IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v14y2021i23p7885-d687142.html
   My bibliography  Save this article

Financial Balance Analysis of Geothermal Companies in Poland Based on Managerial Cash Flows

Author

Listed:
  • Arkadiusz Kustra

    (Department of Economy and Management in Industry, AGH University of Science and Technology, 30-059 Kraków, Poland)

  • Sylwia Lorenc

    (Department of Economy and Management in Industry, AGH University of Science and Technology, 30-059 Kraków, Poland)

Abstract

The use of geothermal energy to produce heat and electricity has become increasingly important in recent years. This is mainly due to environmental issues and the need to ensure energy security. The aim of the article was to analyse and compare the ability to maintain cash balance of selected geothermal companies in Poland. The following were taken for verification: Przedsiębiorstwo Energetyki Cieplnej PEC Geotermia Podhalańska S.A., Geotermia Poddębice Sp. z o.o., Geotermia Mazowiecka S.A., Geotermia Pyrzyce Sp. z o.o. and Geotermia Czarnków Sp. z o.o. The adopted research methodology, combining accrual and cash recognition, allowed the analysis of the ability to create cash flows and maintain cash stability in 2016–2019. The study used financial data from the financial statements of the analysed companies. The analysis shows that the highest cash flows from assets defined as Free Cash Flow to Firm FCFF (over PLN 11,318 thousand) and the highest cash flows for owners Free Cash Flow to Equity FCFE (over PLN 10,005 thousand) are generated by Geotermia Mazowiecka S.A. At the same time, the balance between cash flows meeting the inequality FCFF ≥ FCFE + FCD, where FCD Free Cash Flow to Debt, determines the ability of assets to generate cash covering the current distribution of capital for its donors. Consequently, there is an increase in the value of cash resources identified in investments in the management balance sheet. Such a situation occurred in the case of Geotermia Poddębice Sp. z o.o. and Geotermia Mazowiecka S.A. The reverse situation, i.e., FCFF < FCFE + FCD is characteristic for cash imbalance. In such conditions there is a decrease in cash resources identified in the management balance. This occurred in PEC Geotermia Podhalańska S.A., Geotermia Pyrzyce Sp. z o.o. and Geotermia Czarnków Sp. z o.o.

Suggested Citation

  • Arkadiusz Kustra & Sylwia Lorenc, 2021. "Financial Balance Analysis of Geothermal Companies in Poland Based on Managerial Cash Flows," Energies, MDPI, vol. 14(23), pages 1-25, November.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:23:p:7885-:d:687142
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/14/23/7885/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/14/23/7885/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Aleksandra Szulc-Wrońska & Barbara Tomaszewska, 2020. "Low Enthalpy Geothermal Resources for Local Sustainable Development: A Case Study in Poland," Energies, MDPI, vol. 13(19), pages 1-20, September.
    2. World Commission on Environment and Development,, 1987. "Our Common Future," OUP Catalogue, Oxford University Press, number 9780192820808.
    3. Dang, Chongyu & (Frank) Li, Zhichuan & Yang, Chen, 2018. "Measuring firm size in empirical corporate finance," Journal of Banking & Finance, Elsevier, vol. 86(C), pages 159-176.
    4. Magdalena Ligus & Piotr Peternek, 2021. "The Sustainable Energy Development Index—An Application for European Union Member States," Energies, MDPI, vol. 14(4), pages 1-32, February.
    5. Kenneth J. Kopecky & Zhichuan (Frank) Li & Timothy F. Sugrue & Alan L. Tucker, 2018. "Revisiting M&M with Taxes: An Alternative Equilibrating Process," IJFS, MDPI, vol. 6(1), pages 1-12, January.
    6. Barbier, Edward B. & Burgess, Joanne C., 2017. "The sustainable development goals and the systems approach to sustainability," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 11, pages 1-23.
    7. Dincer, Ibrahim, 2000. "Renewable energy and sustainable development: a crucial review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 4(2), pages 157-175, June.
    8. Augutis, Juozas & Krikštolaitis, Ričardas & Martišauskas, Linas & Urbonienė, Sigita & Urbonas, Rolandas & Ušpurienė, Aistė Barbora, 2020. "Analysis of energy security level in the Baltic States based on indicator approach," Energy, Elsevier, vol. 199(C).
    9. Chih-Chun Kung & Bruce A. McCarl, 2018. "Sustainable Energy Development under Climate Change," Sustainability, MDPI, vol. 10(9), pages 1-4, September.
    10. Antonio Colmenar-Santos & Elisabet Palomo-Torrejón & Enrique Rosales-Asensio & David Borge-Diez, 2018. "Measures to Remove Geothermal Energy Barriers in the European Union," Energies, MDPI, vol. 11(11), pages 1-29, November.
    11. Wiktoria Sobczyk & Eugeniusz Jacek Sobczyk, 2021. "Varying the Energy Mix in the EU-28 and in Poland as a Step towards Sustainable Development," Energies, MDPI, vol. 14(5), pages 1-19, March.
    12. Joanna Boguniewicz-Zabłocka & Ewelina Łukasiewicz & Domenico Guida, 2019. "Analysis of the Sustainable Use of Geothermal Waters and Future Development Possibilities—A Case Study from the Opole Region, Poland," Sustainability, MDPI, vol. 11(23), pages 1-15, November.
    13. Paul L. Younger, 2015. "Geothermal Energy: Delivering on the Global Potential," Energies, MDPI, vol. 8(10), pages 1-18, October.
    14. Sławomir Kurpaska & Mirosław Janowski & Maciej Gliniak & Anna Krakowiak-Bal & Urszula Ziemiańczyk, 2021. "The Use of Geothermal Energy to Heating Crops under Cover: A Case Study of Poland," Energies, MDPI, vol. 14(9), pages 1-25, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wojciech Ćwięk & Andrzej Jaki & Łukasz Popławski & Tomasz Rojek, 2023. "Value-Creation Efficiency as a Decision-Making Basis and Its Assessment in the Financial Management of Energy Companies: Evidence from the Polish Capital Market," Sustainability, MDPI, vol. 15(2), pages 1-16, January.
    2. Martina Tuschl & Tomislav Kurevija, 2023. "Revitalization Modelling of a Mature Oil Field with Bottom-Type Aquifer into Geothermal Resource—Reservoir Engineering and Techno-Economic Challenges," Energies, MDPI, vol. 16(18), pages 1-27, September.
    3. Izabela Jonek-Kowalska & Sara Rupacz, 2023. "The Innovative Nature of Selected Polish Companies in the Energy Sector Compared to the Use of Renewable Energy Sources from a Financial and an Investor’s Perspective," Resources, MDPI, vol. 12(12), pages 1-19, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Magdalena Tutak & Jarosław Brodny & Peter Bindzár, 2021. "Assessing the Level of Energy and Climate Sustainability in the European Union Countries in the Context of the European Green Deal Strategy and Agenda 2030," Energies, MDPI, vol. 14(6), pages 1-32, March.
    2. Ewa Chomać-Pierzecka & Anna Sobczak & Edward Urbańczyk, 2022. "RES Market Development and Public Awareness of the Economic and Environmental Dimension of the Energy Transformation in Poland and Lithuania," Energies, MDPI, vol. 15(15), pages 1-18, July.
    3. Piotr Siemiątkowski & Patryk Tomaszewski & Joanna Marszałek-Kawa & Janusz Gierszewski, 2020. "The Financing of Renewable Energy Sources and the Level of Sustainable Development of Poland’s Provinces in the Area of Environmental Order," Energies, MDPI, vol. 13(21), pages 1-19, October.
    4. Aleksandra Matuszewska-Janica & Dorota Żebrowska-Suchodolska & Urszula Ala-Karvia & Marta Hozer-Koćmiel, 2021. "Changes in Electricity Production from Renewable Energy Sources in the European Union Countries in 2005–2019," Energies, MDPI, vol. 14(19), pages 1-27, October.
    5. Manel Kamoun & Ines Abdelkafi & Abdelfetah Ghorbel, 2019. "The Impact of Renewable Energy on Sustainable Growth: Evidence from a Panel of OECD Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 10(1), pages 221-237, March.
    6. Emilia Conte, 2018. "The Era of Sustainability: Promises, Pitfalls and Prospects for Sustainable Buildings and the Built Environment," Sustainability, MDPI, vol. 10(6), pages 1-16, June.
    7. Domenico Morrone & Rosamartina Schena & Danilo Conte & Candida Bussoli & Angeloantonio Russo, 2022. "Between saying and doing, in the end there is the cost of capital: Evidence from the energy sector," Business Strategy and the Environment, Wiley Blackwell, vol. 31(1), pages 390-402, January.
    8. Damien Bazin & Emna Omri & Nouri Chtourou, 2015. "Solar Thermal Energy for Sustainable Development in Tunisia," Post-Print halshs-01070616, HAL.
    9. Sean M. Watson & Gioia Falcone & Rob Westaway, 2020. "Repurposing Hydrocarbon Wells for Geothermal Use in the UK: The Onshore Fields with the Greatest Potential," Energies, MDPI, vol. 13(14), pages 1-29, July.
    10. Huiru Zhao & Sen Guo, 2015. "External Benefit Evaluation of Renewable Energy Power in China for Sustainability," Sustainability, MDPI, vol. 7(5), pages 1-23, April.
    11. Lotfabadi, Pooya, 2015. "Analyzing passive solar strategies in the case of high-rise building," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 1340-1353.
    12. Luis Miguel Fonseca & José Pedro Domingues & Alina Mihaela Dima, 2020. "Mapping the Sustainable Development Goals Relationships," Sustainability, MDPI, vol. 12(8), pages 1-15, April.
    13. Gunnarsdottir, I. & Davidsdottir, B. & Worrell, E. & Sigurgeirsdottir, S., 2021. "Sustainable energy development: History of the concept and emerging themes," Renewable and Sustainable Energy Reviews, Elsevier, vol. 141(C).
    14. Wamukonya, Njeri, 2007. "Solar home system electrification as a viable technology option for Africa's development," Energy Policy, Elsevier, vol. 35(1), pages 6-14, January.
    15. Maria Spiliotopoulou & Mark Roseland, 2020. "Urban Sustainability: From Theory Influences to Practical Agendas," Sustainability, MDPI, vol. 12(18), pages 1-19, September.
    16. Bernard Amadei, 2021. "Systemic Modeling of the Peace–Development Nexus," Sustainability, MDPI, vol. 13(5), pages 1-21, February.
    17. Karbassi, A.R. & Abduli, M.A. & Mahin Abdollahzadeh, E., 2007. "Sustainability of energy production and use in Iran," Energy Policy, Elsevier, vol. 35(10), pages 5171-5180, October.
    18. Lin Chen & Sumei Luo & Tian Zhao, 2019. "Financial Constraints, Trade Mode Transition, and Global Value Chain Upgrading of Chinese Firms," Sustainability, MDPI, vol. 11(17), pages 1-18, August.
    19. Yannis Politis & Evangelos Grigoroudis, 2022. "Incorporating the Sustainability Concept in the Major Business Excellence Models," Sustainability, MDPI, vol. 14(13), pages 1-20, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:14:y:2021:i:23:p:7885-:d:687142. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.