Assessment of the Regional Current Liquidity in the Construction Industry of the Czech Republic

Abstract

In these times, when the whole world is paralysed by the Covid-19 pandemic crisis, every company needs to maintain its ability to pay its debts. Such solvency represents one of the most important factors of financial health. The authors focused mainly on the research into current liquidity in the construction industry and whether the construction companies use external resources for their cash flows to a reasonable extent. The scientific literature sources use for this purpose the ratio of own and external resources as a 50:50 ratios, a reasonable ratio may also be 40:60 [1]. The authors of the article took into account a 5-year period related to the national statistics given by the Ministry of Industry and Trade within the construction sector [2]. However, since the sum of the national data on current liquidity and use of external resources in the construction sector can be misleading, these indicators were also monitored at the regional level. The Czech Republic has 14 regions, which vary considerably in terms performance [3]. The aim of the article is to show the regional financial situation in the construction industry in relation to the national statistics and establish a ranking of the financial performance of the regions within the construction industry using multi-criteria analysis. The research question was how much the regional statistical outputs differ from the outputs of the national statistics.In these times, when the whole world is paralysed by the Covid-19 pandemic crisis, every company needs to maintain its ability to pay its debts. Such solvency represents one of the most important factors of financial health. The authors focused mainly on the research into current liquidity in the construction industry and whether the construction companies use external resources for their cash flows to a reasonable extent. The scientific literature sources use for this purpose the ratio of own and external resources as a 50:50 ratios, a reasonable ratio may also be 40:60 [1]. The authors of the article took into account a 5-year period related to the national statistics given by the Ministry of Industry and Trade within the construction sector [2]. However, since the sum of the national data on current liquidity and use of external resources in the construction sector can be misleading, these indicators were also monitored at the regional level. The Czech Republic has 14 regions, which vary considerably in terms performance [3]. The aim of the article is to show the regional financial situation in the construction industry in relation to the national statistics and establish a ranking of the financial performance of the regions within the construction industry using multi-criteria analysis. The research question was how much the regional statistical outputs differ from the outputs of the national statistics.