two-year reference period. The pyramidal breakdown of the economic result is complemented by the breakdown of the ROE indicator

The Importance of Non-Profit Organization in Globalized World: International Comparison of American and European Continent

Research background: In developed countries, we see a significant increase in the importance of non-profit organizations thank to public initiative. The primary objective is to improve the quality of life in society. Cooperation between private, public and non-profit sectors creates synergy effects. The primary problems of non-profit organizations include legislation that does not sufficiently motivate entrepreneurs to support non-profit subjects, but also a shortage of employees and volunteer. Purpose of the article: Despite the fact that, under the conditions of globalization, there is a greater interconnection of the economies of individual countries, also in the area of non-profit sector, there is still exist important differences between the operation and importance of non-profit organization in an American and European continent. Methods: Firstly, theoretical part of the paper provides historical development of non-profit sector based on primary theoretical approaches. Secondly, practical part of the paper describes non-profit sector on American and European continent. In other words, the paper summarises theoretical and empirical knowledge on importance of non-profit sector in various countries around all the world. Paper main aim is the highlighted the importance of non-profit sector under the conditions of globalization with the emphasis on the international comparison of American and European point of view. Findings & Value added: The results show that non-profit sector plays significant role in building national economies. This paper is the one part of the project outputs focused on non-profit sector. In developed countries, we see a significant increase in the importance of non-profit organizations thank to public initiative

Searching for Key Factors in Enterprise Bankrupt Prediction: A Case Study in Slovak Republic

The issue of enterprise in bankrupt or financial health as a whole is still very actual topic not only in Slovakia but also in abroad. Works dealing with the enterprise in bankruptcy have already appeared in the 1930s of the 20th century. Bankrupt of enterprise affect all subject in relationship with this enterprise. Financial experts were looking for the ways for enterprise bankrupt prediction. This article is based on the searching for key factors that could indicate the enterprise in bankrupt in Slovak conditions. This article tries to work with financial variables from the area of financial health assessment of enterprise and works with the sample of Slovak enterprises. This sample includes 8,522 financial statements of enterprises in 2016. According to several relevant decisions rules, for example, the value of equity or equity debt ratio, enterprises are divided into two categories – bankrupt enterprises and creditworthy enterprises. Subsequently, this article tries to find statistically significant financial variables that could indicate involving enterprises in these two categories and works with several statistical methods for searching significant relationship between variables and the tightness of relations between them. As a main statistical method, Pearson´s correlation coefficient is used, which is supported by correlation matrices. In addition, it is necessary to test an existence of outliers in the sample of enterprises. Existence of outliers is tested by the Grubbs test of outliers

Prediction of Default of Small Companies in the Slovak Republic

From the time of Altman and the first bankruptcy prediction models, the prediction of default of companies is in the centre of interest of many economists and scientists all over the world. For companies, early detection of the possible threat of imminent financial difficulties or even bankruptcy is a very important part of financial analysis. Over the last few years, many predictive models have been created in the world. However, it has been shown that these models are not very well transferable to the conditions of the economy of another country and their prediction or rating power in another country is lower. Therefore, it is best to create a specific predictive model in the country that takes into account the situation of companies on the basis of real data on their financial situation. This paper is focused on creating a model of failure prediction of small companies in Slovakia using a well-known and widely used method of multivariate discriminant analysis. Discriminant analysis is one of the oldest multivariate statistical methods and sometimes it is difficult to fulfil certain assumptions for data. However, its results are easily interpretable and can be used to classify a company to the group of companies with risk of financial difficulties or, on the contrary, between well-prosperous companies. Prediction model is created based on real data on Slovak enterprises and has a strong classification ability in the specific conditions of the Slovak Republic

Analytic Hierarchy Process in Multiple–Criteria Decision–Making: A Model Example

Managers have to make decisions several times a day. The decision-making process can be defined as an essential activity realized by managers every day. Decisions can be implemented intuitively, or by using relevant decision-making methods. This depends on the nature of the decision, as well as the intensity of its possible future effects. The theory of decision-making can be defined as a relatively young discipline. It can be stated that decision-making is no longer an intuitive process. Most decision-making situations are of a multiple criteria character. In this contribution, the authors focus on multiple-criteria decision-making, to which several methods can be applied. In the practical part, the authors use Saaty's method, also known as the Analytic Hierarchy Process. Saaty is considered to be the most important researcher dealing with the issue of multiple-criteria decision-making. The set multiple-criteria decision-making problem was to choose one business partner out of eight under consideration. The decision-making criteria included selected financial indicators and non-financial criteria. The aim of the contribution is to use the Analytic Hierarchy Process to assess potential business partners and to select an optimal candidate

Analiza interno ustvarjenih kazalnikov dobrega imena: Študija primera Slovaške republike

Background and purpose: Knowing key indicators of goodwill value can contribute to its effective management and growth of the market value of the enterprise. The purpose of this research is to identify individual goodwill indicators. The paper aim is to obtain potential indicators of enterprise goodwill under the conditions of the Slovak Republic. Design/Methodology/Approach: Paper data included 11,483 financial statements of Slovak enterprises in 2017. The value of residual enterprise income represents the value of goodwill. Input data for the identification of goodwill indicators represented 15 financial-economic variables. Outliers in data were searched and removed through an interquartile range. Multicollinearity among input variables, by the coefficient of determination and variance inflation factor, was also analysed. A statistically significant correlation between goodwill and its potential indicator were tested by the significance test of the Pearson correlation coefficient and correlation matrixes. Results: Research results reveal the existence of a statistically significant correlation between goodwill and 8 input variables, which represent its potential vital indicators. Conclusion: Paper findings bring new possibilities for goodwill management, which may create an essential com­petitive advantage of a company. For the scientific community, the findings represent sources of potential goodwill indicators which can be used for the creation of the new model of goodwill valuation in future research. Keywords: Goodwill; Residual income; Key indicators; CorrelationOzadje in namen: Poznavanje ključnih kazalnikov vrednosti dobrega imena lahko prispeva k učinkovitemu upravlja­nju dobrega imena in rasti tržne vrednosti podjetja. Namen te raziskave je prepoznati posamezne kazalnike dobrega imena. Cilj prispevka je pridobiti potencialne kazalnike dobrega imena za podjetja pod pogoji Slovaške republike. Oblikovanje / metodologija / pristop: Podatki, ki smo jih analizirali v članku so vključevali 11.483 računovodskih izkazov slovaških podjetij iz leta 2017. Vrednost preostalega dohodka podjetja predstavlja vrednost dobrega ime­na. Vhodni podatki za identifikacijo kazalnikov dobrega imena so 15 finančno-ekonomskih spremenljivk. Analizirali smo tudi multikolinearnost med vhodnimi spremenljivkami s koeficientom določitve in faktorjem inflacije. Statistično pomembna korelacija med dobrim imenom in njegovim potencialnim kazalnikom je bila preizkušena s testom značil­nosti koeficienta Pearsonove korelacije in korelacijskih matrik. Rezultati: Obstaja statistično pomembna korelacija med dobrim imenom in 8 vhodnimi spremenljivkami, ki predsta­vljajo njegove potencialne vitalne kazalnike. Zaključki: Ugotovitve iz članka prinašajo nove možnosti za upravljanje dobrega imena in lahko bistveno pripomo­rejo bistveno h konkurenčni prednosti podjetja. Za znanstveno skupnost ugotovitve predstavljajo vire potencialnih kazalcev dobrega imena, ki jih je mogoče uporabiti za oblikovanje novega modela vrednotenja dobrega imena v prihodnjih raziskavah. Ključne besede: dobro ime; preostali dohodek; ključni kazalci; korelacija