The Effects of Selected Financial Ratios on Net Profit – The Case of Enterprises of V4 Countries

Abstract

The aim of the research was to assess the effects of selected financial ratios (such as Current Ratio, Debt to Assets Ratio and Gross Profit Margin) on Net Profit. The research was conducted among big enterprises operating in the V4 countries (Czechia, Hungary, Poland and Slovak Republic). The research also aimed to compare the economic results of companies before and during Covid-19 (from 2017 to 2021). Based on the best knowledge of the researchers, no previous research had addressed the issue in V4 countries during the pandemic Covid-19. The data of 200 big companies were collected with the help of Orbis database published by Bureau van Dijk. The research was conducted in the middle of April 2023. The last available data were from 2021. The database did not contain the final data from year 2022. Three hypotheses were formulated along with null- and alternative hypotheses. Linear regression was used for testing. According to the results Current Ratio, Debt to Assets Ratio and Gross Profit Margin have no significant impact on Net profit. The research can be treated as a pilot study since more confirmatory examinations are needed.