Financial stability in central european countries: case of the Visegrad four

Petr Suler¹, Veronika Machova²*

¹Mgr. Petr Suler, PhD., Institute of Technology and Business in Ceske Budejovice, Okruzni 517/10, 37001 Ceske Budejovice, Czech Republic, petr.suler@cez.cz

²Ing. Veronika Machova, MBA, Institute of Technology and Business in Ceske Budejovice, Okruzni 517/10, 37001 Ceske Budejovice, Czech Republic, machova@mail.vstecb.cz

*Corresponding author

Abstract

A crisis may arise in any business, so it is essential to focus on any problems in order not to endanger the company viability or to be out of business activity. Extinction has an impact on the economy of a country and can cause social and human problems to grow. As part of this research paper, we decided to analyse the Visegrad Four (V4) countries. The aim is to verify the results of selected methods on a chosen sample of enterprises from each country. After applying the methods chosen to enterprises, we compare the results of prediction chosen methods over the past three years and verify their predictive ability. The first part of this paper defines the most important approaches of various authors dealing with a similar issue while pointing out the importance and place of financial analysis in the management process and explains the methods and indicators used. There are several models to estimate bankruptcy. On the other hand, the current situation in the business environment pulls attention to the fact that the application of ex-ante financial analysis predictive methods is a compassionate issue, considering a variety of internal and external factors. We decided to use primarily those designed and tested by authors from selected V4 countries, which is the next part of the research paper. We have defined the methodology and criteria for a sample of enterprises from which the database was subsequently created. The processed analyses of the individual economic indicators, through selected methods, show the financial situation of the company and its development over the monitored period. Findings of analyses were evaluated and subsequently interpreted.

Keywords: Financial analysis, Visegrad Four, insolvency, prediction.