Business performance from the perspective of managers and accounting data

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Year of publication 2019
Type Article in Proceedings
Conference The Poprad Economic and Management Forum 2019
MU Faculty or unit

Faculty of Economics and Administration

Keywords business performance; financial performance; subjective evaluation; objective evaluation; financial ratios
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Description The subject of this article is business performance, how it is perceived by managers and how it is reflected in a company’s accounting data. The objective of the article is to determine whether business performance is understood by managers in the same way as it is reflected in the accounting data, i.e. whether the manager’s subjective evaluation corresponds with the objective evaluation of the accounting data. We asked managers to evaluate their current business performance relative to their competition and to the previous year. Subsequently, we computed the performance of their companies using selected financial indicators constructed from the accounting data. The two groups of indicators were then compared on a sample of companies from various sectors, with a majority from the secondary and tertiary sectors. The results demonstrated that subjective and objective evaluations differ; however, we found a match for the profitability indicators.
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