Capital Maintenance Evolution using Outputs from Accounting System

Abstract

Decision making based on information provided by an enterprise accounting information system, is essential for sustainable development and enterprises growth. Besides widely used prediction models for an assessment of the financial distress, there is also a useful indicator of a capital maintenance evolution, that provides a deeper view to the enterprise growth or decline compared to traditional performance measures. The aim of the contribution is to develop a model for assessment of a capital maintenance evolution using available accounting outputs. Our constructed model and coefficient for a capital maintenance evolution CMEOPNN has been developed using the multi-layer (triple) artificial neural network with a feedforward signal transmission by a backpropagation method and an activation function is a sigmoid function. For construction our model we used 663 Slovak enterprises sample out of 5 most frequented industry sectors with a unified structure of the provided information in the financial statements for 2014-2017.

The Impact of Equity Information as An Important Factor in Assessing Business Performance

“…Altmanʹs Z-score uses, among other things, the book value of equity, while in the index IN05 we do not find a single variable that deals with equity. For this reason, it would be appropriate to replace one of the variables in index IN05, for example the variable y2 having the least weight, representing the ratio of profit before tax and interest, and to replace interest expenses with a variable showing changes in equity items due to distribution of profit or arrangement of loss of the previous accounting period [37], which will be the subject of further research. At the same time, the subject of the research will be a detailed analysis of the items needed to calculate the variables in both models as well as detailed equity items and their impact on business performance.…”

“…Conversely, external users, such as shareholders and various creditors, are used for decision-making only by published documents, including financial statements and annual reports. Managers and owners focus their attention on the business performance measured mainly by profit or distributed dividends [37]. In the case of a profit distribution, a situation may arise where the resources left in the business are not sufficient in the long run to cover the renewal of necessary fixed assets or purchase of inputs, which may cause that the business will not be able to maintain its main or productive capacity in the short term and will face bankruptcy in the future [38,39].…”

“…The penultimate variable y4 represents the ratio of total income to total assets and expresses how many units of income one unit of assets makes up. The turnover of assets depends mainly on the sector in which the business operates, for example, if we compare the industries and sectors in which services predominate, in the case of the industry businesses with a large asset base have, as a result services where it is not necessary to dispose of a high proportion of assets [37]. Although the examined businesses operate in various sectors, in the monitored periods the indicator of the ratio of total revenues and total assets acquired positive values.…”

Factors Influencing Investments into Human Resources to Support Company Performance

“…To be able to solve this problem it is necessary to invest in innovations and HR during the whole process of equipment investment. As a valuable method for strategic analysis and planning, it could be seen as being balanced scorecard or costing-based on adequate accounting or CSR information (Kolumber and Briš 2014;MacGregor Pelikánová 2019;Pakšiová and Oriskóová 2020;Kolumber and Tkačíková 2020).…”

CSR Unconscious Consumption by Generation Z in the COVID-19 Era—Responsible Heretics Not Paying CSR Bonus?

“…Consequently, during the COVID-19 pandemic and immediately after it, the question is not about the quantity (presence), but about the quality (content) of the well communicated CSR as the reply of businesses to the increased of the social sensitiveness to about ethical (Sroka and Szántó 2018), social (Mallin 2018) and environmental (Krause 2015) issues (Pakšiová 2017). Therefore, effective, efficient, legitimate and properly oriented and reported CSR is an expense which could (and should) be compensated for by a myriad of positive effects, such as advertising and brand image improvement (Han et al 2010), fixation of stable revenues from loyal clients, increase of employee productivity (Ikram et al 2019), risk reduction (Sharfman and Fernando 2008) and diminishment of capital costs (Galbreath 2013;Pakšiová and Oriskóová 2020). Therefore, a good CSR has five features, i.e., these five are conditio sine qua non for a proper CSR: (i) being good i.e., effective, (ii) well materialized (efficient), (iii) conform to state and stakeholders' preferences (legitimacy), (iv) moving towards targets (oriented) and (v) disseminated (reported).…”