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

Abstract

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.

Analysis of Motives behind the Usage of Earnings Management in Practice under the Conditions of Global Economy

“…The consequence of the flexibility allowed can be observed, for example, in two companies which are identical in each financial aspect and carry out the same economic transactions during the year. The financial statements of these companies could only be identified if both apply the same accounting policies and methods, which is highly unlikely given the complexity and flexibility of the accounting standards [5].…”

Equity Management of the Tourism Sector Enterprises in the Slovak Republic

“…The basic feature of tourism is traveling, visiting, getting to know new areas, cultures, and customs on the spot, which is associated with the movement of people. Before the pandemics, such travel became affordable for an ever-increasing group of Slovaks, who also made extensive use of it (Štrba et al, 2020;Onuferová et al, 2020;Matijová, 2019). This applied not only to travel within the country but also to travel abroad, where the price of air tickets was often so low that anyone could travel.…”

Motives and techniques of earnings management used in a global environment

“…It represents a selection of accounting policies made by the manager affecting revenues as well as the achievement of the positive performance of companies. [3] Earnings management occurs in a global environment in many companies that are motivated to manage their profits to create the impression of a prosperous company in the business world in the eyes of third parties. [4] Earnings management practices can exacerbate information asymmetry between stakeholders such as creditors, suppliers and investors, and the focal firm.…”