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Factors predicting companies’ crisis in the engineering industry from the point of view of financial analysis

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  • Jozef Lukáč
  • Cecília Olexová
  • Zuzana Kudlová

Abstract

A key factor for business management is the assessment of the financial situation of companies. Nowadays, it is essential to monitor the liquidity crisis, which is closely linked to corporate crises. The aim of the paper is to analyse a selected sector of the economy from the perspective of the corporate crisis and to identify the factors of crisis. More than 2000 engineering companies in Slovakia were analysed during the period from 2015 to 2019 with the aim of analysing financial results, especially in the area of financial forecast for the future. In the analysis, statistical testing of the significance of relationships using the Spearman correlation coefficient, the significance of differences by the power of t-test, regression and clustering were used. A significant part of the paper is the analysis of selected indicators of the company’s crisis—Altman’s Z score and the IN05 index. The results indicate that engineering companies in Slovakia are achieving good results and their financial situation is improving within the years between 2015–2019. The results can also be used as a starting point for research concerning the impact of COVID-19 in this area. In the context of corporate crisis management, engineering companies behave in the same way but it is necessary to monitor individual factors that can detect a corporate crisis. Possible measures would thus lead to the stabilization of financial results and long-term sustainable positive prospects for companies in the future.

Suggested Citation

  • Jozef Lukáč & Cecília Olexová & Zuzana Kudlová, 2022. "Factors predicting companies’ crisis in the engineering industry from the point of view of financial analysis," PLOS ONE, Public Library of Science, vol. 17(2), pages 1-21, February.
  • Handle: RePEc:plo:pone00:0264016
    DOI: 10.1371/journal.pone.0264016
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    References listed on IDEAS

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    1. Michael McAleer, 2020. "Prevention Is Better Than the Cure: Risk Management of COVID-19," JRFM, MDPI, vol. 13(3), pages 1-5, March.
    2. Melanie Arntz & Terry Gregory & Ulrich Zierahn, 2016. "The Risk of Automation for Jobs in OECD Countries: A Comparative Analysis," OECD Social, Employment and Migration Working Papers 189, OECD Publishing.
    3. Sylkin, Oleksandr & Shtangret, Andriy & Ogirko, Olha & Melnikov, Oleksandr, 2018. "Assessing the financial security of the engineering enterprises as preconditions of application of anti-crisis management: practical aspect," Business and Economic Horizons (BEH), Prague Development Center, vol. 14(4), pages 926-940, October.
    4. Sylkin, Oleksandr & Shtangret, Andriy & Ogirko, Olha & Melnikov, Alexander, 2018. "Assessing the financial security of the engineering enterprises as preconditions of application of anti-crisis management: practical aspect," Business and Economic Horizons (BEH), Prague Development Center (PRADEC), vol. 14(4), October.
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