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Special Issue "Company Assessment: Basis of Its Sustainable Development"

A special issue of Sustainability (ISSN 2071-1050). This special issue belongs to the section "Economic and Business Aspects of Sustainability".

Deadline for manuscript submissions: closed (30 September 2020).

Special Issue Editor

Dr. Marek Vochozka
E-Mail Website
Guest Editor
Institute of technology and business in Ceske Budejovice (Czech Republic)
Special Issues, Collections and Topics in MDPI journals

Special Issue Information

Dear Colleagues,

As a Guest Editor, I would like to invite you to participate in the Special Issue “Company Assessment: Basis of Its Sustainable Development” in the Journal Sustainability. The offered topic is current; I have been interested in it for my entire professional career. It involves company evaluation, company assessment, financial analyses, benchmarking, corporate finance, financial health, financial distress, and bankruptcy.

I hope you will see it as an opportunity to discuss your research results with people interested in your topic, i.e., a company assessment.

Dr. Marek Vochozka
Guest Editor

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All papers will be peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Sustainability is an international peer-reviewed open access semimonthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1900 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • company evaluation
  • company assessment
  • financial analyses
  • benchmarking
  • corporate finance
  • financial health
  • financial distress
  • bankruptcy

Published Papers (10 papers)

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Research

Article
Corporate Environmental Responsibility through the Prism of Strategic Management
Sustainability 2020, 12(22), 9589; https://doi.org/10.3390/su12229589 - 17 Nov 2020
Cited by 9 | Viewed by 1014
Abstract
This contribution considers the theoretical, methodological, and analytical aspects of implementing a strategic approach to the management of corporate environmental responsibility in practice. The economic and normative approach to understanding the essence of corporate environmental responsibility is revealed; the key factors are systematized. [...] Read more.
This contribution considers the theoretical, methodological, and analytical aspects of implementing a strategic approach to the management of corporate environmental responsibility in practice. The economic and normative approach to understanding the essence of corporate environmental responsibility is revealed; the key factors are systematized. Based on the generalization of theoretical and methodological provisions for corporate environmental responsibility, the authors formulated a concept for the strategic management thereof. An approach to understanding the content and forms of environmental responsibility at different stages of a company’s lifecycle is formulated. The main indicators that enable the analysis of corporate environmental responsibility from the point of view of the chain “inputs-processes-outputs” are systematized. Analytical studies of corporate environmental responsibility are conducted on the basis of information concerning automotive companies, in particular in terms of the following main areas: the study of global trends, monitoring of environmental goals and their reflection in development strategy, comprehensive analysis of environmental responsibility, the study of the balance of environmental and economic indicators. To achieve the aforementioned, the following were used: quantitative and qualitative methods, analytical and comparative methods of processing, analysis and synthesis of statistical information, economic and mathematical modelling, etc. The mechanism of transforming global environmental challenges into environmental responsibility management in practice is substantiated. An organizational mechanism is put forward for developing an environmental responsibility management system based on a strategic approach focused on implementation in practice. The key tools for implementing theoretical and methodological provisions in management practice are also identified. Full article
(This article belongs to the Special Issue Company Assessment: Basis of Its Sustainable Development)
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Article
Creating a Comprehensive Method for the Evaluation of a Company
Sustainability 2020, 12(21), 9114; https://doi.org/10.3390/su12219114 - 02 Nov 2020
Cited by 3 | Viewed by 761
Abstract
For investment purposes, the evaluation of a company is not only a matter for a company itself, but also for shareholders and external persons. There are many methods for evaluating a company. This contribution therefore focuses on the creation of a comprehensive method [...] Read more.
For investment purposes, the evaluation of a company is not only a matter for a company itself, but also for shareholders and external persons. There are many methods for evaluating a company. This contribution therefore focuses on the creation of a comprehensive method for the evaluation of an industrial enterprise, one that can be used to predict potential future bankruptcies, using a dataset of financial statements of active companies and those in liquidation in the period 2015–2019. Artificial neural networks were used to process the data, specifically logistic regressions from the data processed in the Statistica and Mathematica software programmes. The results showed that the models created using the Mathematica software are not applicable in practice due to the parameters of the obtained results. In contrast, the artificial neural structures obtained using the neural network model in the Statistica software were prospective due to their performance, which is almost always above 0.8, and the logical economic interpretation of the relevant variables. All the generated and retained networks show excellent performance and few errors. However, one of the artificial structures, network no. 4 (MLP 16-16-2), produces better results than the others. Overall, accuracy is almost 81%. In the case of the classification of companies capable of surviving financial distress, accuracy is almost 90%, with that for the classification of companies at risk of going into bankruptcy at nearly 55%. Full article
(This article belongs to the Special Issue Company Assessment: Basis of Its Sustainable Development)
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Article
Credit Absorption Capacity of Businesses in the Construction Sector of the Czech Republic—Analysis Based on the Difference in Values of EVA Entity and EVA Equity
Sustainability 2020, 12(21), 9078; https://doi.org/10.3390/su12219078 - 31 Oct 2020
Cited by 4 | Viewed by 864
Abstract
The contribution deals with the economic value added and its influence on credit absorption capacity. The aim was to determine the significance of the difference between the economic value added (EVA) entity and EVA equity indicators on credit absorption by the construction sector [...] Read more.
The contribution deals with the economic value added and its influence on credit absorption capacity. The aim was to determine the significance of the difference between the economic value added (EVA) entity and EVA equity indicators on credit absorption by the construction sector in the Czech Republic. The data came from the Albertina database of Bisnode Czech Republic for the period 2012–2018; small and medium-sized enterprises, in particular, were selected. The most important factor for calculating the amount of credit absorption depends on the EVA entity indicator and the weighted average cost of capital. The calculations produced negative values for credit absorption, which reflects an unattractive investment climate for business owners and their creditors. In other words, loans sought by enterprises in the Czech construction sector do not lead to a greater degree of realization of their goals, i.e., an increase in value for shareholders. Full article
(This article belongs to the Special Issue Company Assessment: Basis of Its Sustainable Development)
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Article
The Intrinsic Value of an Enterprise Determined by Means of the FCFE Tool
Sustainability 2020, 12(21), 8868; https://doi.org/10.3390/su12218868 - 26 Oct 2020
Viewed by 796
Abstract
This paper deals with the determination of the intrinsic value of the company Seznam.cz, a.s. using discounted cash flow. Specifically, it is concerned with determining the value of the business from the perspective of the company’s shareholders. The Free Cash Flow to Equity [...] Read more.
This paper deals with the determination of the intrinsic value of the company Seznam.cz, a.s. using discounted cash flow. Specifically, it is concerned with determining the value of the business from the perspective of the company’s shareholders. The Free Cash Flow to Equity (FCFE) method is chosen for analysis and determination of the value. According to this method, the specific FCFE values are discovered. However, the enterprise value must also be analyzed on the basis of other key indicators, such as financial leverage, the Capital Asset Pricing Model (CAPM) method, or the net present and future value of the FCFE. This is especially important so that the results can be put into mutual relations and a sufficient representative value of the FCFE results can be achieved. Input values stem from the company’s annual reports. From the results of the mentioned methods and indicators, it was found that the value of the FCFE is quite high, which means that the capital used is used appropriately. Based on the result of the continuing value of the FCFE, it can be said that the company’s intrinsic value is at a very good level. Full article
(This article belongs to the Special Issue Company Assessment: Basis of Its Sustainable Development)
Article
Revisiting Stakeholder Theory and Environmentalism: Evidence from an Emerging Economy
Sustainability 2020, 12(20), 8751; https://doi.org/10.3390/su12208751 - 21 Oct 2020
Cited by 3 | Viewed by 964
Abstract
In this study, we evaluated corporate environmental activities within the framework of stakeholders’ concerns and taking an emerging economy as the field of study. This paper integrates the stakeholder theory and corporate environmental behavior to develop a model and then tests this model [...] Read more.
In this study, we evaluated corporate environmental activities within the framework of stakeholders’ concerns and taking an emerging economy as the field of study. This paper integrates the stakeholder theory and corporate environmental behavior to develop a model and then tests this model in an emerging economy context. Data were collected through a questionnaire survey from managers operating in a variety of industries in Pakistan. A structural equation modeling technique has been used for data analysis. Results revealed that regulatory bodies are the most significant while media, customers, and activists are insignificant stakeholders. Top management commitment is identified as an important endogenous and exogenous variable. Full article
(This article belongs to the Special Issue Company Assessment: Basis of Its Sustainable Development)
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Article
Determining the Increase in a Building’s Appreciation Rate Due to a Reconstruction
Sustainability 2020, 12(18), 7690; https://doi.org/10.3390/su12187690 - 17 Sep 2020
Cited by 2 | Viewed by 593
Abstract
The reconstruction of buildings generally prolongs their useful life, increases their utility value, and last but not least, leads to an increase in their value. These assumptions only apply if an independent third party reaches the same conclusion together with the owner. However, [...] Read more.
The reconstruction of buildings generally prolongs their useful life, increases their utility value, and last but not least, leads to an increase in their value. These assumptions only apply if an independent third party reaches the same conclusion together with the owner. However, the undesirable effect of the reconstruction of a building may be a decrease in its value. The aim of this contribution is to determine the change in value of an older sample building assessed in the included case study as a result of its reconstruction. Valuation methods are applied, which, as it turns out, reveal the inaccuracy of the subjective view of the person who reconstructed the building. The resulting change in the value of the sample building is discussed from the point of view of the applied valuation methods and other value-creating aspects (subjective view of the owner on the value of the building, historical value of the building, etc.). The contribution concludes with recommendations for maximizing the increase in value of a property through its reconstruction so as to eliminate the risk of a decrease in its value. Full article
(This article belongs to the Special Issue Company Assessment: Basis of Its Sustainable Development)
Article
Bankruptcy or Success? The Effective Prediction of a Company’s Financial Development Using LSTM
Sustainability 2020, 12(18), 7529; https://doi.org/10.3390/su12187529 - 12 Sep 2020
Cited by 14 | Viewed by 1059
Abstract
There is no doubt that the issue of making a good prediction about a company’s possible failure is very important, as well as complicated. A number of models have been created for this very purpose, of which one, the long short-term memory (LSTM) [...] Read more.
There is no doubt that the issue of making a good prediction about a company’s possible failure is very important, as well as complicated. A number of models have been created for this very purpose, of which one, the long short-term memory (LSTM) model, holds a unique position in that it generates very good results. The objective of this contribution is to create a methodology for the identification of a company failure (bankruptcy) using artificial neural networks (hereinafter referred to as “NN”) with at least one long short-term memory (LSTM) layer. A bankruptcy model was created using deep learning, for which at least one layer of LSTM was used for the construction of the NN. For the purposes of this contribution, Wolfram’s Mathematica 13 (Wolfram Research, Champaign, Illinois) software was used. The research results show that LSTM NN can be used as a tool for predicting company failure. The objective of the contribution was achieved, since the model of a NN was developed, which is able to predict the future development of a company operating in the manufacturing sector in the Czech Republic. It can be applied to small, medium-sized and manufacturing companies alike, as well as used by financial institutions, investors, or auditors as an alternative for evaluating the financial health of companies in a given field. The model is flexible and can therefore be trained according to a different dataset or environment. Full article
(This article belongs to the Special Issue Company Assessment: Basis of Its Sustainable Development)
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Article
Financial Analyses and Corporate Evaluation on Sustainable Ability to Generate Excess Profit
Sustainability 2020, 12(11), 4647; https://doi.org/10.3390/su12114647 - 06 Jun 2020
Cited by 1 | Viewed by 848
Abstract
This study empirically examined financial analyses and a market assessment on goodwill. Goodwill is not an individually identifiable asset but is recognized as an intangible asset because it is viewed as having future economic benefits from a business combination. The verification period for [...] Read more.
This study empirically examined financial analyses and a market assessment on goodwill. Goodwill is not an individually identifiable asset but is recognized as an intangible asset because it is viewed as having future economic benefits from a business combination. The verification period for this study was from 2011 to 2019. The sample companies were 13,522 firms-years satisfying the selection criteria among listed companies in the Korean stock market. As a result of empirical analysis, it was found that goodwill is related to stock prices. Goodwill was shown to serve as useful accounting information by reflecting the economic realities of intangible assets called creating excess profitability and sustainable profit. For analysis, regression analysis was conducted by separating the companies listed on the KOSPI stock market and those listed on the KOSDAQ stock market. The results of the analysis were as follows. In the case of listed companies in the KOSPI stock market, goodwill was found to have a positive (+) stock price relationship as useful accounting information. These results suggested that goodwill is an asset that represents the ability to generate excess profit as a sustainable profit. The contributions of this study are as follows. First, this study verified that goodwill is related to stock prices even after the adoption of International Financial Reporting Standards (IFRSs). Second, it will be possible to induce rational decision-making regarding goodwill to accounting standards setters, supervisors, and users of financial information. Third, it recognized that the value of the financial market can be recognized only by providing reliable accounting information to the managers who prepare financial statements. This can lead managers to provide capital markets with more useful information. Full article
(This article belongs to the Special Issue Company Assessment: Basis of Its Sustainable Development)
Article
Business Failure Prediction for Slovak Small and Medium-Sized Companies
Sustainability 2020, 12(11), 4572; https://doi.org/10.3390/su12114572 - 03 Jun 2020
Cited by 25 | Viewed by 1818
Abstract
Prediction of the financial difficulties of companies has been dealt with over the last years by scientists and economists worldwide. Several prediction models mostly focused on a particular sector of the national economy, have been created also in Slovakia. The main purpose of [...] Read more.
Prediction of the financial difficulties of companies has been dealt with over the last years by scientists and economists worldwide. Several prediction models mostly focused on a particular sector of the national economy, have been created also in Slovakia. The main purpose of this paper is to create new prediction models for small and medium-sized companies in Slovakia, based on real data from the Amadeus database from the years 2016–2018. We created prediction models of financial difficulties of companies for 1 year in advance and also a model for 2 years prediction. These models are based on the combination of two methods, discriminant analysis and logistic regression that belong, among others, to the group of the most commonly used methods to derive prediction models of financial difficulties of the companies. The overall prediction powers of the combined model are 90.6%, 93.8% and 90.4%. The results of this analysis can be used for early prediction of the financial difficulties of the company, that could be very useful for all the stakeholders. Full article
(This article belongs to the Special Issue Company Assessment: Basis of Its Sustainable Development)
Article
Predicting Financial Distress of Slovak Enterprises: Comparison of Selected Traditional and Learning Algorithms Methods
Sustainability 2020, 12(10), 3954; https://doi.org/10.3390/su12103954 - 12 May 2020
Cited by 15 | Viewed by 1784
Abstract
Predicting the risk of financial distress of enterprises is an inseparable part of financial-economic analysis, helping investors and creditors reveal the performance stability of any enterprise. The acceptance of national conditions, proper use of financial predictors and statistical methods enable achieving relevant results [...] Read more.
Predicting the risk of financial distress of enterprises is an inseparable part of financial-economic analysis, helping investors and creditors reveal the performance stability of any enterprise. The acceptance of national conditions, proper use of financial predictors and statistical methods enable achieving relevant results and predicting the future development of enterprises as accurately as possible. The aim of the paper is to compare models developed by using three different methods (logistic regression, random forest and neural network models) in order to identify a model with the highest predictive accuracy of financial distress when it comes to industrial enterprises operating in the specific Slovak environment. The results indicate that all models demonstrated high discrimination accuracy and similar performance; neural network models yielded better results measured by all performance characteristics. The outputs of the comparison may contribute to the development of a reputable prediction model for industrial enterprises, which has not been developed yet in the country, which is one of the world’s largest car producers. Full article
(This article belongs to the Special Issue Company Assessment: Basis of Its Sustainable Development)
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