New Articles – Finance

Utilisation of the balanced capital structure creates the base for the stable development of any company. Having optimal capital structure is a key strategic task for financial management. Currently, there is a myriad of theories describing the current state and recommending the optimal state of enterprises’ capital structure. Fundamental ones are the Modigliani-Miller theorem (Modigliani & Miller, 1958, 1963), the trade-off theory (Kraus & Litzenberger, 1973), the pecking order theory of capital structure (Fisher & Donaldson, 1962), and dynamic trade-off models (Brealey & Myers, 2014). Verifying the statement: “The behaviour of Czech companies confirms the preference for debt financing over equity. This behaviour is the same across sectors.” is the first goal of this contribution. Based on the result, we can reveal fundamental capital structure theory for Czech companies and we can set the recommendations valid for the Czech environment in general. This will help financial managers to lead their enterprises into balanced capital structures.

In the last few years, the bank lending channel has attracted enormous interest among researchers (Albertazzi et al., 2021; Cantero-Saiz et al., 2014, 2022; Jiménez et al., 2020). This channel proposes that monetary policy decisions alter the supply of loans by affecting the financial conditions of banks (Bernanke & Blinder, 1988; Disyatat, 2011). However, the reaction of banks to monetary shocks depends on their financial strength. In this regard, the credit supply of weaker banks, such as those that are smaller, less liquid or more poorly capitalised, is more sensitive to monetary impulses because these banks have more difficulties in obtaining loanable funds (Kashyap & Stein, 2000; Kishan & Opiela, 2000). Another important factor that can also affect the financial conditions of banks and the bank lending channel, which has received scant exploration, is the implementation of sustainable business models, which are becoming a key element in the strategies and practices of many banks.

Fraud has metamorphosed into a major global concern. Regardless of size, profitability, or industry, organizations currently face severe challenges concerning economic and operational sustainability in the wake of deliberate and unethical fraudulent acts. The PricewaterhouseCoopers (hereinafter referred to as PwC) (2020) survey revealed that 47% of international firms were affected by fraud compared to 49% in 2018, 36% in 2016, 37% in 2014, and 34% in 2011. The PwC’s (2020) survey respondents reported total losses of 42 billion USD owing to fraud that negatively impacted brands, reputations, and market shares. Ironically, only 56% of the affected organizations conducted investigations, whereas barely one-third of these companies reported fraudulent outcomes to their boards.

Identifying the optimal location for a business in a market environment depends on the quality and availability of up-to-date information on comparable businesses, maintaining the conditions of comparability, selection of indicators and the methods of analysis of the financial and economic position of the business in the space. In this paper, food retail stores are evaluated. We have focused on this type of organization, because they are also of some importance for people from smaller towns, especially villages where there is only 1 store. In the event of its closure, residents are dependent on travelling to larger cities. Doing business in food retail is not as easy as it seems. With the arrival of retail chains, there was a significant reversal in consumer purchasing behaviour. People began preferring cheaper and lower-quality food. Today, the situation has changed and a growing number of consumers also place emphasis on the quality of food sold. They pay for quality and safe food.

In March 2020, we witnessed enormous turbulence in the global markets caused by the escalation of problems related to the new medical phenomenon of coronavirus (COVID-19) pandemic. High fluctuations of indices were observed during the pandemic, but the crisis caused by fighting the virus was also reflected in firms’ essentials. The uncertainty provoked by the pandemic in the real economy also influenced listed companies. Some of them were forced to restrict or cease their operations temporarily. One of the impacts that this caused relatively quickly was on dividend decisions. Listed companies that had paid dividends for many years faced a difficult decision on whether they should still pay them or instead restrict or cease issuing dividends. The purpose of such actions would be to build a capital and liquidity buffer.