G30 - Corporate Finance and Governance: GeneralReturn

The paper deals with the examining the possibilities for diagnosing the corporate financial health using Data Envelopment Analysis (DEA) technique. The main aim of the paper is to present a new proposal for diagnosing the corporate financial health by DEA, to predict financial distress of Slovak manufacturing companies using the proposed procedure, and to assess the potential of DEA as a tool for predicting financial distress of the company. Due to the special input and output variables selection and the construction of the Corporate Distress Frontier, the proposed procedure is very different from the conventional use of DEA. The proposed two-step procedure results into the identification of three zones of corporate financial health with different stage of corporate distress risk. The application of the proposed procedure to Slovak manufacturing companies and its comparison with the logistic regression model and decision tree show relatively satisfactory results of the proposed methodology in terms of correct classification of non-bankrupt firms.

This article deals with business performance. The aim of this article is to identify performance factors, ie. factors that should have an impact on performance in long-term horizon, analyze these factors and their relationships, and based on this analysis to create a complex model of business performance. First sub-goal is to identify internal factors affecting the performance of companies in the new economy and next sub-goal is to verify the influence of the potential factors of performance on the business performance in terms of both market and financial performance in the manufacturing companies in the Czech Republic. It means to confirm or refute the findings on the impact of these factors on business performance of the companies in the Czech Republic. The article examines the importance of quality, human capital, customer capital and information technology on business performance through a questionnaire survey and the use of statistical methods.

The qualitative changes in surroundings for companies operation are calling for necessity of assertion new tools and method, which will help to increase the quality of decision making and firm evaluation. To these tools belong scenarios and Monte Carlo simulation. The aim of the article is to describe these tools, their common features and differences, advantages and disadvantages. Further results and benefits of application of Monte Carlo simulation in risk analysis of investment project from economic practise are demonstrated.

The dramatically growing disproportion between the value of corporate assets and market valuation has resulted in a well-researched schism between strategic management and financial theory. Options theory provides a potent tool to resolve this issue. We propose a model which is consistent with both the Resource- and Contractual-Based Theories of the Firm and which demonstrates that corporate strategy can be perceived as a portfolio of embedded and real options. We further argue that embedded options typically serve as hedging instruments for real options which enhances their value and should be a major consideration when assessing the structure and form of contracts. Special emphasis is granted to human capital and the contractual arrangements through which firms purchase its product. Human capital is the key resource for the processes of real-options discovery and strategy-setting, both of which constitute the essential part of a modern firm's value.