Journals UITM University of Information Technology and Management
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FINANCIAL LIQUIDITY AS A FACTOR DETERMINING THE ECONOMIC CONDITION OF COMPANIES ON THE CAPITAL MARKET IN RELATION TO BANKRUPTCY LAW IN POLAND
Get PDFThe aim of this article is to present financial liquidity as a factor affecting the economic condition of the companies on the capital market in relation to the amended Bankruptcy Law in Poland. A study was carried out to determine the impact of liquidity on the increase in earnings per share and return on assets, indicators can be used to assess the economic condition of a company. As a result, logit and quadratic functions were examined and the parameters of the models provided a verification of the hypothesis. As a result, it was found that the good economic situation of a company related to the increase in earnings per share and profitability is affected by the increasing cash efficiency of assets and the decreasing value of the current ratio. It can therefore be concluded that according to theory, conducting a more aggressive policy in the area of liquidity results in an increase in the value of an economic entity and, therefore, its good economic condition, but the effect of overly aggressive policies may influence solvency, which is defined by Bankruptcy Law. 
THE MYTH OF AUSTERITY. EMPIRICAL EVIDENCE FROM THE EUROZONE COUNTRIES
Get PDFThe paper discusses the impact of austerity policy on economic performance in the eurozone countries after the global crisis that occurred in 2007-08. The undertaken fiscal consolidation efforts to cut government expenditure and increase government taxes which begun in 2010, aimed to return sustainability in public finance as the rapid growth in sovereign debt was observed in many economies, especially in the South Europe. The implemented austerity policy under the external pressure not only amplified recession but also caused the further deterioration of public finance characterized by large deficits and increasing public debt. Based on the literature and empirical findings, the issue of austerity policy and its potential consequences on growth is examined. The research aim is to explore both advantages and disadvantages of austerity, focusing on the macroeconomic conditions which accompanied it and the impact of such policy on economic growth in the eurozone countries. The hypothesis of the negative influence of austerity on economic performance is verified on the basis of recent economic literature and conducted empirical research. Both descriptive analysis and dynamic panel regression based on two-step Generalized Method of Moments was used. Data from 2010-17 for the eurozone countries served to prove the existence of a key negative relationship between austerity policy and economic growth in economies that experienced deep great recession. The conducted analysis confirmed that austerity initiated to reduce the public debt to GDP doesn’t contribute to macroeconomic stabilization, adversely affecting potential output. Contrary to widely held opinion, this allows us to claim that austerity is not a good remedy for economies suffering from recession. 
THE COST OF EQUITY CAPITAL IN STOCK PORTFOLIOS LISTED ON THE WARSAW STOCK EXCHANGE USING THE CLASSIC CAPM
Get PDFThis work is an attempt to estimate the cost of equity capital characteristic among portfolios of companies listed on the Warsaw Stock Exchange in the years 1995-2017. To this end, the classic CAPM is used to estimate the cost of risk. Model tests are based on 252 monthly returns. In order to assess the errors of cost of capital estimation, the bootstrap method is used. The estimated cost of capital refers to the project portfolio with real options on these projects. Stock returns are generated not only by the companies implementing projects but also through real options modifying these projects. The estimated cost of capital can be a valuable indicator for portfolio managers. Also, it can be an approximate indicator for making decisions on the implementation of new investment projects. The estimated cost of capital assumes the highest values for value portfolios. The estimated cost of capital assumes the small values for growth portfolios
INTERNAL AUDIT TOOL FOR MINIMIZING THE RISK OF FRAUD
Get PDFThe purpose of the article is to analyze the relevance of the audit in minimizing the risk of fraud. The methodology of the research: literature analysis, internal audit research and questionnaires for the selected group of companies were carried out for the purpose of the article. The result: internal audit of micro-enterprises is implemented sporadically, so it is difficult to talk about its effectiveness, while in other entities it fulfills its role, provided it is properly carried out, which means while maintaining its independence and impartiality
OPENESS AND TRANSPARENCY OF FISCAL REPORTING IN POLAND – ASSESSMENT AND RECOMMENDATION
Get PDFThe aim of the paper is to answer the question of whether fiscal reporting (more precisely, financial reporting of public finance sector entities (PFSE)) earnestly expressed the results of activities (information included is reliable, understandable and complete), and provide suggestions on how to increase openness and transparency in that field. First of all, the essence of openness and transparency of public finance is described. Then the international institutions involved in preparing and promoting international fiscal transparency standards and guidelines are indicated. Next are noted the most important reasonsfor limited openness and transparency of financial reporting of PFSE. In the end, actions are recommended to increase openness and transparency. Results are presented of theoretical studies on the basis of related literature, the reports by the Supreme Audit Office in Poland and the authors` own experience connected with preparing formal opinion for two houses of Polish Parliament. Simple research methods are used such as descriptive analysis and also inferential and inductive thinking. 
COMPARISON OF RISK INDEX ESTIMATING METHODS ON THE POLISH FINANCIAL MARKET
Get PDFThe purpose of this paper is to determine a practical approach of calculation of the systematic risk of companies in line with the CAPM model. By performing an analysis of the methodology used in practice of determining the beta and review of the literature on the subject the accounting rules that make the best possible impact on the change in the level of risk index are determined. In this work on the Polish financial market are also carried out simulations showing the impact of the change in assumptions on the final amount of beta. Based on the empirical results there is a recommendation formulated asto what method should determine beta for public companies using the CAPM model. These boundary conditions are also possible implementations of the proposed approach and possible desirable solutions, if minimum boundary conditions are not met. The defined scope for the use of the recommended method of calculating the risk index allows usto reduce the error probability of over-or underestimation of the value of the index. 
TRADE CREDIT: A BENEFIT TO GET, A “MUST” TO GIVE? MOTIVES BEHIND TRADE CREDIT USE IN POLAND
Get PDFThe paper analyses the motives behind trade use credit in the Polish enterprise sector, based on the results of the 2016 NBP Annual Survey. It verifies the conclusions stemming from trade credit theories regarding both the main motives driving supply and demand for trade credit, as well as explaining the variation in their relevance across companies. The analysis shows that trade credit supply in Poland is driven to a large extent by suppliers’ desire to win and maintain their customers: allowing deferred payments creates attractive terms ofsale and is often a requirementset by clients with strong bargaining power. These results indicate high willingness of customers to settle their payments on a deferred basis, which could mirror an important fact uncovered by the survey: contrary to the assumptions made in many theories, trade credit proves to be a relatively cheap form of financing for the majority of the surveyed firms. As a consequence, trade credit could be perceived by firms as an attractive,standard tool used in day-to-day businessrather than an expensive form of financing used only to address specific problems or achieve other benefits that would outweigh its high costs. Survey results provide some confirmation for this explanation of trade credit demand. 
ANALYSIS AND PROFITABILITY ASSESSMENT OF POLISH CONSTRUCTION COMPANIES THREATENED WITH BANKRUPTCY
Get PDFThis paper presents analysis of profitability indicators of Polish construction companies threatened with bankruptcy compared to analogous indicators obtained by Polish construction entities as a whole. The analysis concerns companies generating positive and negative financial results (both EBIT and net financial results). Moreover, the operating profitability ratio, return on sales, and return on total assets ratios have been verified. The analyses have been conducted using financial reports of Polish construction companies which went bankrupt in 2013, as well as financial data of construction sector participants as a whole. 
THRESHOLD THEORY – MODELLING RISK ATTITUDE
Get PDFIn this paper we offer an alternative framework for examining why risk matters in the decisions of economic agents, and how the agent’s risk attitude affects his decisions. This “Threshold Theory” framework is based on a real options approach and the observation that in many situations an agent faces one or more thresholds in the payoff function. These thresholds influence the agent’s risk attitude. The theory’s predictions help to explain many anomalies that the standard expected utility model cannot. Threshold Theory can also model behavior in contexts such as individual investor decisions, corporate governance and other agency problems. Further, we examine CEO decisions as a function of time to the CEO’s retirement to test predictions of the Theory. 
THE ROLE OF LOAN AND GUARANTEE FUNDS IN FILLING THE FUNDING GAP FOR SMALL AND MEDIUM-SIZED ENTERPRISES
Get PDFResearch background. The analysis of the funding gap for SMEs and loan and guarantee funds’ capability to fill this gap has been undertaken to assess the instruments used in Poland which are focused on the development of entrepreneurship. Methodology/methods. The funding gap for small and medium-sized enterprises is measured with the method of unfulfilled demand for funding and unawarded funding. The size of the gap is compared to the potential amount of the guarantees and loans granted by non-bank organisations in Poland dependent on the amount of capital held. Purpose of the article. The purpose of the article is to answer the research question of whether guarantee and loan funds in Poland play a significant role in filling the funding gap for small and medium-sized enterprises Findings & Value added Guarantee and loan funds are not able to fill the equity gap of SMEs in Poland due to low capital resources compared with needs, and an insufficient number of institutions offering non-bank funding. Also, the high risk attributed to loans granted to small and medium- -sized entrepreneurs influences the low degree of utilisation of the capital already held, both by loan and guarantee funds. The unutilised capital is deposited in bank accounts and does not lead to the increase of the multiplier effect. The analysis concerns the specificity of the support system for SMEs in Poland and cannot be generalised to systems in other countries. However, the conclusions from the conducted analysis and the methodology of calculation of the equity gap may serve other researchers as a basis for creating their own theses and research hypotheses.