Početna » FINIZ 2020 - People in the focus of process automation » Papers from the Thematic Areas of the Conference
DOES PROFITABILITY REFLECT COMPANY’S FINANCIAL HEALTH IN THE REPUBLIC OF SERBIA?
Keywords:
financial health, quantitative models, ratio analysis, creditworthiness, Republic of Serbia
Abstract:
By using quantitative models, it is possible to take insight into real financial strength and creditworthiness of companies. The aim of this paper is to determine if relationship between profitability and financial “health” of companies could be explained through implementation of Kralicek’s DF model. The main research question in the paper is defined as follows: are the best performances according to Kralicek’s test based on adequate and sustainable proportion of accompanied financial ratios? Authors concluded that the company “HIP Petrohemija” was the best performer among analyzed sample and consequently that company was the subject of comprehensive analysis, using well-known quantitative models such as: Beneish M-score and Altman Z-score. At the end of in-depth analysis, authors unexpectedly identified that profitability of the company “HIP Petrohemija” is direct consequence of government’s intervention and conversion of company’s debt into the equity. Nevertheless, this conclusion does not diminish the role and value of applied quantitative models in the process of financial health evaluation.
CITATION:
IEEE format
V. Mirković, M. Vujičić, D. Andonović Brmalj, “Does Profitability Reflect Company’S Financial Health In The Republic Of Serbia?,” in FINIZ 2020 - People in the focus of process automation, Belgrade, Singidunum University, Serbia, 2020, pp. 103-111. doi: 10.15308/finiz-2020-103-111
APA format
Mirković, V., Vujičić, M., Andonović Brmalj, D. (2020). Does Profitability Reflect Company’S Financial Health In The Republic Of Serbia?. Paper presented at FINIZ 2020 - People in the focus of process automation. doi:10.15308/finiz-2020-103-111
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