Liquidity Values in Municipal Accounting in the Czech Republic

Abstract

The aim of this paper is to present the results of a study which analyzes the use of liquidity management among municipalities within the Czech Republic. A research carried out by the Faculty of Management and Economics of TBU in Zlín found that the use of liquidity management in Czech cities is still relatively low. Two basic data collection methods were applied: the use of accounting information from the public database (260 municipalities) and a questionnaire survey implemented in the form of controlled interviews (167 respondents). Applying the accounting data database, we sought to determine whether the recommended values of individual liquidity ratios are also valid in the public sector, specifically among municipalities. Based on the data analysis, we ascertained that most liquidity values of municipalities indicate higher values than those stated as recommended for the private sector, but based on this statistical evaluation, it is not possible as of yet to positively confirm this hypothesis at the significance level 0.05. The results of the study showed that municipalities use liquidity management within a limited scope. Non-profit organizations are recommended to control their liquidity according to general rules, whereas for municipalities it is most advantageous to use the quick ratio and cash position ratio. Each municipality can therefore determine the mutual relationship between components of short-term assets and short-term liabilities according to their own conditions and limitations, e.g. when handling flow transfers, money in funds, or tax income and expenses.

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“…Сондай-ақ мемлекеттік сектордың аудит тарихы бойынша өзекті зерттеулері бар. Мемлекеттік сектор аудитінің заманауи тарихы мен телеологиялық дамуын зерттеу үшін жаңа мемлекеттік басқару контексін пайдаланды (Otrusinova, M., Kulleova, A., 2019). Тағы бір маңызды зерттеу Солтүстік Еуропа елдерінің тәжірибесіне қатысты.…”

Government Debt and Economic Freedom in the CEE countries. Less is More

“…On the other hand, it suggests also that selected municipalities should improve their liquidity ratios that are only on average level which is debatable fi nding according to calculated mean values of the current ratio (8.628) and the quick ratio (6.679) or also median values of the current ratio (4.985) and the quick ratio (3.498). A more in-depth analysis of liquidity management from a municipal perspective of Otrusinova and Kulleova (2019) indicated only limited scope of its use within selected Czech municipalities and prospective space for further development of this issue.…”

Quality Management Systems and Working Capital SMEs in GPO—A Case of Poland

“…Therefore, the working capital management process is very complicated and is fundamental for building the financial security of enterprises. The subject of working capital management, and thus the management of trade credit and risk in SMEs, is currently a subject that is being extensively discussed in studies on the V4 countries (Cicea et al 2019;Kontus and Mihanovic 2019;Ključnikov et al 2019;Otrusinova and Kulleova 2019;Sofiina 2020;Susilowati et al 2020). This is due to the fact that there are developing markets and substantial foreign concerns regarding these markets, which increases competition in virtually every industry.…”