Analysis of Modern Methods for Increasing and Managing the Financial Prosperity of Businesses in the Context of Performance : a Case Study of the Tourism Sector in Slovakia

• Autorzy: Erika Onuferová , Veronika Čabinová , Tünde Dzurov Vargová
• Języki publikacji: EN

Abstrakty

EN

Research background: In the context of constantly changing business environment, the financial sector is focusing on new trends in financial management systems. Nowadays, there is a need to achieve long-term financial growth, so financial managers try to develop new models for managing and improving the financial performance of businesses in economic practice.
Purpose of the article: This article aims to determine the financial performance of travel agencies by applying modern business performance evaluation methods in order to create a performance portfolio (ranking) for the years 2013-2017, subsequently to reveal the concordance rate of order of the selected business entities by comparing applied financial methods in the context of performance benchmarking. The research question is as follows: Does the multidimensional PCA method in the form of the performance portfolio of travel agencies provide similar financial results compared to the EVA indicator?
Methods: For measuring the financial performance of businesses, the method of Principal Component Analysis (PCA) and the indicator Economic Value Added (EVA) were chosen. Spearman's rank-order correlation was applied in order to reveal the concordance rate of the analyzed travel agencies.
Findings & Value added: The results indicate that by applying the PCA method, 6 key performance factors can be identified. Moreover, the findings revealed that the assessment of travel agencies using the PCA method and EVA indicator did not lead to the same financial results. Individual financial methods identified a different number of strong-performing and inefficient business entities. In this backdrop, we concluded that the business performance measurement based on the PCA method is not a suitable alternative to measuring performance using the EVA indicator. (original abstract)

Słowa kluczowe

EN

Travel agency; Financial performance; Benchmarking

PL

Biuro podróży; Wynik finansowy; Benchmarking

• Czasopismo: Oeconomia Copernicana
• Rocznik: 2020
• Tom: 11
• Numer: nr 1
• Strony: 95--116

Twórcy

autor

Erika Onuferová

• University of Prešov, Slovakia

autor

Veronika Čabinová

• University of Prešov, Slovakia

autor

Tünde Dzurov Vargová

• University of Prešov, Slovakia

Bibliografia

• Ali, S. N. M. (2018). The use of Economic Value Added as a benchmark for evaluating the performance of agricultural companies listed in the IRAQI stock exchange for 2010-2015. Turkish Online Journal of Design Art and Communication, 8. doi: 10.7456/1080MSE/120.
• Bacik, R., Fedorko, R., Abbas, E. W., Rigelsky, M., & Ivankova, V. (2019). The impact of selected quality managemnt attributes on the profitability of top hotels in the Visegrad group countries. Polish Journal of Management Studies, 19(1). doi: 10.17512/pjms.2019.19.1.04.
• Balcerzak, A. P., Kliestik, T., Streimikiene, D., & Smrcka, L. (2017). Nonparametric approach to measuring the efficiency of banking sectors in European Union countries. Acta Polytechnica Hungarica, 14(7). doi: 10.12700/APH.14.7.2017.7.4.
• Balcerzak, A. P. & Pietrzak, M. B. (2016). Quality of institutions for knowledge based economy within new institutional economics framework. Multiple criteria decision analysis for European countries in the years 2000-2013. Economics & Sociology, 9(4). doi:10.14254/2071-789X.2016/9-4/4.
• Benasseni, J. (2018). A correction of approximations used in sensitivity study of principal component analysis. Computational Statistics, 33(4). doi: 10.1007/s00180-017-0790-7.
• Damodaran, A. (2012). Investment valuation: tools and techniques for determining the value of any asset. New York: John Wiley & Sons.
• Damodaran, A. (2019a). Risk premiums for other markets. Retrieved from http://pages.stern.nyu.edu/~adamodar/ (15.11.2018).
• Damodaran, A. (2019b). Levered and unlevered betas by industry. Retrieved from http://pages.stern.nyu.edu/~adamodar/ (15.11.2018).
• Daraban, M. C. (2017). Economic Value Added - a general review of the concept. Ovidius University Annals: Economic Sciences Series, 17(1).
• Fialkovska, A. (2017). Determinant factors of Economic Value Added: case of Ukrainian wineries. In Proceedings of the 17th annual conference on finance and accounting. Springer proceedings in business and economics. Cham: Springer International Publishing AG. doi: 10.1007/978-3-319-49559-0_68.
• Gallo, P., Balogova, B., Tomcikova, L., & Nemec, J. (2019). The impact of the innovative Total Quality Management tool in small and medium-sized enterprises. Marketing and Management of Innovations, 4. doi: 10.21272/mmi.2019.4-02.
• Guermat, C., Misirlioglu, I. U., & Al-Omush, A. M. (2019). The long-term effect of Economic Value Added adoption on the firm's business decision. Accounting Research Journal. 32(3). doi: 10.1108/ARJ-01-2018-0018.
• Hebak, P., Hustopecky, J., Jarosova, E., & Pecakova, I. (2007). Multidimensional statistical methods. Prague: Inforamtorium.
• Hyranek, E., Grell, M., Nagy, L., & Durinova, I. (2018). The economicmathematical nature of the HGN model concept as a tool for measuring performance of enterprises. Journal of Economics, 66(3).
• Jiang, L., Li, Y., & Cai, L. P. (2018). Evaluation of enterprise economic performance based on principal component analysis. Journal of Interdisciplinary Mathematics, 21(5). doi: 10.1080/09720502.2018.1498004
• Kocmanova, A., Docekalova, M. P., & Simanaviciene, Z. (2017). Corporate sustainability measurement and assessment of Czech manufacturing companies using a composite indicator. Engineering Economics, 28(1). doi: 10.5755/j01.ee.28.1.15323
• Kollar, B., & Kliestik T. (2014). Simulation approach in credit risk models. In: G. Lee (Ed.). 4th international conference on applied social science, Information Engineering Research Institute, advances in education research, 51. Newark: Information Engineering Research Institution.
• Kozena, M., & Jelinkova, L. (2014). Specifics of performance measurement and management manufacturing company. In SGEM 2014 conference proceedings on political sciences, law, finance, economics and tourism, 2(2014). doi:10.5593/SGEMSOCIAL2014/B22/S6.083.
• Kral, P. (2009). Multidimensional statistical methods focusing on solving problems of economic practice. Universitas Matthiae Belii in Banska Bystrica.
• Li, Y C., & Zhang, Q. (2011). The application of principal component analysis on financial analysis in real estate listed company. In: Procedia engineering: international conference on advanced in control engineering and information science, 15. doi: 10.1016/j.proeng.2011.08.845.
• Malichova, E., Durisova, M., & Tokarcikova, E. (2017). Models of application Economic Value Added in automotive company. Transport Problems, 12(3). doi: 10.20858/tp.2017.12.3.9.
• Mihalcova, B., Gallo P., & Pruzinsky, M. (2017). Measurement of company performance in a health resort in Slovakia taken as an example. Quality - Access to Success, 18(158).
• Milichovsky, F. (2015). Effectiveness of marketing activities in engineering in Czech Republic. Business: Theory and Practice, 16(2). doi: 10.3846/btp.2015.436.
• Na, W., & Qian, R. (2017). Enterprise value evaluation: application and improvement based on cash flow model and Economic Value Added model. In: Y. Huo & Z. Cheng (Eds.). Proceedings of the 2017 international conference on humanities science, management and education technology, 96. Paris: Atlantis Press.
• NBS (2019). Long-term interest rates statistics. Retrieved from https://www.nbs.sk/sk/statisticke-udaje/financne-trhy/urokove-sadzby/dlhodobe-urokove-sadzby (10.12.2018).
• Panigrahi, S. K. (2017). Economic Value Added and traditional accounting measures for shareholder's wealth creation. Asian Journal of Accounting and Governance, 8(1). doi: 10.17576/AJAG-2017-08-11.
• Pearson, K. (1901). On lines and planes of closest fit to systems of points in space. Philosophical Magazine, 2(11).
• Salaga, J., Bartosova, V., & Kicova, E. (2015). Economic Value Added as a measurement tool of financial performance. Procedia Economics and Finance, 26(2015). doi: 10.1016/S2212-5671(15)00877-1.
• Santos, J. V., Tavares, A. D., Azevedo, Y. G., & Neto, R. M. (2018). Relationship between stock return and Economic Value Added (EVA): empirical evidences in Brazilian public companies. Revista Evidenciacao Contabil & Financas, 6(1). doi: 10.18405/recfin201801077.
• Simionescu, L., N., & Dumitrescu, D. (2018). Empirical study towards business social responsibility practices and company financial performance. Evidence for company listed on the Bucharest stock Exchange. Sustainability, 10(9). doi: 10.3390/su10093141.
• Sofrankova, B., Horvathova, J., Kiselakova, D., & Matkova, S. (2017). Identification of key performance indicators with the application of mathematical and statistical methods. Journal of Financial Studies & Research, 2017. doi: 10.5171/2017.403204.
• Sofrankova, B., Kiselakova, D., Horvathova, J. (2017). Actual questions of risk management in models affecting enterprise performance. Journal of Economics, 65(7).
• Soltes, V., & Gavurova, B. (2015). Modification of performance measurement system in the intentions of globalization trends. Polish Journal of Management Studies. 11(2).
• Stern, J. M., Shiely, J. S., & Ross, I. (2003). The EVA challenge: implementing Value-Added change in an organization. New York: John Wiley & Sons.
• Terenteva, T., Shashlo, N., Kuzubov, A., & Shnaider, V. (2018). Economic Added Value as a tool of cost-oriented management by business structures of industry. National Academy of Managerial Staff of Culture and Arts Herald, 2.
• Tung, C. T., Lee, Y. J., & Wang, K. H. (2009). Combining grey theory and Principal Component Analysis to evaluate financial performance of the airline companies in Taiwan. Journal of Grey System, 21(4).
• Vochozka, M., Rowland, Z., & Vrbka, J. (2016). Financial analysis of an average transport company in the Czech Republic. Our Sea, 63(3). doi.org/10.17818/NM/2016/SI28.
• Zhukovets, T., Strelnik, E., & Usanova, D. (2017). Regression analysis of key efficiency indicators in the context of corporate financial management based on the indicator of the Economic Value Added (EVA). National Academy of Managerial Staff of Culture and Arts Herald, 4.

Identyfikatory

DOI

10.24136/oc.2020.004