Some delusions in business finance
DOI:
https://doi.org/10.37886/Keywords:
working capital, current ratio, optimal financing structure, capital adequacy of the company, liquidity ratios, cash flowAbstract
Research Question (RQ): What are the fundamental shortcomings of modern corporate finance?
Purpose: The purpose of this paper is to show the weaknesses of the theory of corporate finance,
which affect the practice in enterprises and banks.
Method: Analysis of various theoretical areas of financial management and their critical
assessment.
Results: The study provides an overview of fundamental errors in the analysis and explanations of
some relatively well-known information about the financial position of the company.
Organization: The findings significantly change and improve the content of the information to
decide on the financing of individual companies, thereby contributing to better business decisions.
Society: The findings contribute to a better performance of enterprises and banks to assess the
financial position and creditworthiness of borrowers, thus contributing to greater social
responsibility of business systems.
Originality: The study explains certain financial ratios from new point of view and complements
the modern theory of optimization of corporate financing.
Limitations/Future Research: The study is limited to a theoretical approach and represents a
starting point for further research.
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