An evaluation of selected assets and their impact on the declarative characteristic of ratio indicators in financial analyses

Abstract

A company’s fi nancial performance is essential when investors compare its competitive position to determine how attractive it is. That is why performance needs to be evaluated from both the qualitative and quantitative points of view. The classical fi nancial approach to measuring a company’s performance based on past results is no longer suffi cient; it needs to be complemented with a non-fi nancial measurement method. This paper focuses on fi nancial analysis, which is one of the tools used for assessing the performance and fi nancial status of companies. The current individual fi nancial analysis indicators must be processed taking into account the infl uences that potentially affect and distort the results, as well as with their comparability over time and within a single accounting unit or among individual companies. As far as fi nancial analysis is concerned, attention has to be paid to the method used for evaluating assets and liabilities, as this issue greatly affects the informative utility of fi nancial statements and the fi nal data relevant to income from operations, which are the input data for processing individual fi nancial indicators. After that the paper deals with the research that was focused on companies located in the Czech Republic. The aim of the research was to analyse the methods of measurement of fi nancial performance use the Czech companies. Another important task is to plot the approach used by companies to conduct fi nancial analysis in the Czech Republic. It should illustrate whether companies process such analysis independently and regularly using their in-house information systems and identify the most commonly- assessed indicators. It is important that companies process their fi nancial statements so that they can subsequently be assessed and compared over time while maintaining adherence to the same accounting procedures.