Business Competitiveness, its Financial and Economic Parameters

In the paper the following research problem was solved: Which method for the calculation of competitiveness is able to incorporate all areas of business financial health and performance to the measurement of competitiveness and to measure competitiveness exactly. In line with the research problem, the aim was determined. The aim of the paper was to evaluate business competitiveness. Research sample consisted of businesses operating in Slovak heat industry. It was a test sample of 343 businesses. To quantify the competitiveness of analysed sample of businesses, these competitiveness indicators were applied: Indicator PP1=Fast solvency (Current capital)/(Short-term liabilities); Indicator PP2=Sales/Costs; Indicator PP3=(Gross Income)/(Short-term liabilities). In addition to these measures, we calculated EVA indicator, which represents comprehensive indicator of performance and competitiveness. To compare and identify the match of rankings, Spearman's rank correlation coefficient was applied. The important finding of this paper is that competitiveness of a business is determined by its financial health and performance. This study follows the authors' research, which is focused on the application of methods used to measure business competitiveness. The original approach to the assessment of competitiveness is the application of EVA indicator and confirmation that EVA indicator may be the criterion for evaluating the competitiveness of businesses. This methodology is beneficial when finding ways to improve performance, efficiency as well as competitiveness of a business.