G33 - Bankruptcy; LiquidationReturn

The aim of this paper is to critically evaluate the terms that are described by various authors in Czech literature, compare those terms with the terms used by the original Altman model, use data from selected enterprises to show whether enterprises could be considered at risk of bankruptcy due to such inaccuracies and verify whether the average Z-score values for small enterprises within the Zlín Region are greater than 3. The data were analysed using a one-sample t-test and the Altman model for enterprises that are not publicly-traded. Financial statements for 2007 through 2011 were used in the data analysis.
The one-sample t-test showed that the sample of 32 small enterprises from the Zlín Region had good financial health. The largest percentage change that was associated with a decline in performance was demonstrated when adding net profit to retained earnings (-16.64%). The largest percentage change that was associated with an improvement in performance was demonstrated when using current assets instead of working capital (33.07%). Replacing retained earnings with net profit reduced the enterprise's performance (a percentage change of -24.43%). Adding funds from profit and net profit to retained earnings reduced performance by 0.17 percentage points.
We recommend using net working capital to calculate the X1 ratio. Retained earnings should be used to calculate the X2 ratio. Only sales should be used to calculate the X5 ratio. For manufacturing enterprises that are not publicly-traded, we recommend using equation (8). Publicly-traded enterprises may use equation (2). Enterprises that provide services and enterprises in emerging markets may use equation (4).

Effective Corporate Governance is seen as a key factor in achieving economic performance. This article aims to define key performance indicators (KPIs) of Corporate Governance (CG). Defined indicators in a clear, understandable and measurable way reflect the performance of CG. To meet the objectives of the article, a literature search was performed. Approaches of international organizations (IFAC, DVFA, EABIS and UNCTAD) to measure the performance of CG were analysed. In addition, a questionnaire survey was carried out. The purpose of the questionnaire survey was to describe the current situation and approach of companies to the issue of CG. Based on a synthesis of the knowledge 14 KPIs divided into six areas are proposed: Strategy; Effectiveness of CG; Corruption & anti-competitive behaviour; Involvement in politics & payments to public officials and institutions; Relations with stakeholders; and Compliance.

The paper deals with the evolution of the retail sales in the Czech Republic and the European Union. Retail sales are a very important element of the total performance of a national economy. The aim of this article is to analyze the tendency of the retail sales and to compare their evolution in the Czech Republic with the results of the whole European Union. The paper presents graphical analysis studying relations between the retail sales and the macroeconomic development (GDP growth rate and unemployment rate) as well as the expectations of the households. As concerns the factors of the retail sales evolution, there is some positive correlation with the evolution of the general economic performance. However, there is no provable relation between the growth or decrease of the retail sales and the unemployment in both the EU and the Czech Republic.

Constructing models for predicting financial distress of small and medium enterprises requires its own treatment, because these firms differ from large campanies. The aim of this paper is to quantify the predictive power of selected ratios and to develop a statistical model for financial distress. We tested 16 financial ratios and the study relies on observations from 1563 firms. The model obtained by a methodology of conditional logit analysis includes quick liquidity ratio, average receivables collection period, leverage, solvency and interest coverage or debt coverage from current cash flow. The result confirmed that financial distress is closely related with the ability of a firm to pay its debts. Rentability wasn't found as so decive predictor in short period, there is a more complicated relation between rentability and payment capacity. As significant predictor was identified current cash flow (adjusted ordinary profit), which is much closely connected with cash.