Abstract:The paper deals with relationship between liquidity and profitability ratios in the Czech Republic to investigate whether there exists correlation (a) within selected liquidity ratios and (b) selected liquidity ratios and selected profitability ratio in the Czech Republic during the period 2003-2013. Empirical data from Bureau van Dijk, Amadeus database were analysed from the point of both time-series and cross-sectional analysis. The main findings of the paper are that correlation within selected liquidity ratios is fairly strong while correlation between selected liquidity ratios and selected profitability ratio is relatively weak.

Abstract:The paper investigates the effective corporate tax rate (ETR) in the Czech Republic from 2003 to 2013 from the point of both time-series and cross-sectional analysis. We exploit the access to Bureau van Dijk, Amadeus database to get broad data sample from financial statements. Thus, micro backward-looking approach was applied in the paper. We find clear downward trend in the ETR during the given period and statistically significant correlation between the ETR and statutory corporate tax rate (STR). We also undertake analysis of geographical regions using ZIP codes of the companies and analysis of economic sectors according to NACE of the sample firms. Main finding of the cross-sectional analysis is the highest ETR in the region of Prague (capital).

The paper deals with the phenomenon of earnings discontinuity around zero level in the UK, as the common law representative, Germany, as the civil law representative, and the Czech Republic, as the civil law representative where earnings management research has not yet been thoroughly realized. We undertake both cross-sectional and time-series analysis from 2006 to 2013. According to our findings, the UK is a low-earnings-management country with slightly decreasing trend of the earnings management level. On the other hand, earnings management engagement in Germany and the Czech Republic is of a significantly higher level than in the UK. Moreover, Czech companies suggest an increasing trend of the earnings management level. We find significant difference between the common law representative and the civil law ones in terms of the earnings management level.