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Payment habits of engineering companies in the Czech Republic

Author

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  • Jindřich Špička

Abstract

The aim of the article is to identify, compare and evaluate financial position of companies with different payment habits in the Czech engineering industry in the period 2008 - 2012 using individual data and felicitous statistical methods (Kolmogorov-Smirnov test). The article focuses on evaluation of the default risk coming from engineering companies. Based on sample of 2012 engineering companies, the results show that payment habits increase with higher return on assets, higher liquidity, lower debt ratio and higher liability turnover. Payment habits of engineering companies are very good. However, about 6 % of solvent companies have poor payments habits. Such companies are risky for their suppliers with respect to the secondary insolvency phenomenon.

Suggested Citation

  • Jindřich Špička, 2014. "Payment habits of engineering companies in the Czech Republic," Ekonomika a Management, Prague University of Economics and Business, vol. 2014(2).
    • Handle: RePEc:prg:jnleam:v:2014:y:2014:i:2:id:228
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    References listed on IDEAS

    as
    1. Unknown, 2005. "Index of volume 49," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(4), pages 1-5.
    2. anonymous, 2005. "Index to Volume 51," Management Science, INFORMS, vol. 51(12), pages 1896-1902, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Payment habits; Engineering Industry; Secondary Insolvency; Platební morálka; Strojírenství; Druhotná platební neschopnost;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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