Profit Management as an Instrument for SMEs Developing: the Case for Slovakia

Research background: Deteriorating economic conditions and the risk of an impending crisis underline the need for significant profit optimization, especially in the area of taxation. Purpose of the article: The aim of this paper is to analyse and evaluate the conditions for the creation of a tax shield in the V4 countries on a theoretical level and to confront these findings with the value of the total tax shield in the countries in question. Methods: This study uses the method of two-way analysis of variance with interaction, while also testing the assumptions of the model by normality tests, homogeneity test and post hoc tests (Scheffé and Tukey methods). Findings & Value added: A review of the sources of the tax shield shows that the tax systems in all the countries examined offer similar conditions for the application of tax shields. In a sample of more than 90000 companies, it was found that the level of the total tax shield given as the effective tax rate is similar in all countries examined (except Hungary). The branch of affiliation plays a role only in the environment of Hungarian companies, on the contrary, Slovak companies show homogeneity of the reported effective tax rate. Country and industry affiliation does not have sufficient explanatory power to predict the total tax shield. Conversely, other indicators of financial performance (operating profit) may be suitable indicators of the effective tax rate.

Section: Resultsmentioning

confidence: 99%

Impact of Tax Effects on Profit Optimisation. Review of International Approaches

Lyeonov

Michalkova

2021

“…Abnormal income expresses a profit which, after deducting the cost of equity, is positive. This positive result is no longer the normal profit produced by the company, but it is the so-called abnormal income of business owners [14].…”

Section: Methodsmentioning

confidence: 99%

The usage of economic profit and other forms of profit as a part of prediction models to forecast the financial stability of business entities in the context of globalization

Karpac

Sedláková

2021

Research background: Predicting financial health of a company is in this global world necessary for each business entity, especially for the international ones, as it´s very important to know financial stability. Forecasting business failure is a worldwide known term, in a global notion, and there is a lot of prediction models constructed to compute financial health of a company and, by that, state whether a company inclines to financial boom or bankruptcy. In the current global world of uncertainty and continuous change, it is in each business’s interest to improve its performance. Businesses have to adapt to changing market conditions and keep moving to maintain their, either local or global, market position. In the past, entities preferred to increase primary accounting profit forms. The global modern goal of enterprises, value creation, is achieved through the concept of economic profit. Purpose of the article: The aim of this article was to find out the connection between two very important terms for the global economy, namely prediction models and economic profit. Methods: We focused on the research of both areas and looked for a common connection through how often different forms of profit, and especially the form of economic profit, are used in individual prediction models among the examined sample. Findings & Value added: The output of the whole article is the finding the division of the use of economic and accounting profit in the sample of models and the importance of economic profit for mathematical constructions of prediction models.

“…He was unaware of any previous writings on goodwill valuation. [7,8] The earlier writings on goodwill had concentrated on legal aspects, particularly the protection of attendant property rigts. If anyone had considered the effect of different factors on price and how goodwill might be valued in the absence of the direct evidence of a market transaction, his poinion seems to have remained unpublished.…”

Section: Literature Reviewmentioning

confidence: 99%

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

Podhorská

2021

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.