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Evaluation of financial health of companies through data envelopment analysis: Selection of variables for the DEA model in R

Author

Listed:
  • Emil Exenberger

    (Technical University of Ko?ice)

  • Michaela Kav?áková

    (Technical University of Ko?ice)

Abstract

Existing companies need to continually adapt to changing market conditions. The market situation may change, say, from day to day, as in 2008, when the Great Depression broke out, or as is currently the case during the COVID-19 pandemic. For this reason, companies need to monitor their financial health and be able to cope with such unpredictable situations. The aim of this paper is to provide a detailed guide to selecting appropriate financial indicators for the Data Envelopment Analysis model that can be used to evaluate the financial health of companies. Specifically, we use the Mann-Whitney test for indicators of IT companies in Slovakia during 2012-2017. The result is a process of selecting variables to evaluate the financial health of companies through the DEA model, applicable to both business practice and academia.

Suggested Citation

  • Emil Exenberger & Michaela Kav?áková, 2020. "Evaluation of financial health of companies through data envelopment analysis: Selection of variables for the DEA model in R," Proceedings of Economics and Finance Conferences 10913067, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:iefpro:10913067
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    References listed on IDEAS

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    More about this item

    Keywords

    Data Envelopment Analysis; Mann-Whitney test; financial health; multicolinearity; financial indicators;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C88 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Other Computer Software
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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