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ACC JOURNAL 2022, Volume 28, Issue 2 DOI: 10.15240/ ul/004/2022-2-006
BALANCE SHEET RULES AND THEIR INFLUENCE ON BUSINESS PERFORMANCE –
AN EMPIRICAL STUDY
Ma a Nosko á1; Pe a Taušl P ocházko á2; E a Jelínko á3
Uni e si y o Wes Bohemia, Facul y o Economics,
Depa men o Business Adminis a ion and Managemen ,
Uni e zi ní 22, 306 14 Plzeň, Czech Republic
e-mail: 1[email p o ec ed]; 2pp [email protected]; 3[email p o ec ed]
Abs ac
The s udy aims o examine in de ail he impac o compliance wi h balance shee ules on
business pe o mance. To examine his p emise, da a om small and mic o businesses in he
Czech Republic ( o al numbe 2,537) we e s a is ically es ed using - es and Mann-Whi ney
U es . Pa icula a en ion was paid o he alue o he e u n on equi y indica o (as
a business pe o mance indica o ), and he changes in his alue be ween he business g oups
ha comply and hose ha do no comply wi h hese ules. The esul s sugges ha he
posi i e e ec o balance shee ule compliance on business pe o mance canno be
con i med, no he p edominan compliance among businesses was p o en. Thus, he
discussion o whe he he balance shee ules need egula ly appea in he cu en business
economics li e a u e should be open. The esul s a e p esen ed and discussed in his pape ,
oge he wi h hei limi a ions.
Keywo ds
Balance shee ules; Business pe o mance; Business pe o mance measu emen ; Impac .
In oduc ion
Balance shee ules a e unde s ood as a well-known pa o he business economy heo y.
They p esen ecommenda ions on how o manage balance and s abili y in inancing. Such
ecommenda ions a e s ill common in Ge man-speaking coun ies, as well as in he Czech
Republic o Slo akia. By ollowing hese ules, businesses should achie e long- e m inancial
s abili y due o he speci ic s uc u e o asse s and liabili ies. Balance shee ules a e
commonly unde s ood as one o he ools o inancial analysis. Financial analysis is
conduc ed mainly o ob ain in o ma ion abou a company’s inancial managemen and, hus,
o suppo he s abiliza ion o he company’s inancial heal h. Financial analysis esul s can
in luence companies’ inancial s a egies and, hus, hei business compe i i eness. Despi e i s
impo ance, limi ed a en ion is paid o he compliance o business shee ules wi hin
companies’ inancial s a egies. As López Salaza e al. [1] a gue, inancial analysis and i s
pa s ep esen basic ea u es ha suppo company s a egy. Howe e , hey poin ou ha
li le a en ion has been paid o mic o and small companies. They a gue ha mic o and small
businesses use a limi ed scope o inancial in o ma ion o make decisions, and he p io i y is
o en gi en o ope a ing ac i i ies, no o de eloping inancial plans. None heless, he
impo ance o inancial decisions is clea , and i s managemen con ibu es o he ailu e o
g ow h o a company.
The concep o balance shee ules o igina es om Ge man-speaking coun ies [2], [3], [4],
[5] and is ela ed o s eams in he business economy known as ‘Be iebswi scha sleh e’. As
such, logically, hese ecommenda ions a e s ill e y common in he business economy and
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managemen heo y in Cen al and Eas e n Eu ope (e.g., Ge many, Czech Republic, and
Slo akia). Howe e , how upda ed he balance shee ules in he cu en business economy and
managemen a e and whe he i is possible o p o ide empi ical e idence o hei ela ion o
business pe o mance managemen emain unanswe ed. To suppo his esea ch opic, only
wo pape s (in English wi h no imespan limi a ion) ha ocus on balance shee ule(s) we e
ound in he esea ch da abase Web o Science [6], [7] and one pape (same sea ching c i e ia)
was ound in da abase Scopus [8]. The lack o a ailable esea ch pape s could be conside ed
as a limi a ion o ou esea ch in e es . On he o he hand, his ac suppo s ou assump ion
ha he ela ion be ween business pe o mance managemen and balance shee ules app oach
should be a opic o esea ch in e es .
The emainde o his pape is o ganized as ollows. The i s sec ion p o ides a heo e ical
backg ound on he issue o each balance shee ule, as well as business pe o mance. This
sec ion aims o ocus on he insu icien ly co e ed esea ch a ea o balance shee ules o
jus i y he ollowing empi ical esea ch and o mula e he esea ch ques ion. The nex sec ion
desc ibes he me hodological app oach ha was used, ollowed by he empi ical sec ion, in
which da a on mic o and small businesses a e s a is ically es ed o answe he gi en esea ch
ques ion. Then he esul s and limi a ions a e discussed in ela ion o he p esen ed da a.
1 Theo e ical Backg ound
As men ioned abo e, balance shee ules a e conside ed a guide o he gene al inancing o
businesses, and hei applica ion allows he main enance o inancial s abili y [9]. They
p o ide a guideline o businesses o emain inancially heal hy o long- e m pe iods, secu ed
in e ms o liquidi y, and hus p o i able. To achie e hese aims, balance shee ules
ecommend main aining an app op ia e le el o inancial indica o s in he inancial and
capi al s uc u es o businesses.
While se e al balance shee ules exis , his s udy ocuses on he h ee mos -men ioned ules
in he li e a u e (e.g. [10], [11], [12]): he golden balance shee ule, isk equaliza ion ule, and
pa i ule. In addi ion, we conside hese h ee ules as he ones ha a e mos connec ed wi h
business pe o mance, which is discussed in he ex below.
1.1 Balance Shee Rules
The golden balance shee ule (1R) is conside ed one o he bes -known ules (e.g. [13], [12]),
and i ep esen s a basic ecommenda ion o inancial and capi al s uc u es. Essen ially, he
golden balance shee ule is based on he uni ica ion o ma u i y da es in inancing; hus, he
inancing pe iod is coo dina ed acco ding o he capi al commi men pe iod [14]. Acco ding
o his ule, ixed asse s and a pa o he cu en asse s should be inanced using in e nal
capi al (equi y) and long- e m deb s, cu en asse s, subsequen ly, om sho - e m
deb s/liabili ies. In o he wo ds, long- e m asse s should be inanced using a balanced a io o
equi y and long- e m deb . Sho - e m asse s should be inanced, acco ding o his ule, using
he sho - e m a ailable capi al [15], [16]. The consis ency in he asse s and liabili ies´ side o
he balance shee is an essen ial pa ame e o he assessmen o business c edi wo hiness and
a ing; hence, i is an impo an pa o he s a egic inancial planning o businesses.
The golden balance shee ule p ima ily assesses ma u i y da es, bu no he ype o inancing:
equi y o deb [16]. Ha ing 100%, o sligh ly highe , long- e m passi es (equi y and long-
e m deb s) and ixed asse s sha es is conside ed he op imal si ua ion. In he li e a u e, his
indica o is known as he deg ee o capi aliza ion; in Ge man, i is known as
Anlagedeckungs ad II [15], [17], [10]. The exis ing li e a u e (e.g. [12]) s a ed ha he
op imal capi aliza ion deg ee le el is 1.0. As such, by eaching his op imal le el, he ne
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wo king capi al is ze o. This ule can also be measu ed using he ne wo king capi al o
wo king capi al a io [18].
Based on he le el o he golden balance shee ule compliance, h ee app oaches o inancing
a company a e iden i ied: conse a i e, agg essi e, and mode a e. A conse a i e app oach o
inancing en ails using long- e m capi al o inance no only long- e m asse s bu also sho -
e m asse s, which means ha companies end o use mos ly long- e m inance sou ces o
inance hei daily ope a ions. On he o he hand, an agg essi e me hod o inancing en ails
using sho - e m sou ces o inancing o bo h sho - e m and long- e m asse s. This may lead
o illiquidi y. A mode a e app oach lies in he middle be ween agg essi e and conse a i e
app oaches, wi h he sugges ion ha sho - e m inance sou ces should be used o inance
luc ua ing cu en asse s. Likewise, long- e m inance sou ces should be used o inance
pe manen cu en asse s [19], [20], [13].
Fu he , o add ess he ques ion o he ype o inancing, he isk equaliza ion ule (2R) is
used. This ule conside s he isk posi ion o businesses and deals wi h capi al s uc u e and
spli ing o passi es in o equi y and deb /liabili ies [21], [16], [22]. In p inciple, wi h highe
in ol emen o deb , business p o i abili y inc eases. On he o he hand, bank up cy isk also
inc eases. Thus, a highe le el o equi y p o ides business independence and c edi wo hiness
[16]. Fo he s abili y and sus ainabili y o businesses, i is ecommended ha equi y and deb
be spli equally, o wi h a highe p opo ion o equi y [23], [11]. This ecommenda ion leads
o be e c edi wo hiness in companies, while he e ec o inancial le e age is no e ec i e.
O e he decades, changes in he le el o measu ed alues ha e been no ed; cu en ly, he
p opo ion o 1:2 is conside ed be e o i m p o i abili y [24], [25].
The hi d ule is called he pa i ule (3R), and i se es as an addi ional ule o he abo e-
men ioned ules. I is connec ed wi h he bank up cy law and he consequence o co e ing
losses called ‘pa i passu’. The ‘pa i passu’ p o ides he basic p inciple applicable in
bank up cy law. Acco ding o his p inciple, c edi o s who belong o he same g oup,
acco ding o he hie a chy o claims, should be ea ed in he same manne [26]. The pa i ule
is impo an , especially in si ua ions whe e companies apply o addi ional deb inancing.
The pa i ule ecommends ha a company should use as much equi y as i can in es in ixed
asse s, ideally less, o c ea e space o long- e m deb inancing [11]. The company should
main ain he so-called heal hy deb ; meaning, i uses deb capi al o an accep able ex en . I
he company becomes bank up , hen all liabili ies a e sa is ied om he equi y, namely, he
s a e, banks, c edi o s, and subsequen ly, he owne s. This is why inancing by equi y poses a
a g ea e isk o business owne s han ha by deb capi al.
While hese ules a e based on ela i ely old li e a u e [2], [3] and we e no upda ed o
empi ically es ed in he las decades, hey s ill egula ly appea in he cu en li e a u e on
business economics [17], [18], [10], [19], [16], [13], [22]. Fu he , hese a e s ill conside ed
sui able indica o s o business p o i abili y [15] and one o he main p inciples o inancial
managemen in businesses [27]. Pa icula ly, he golden balance shee ule is s ill conside ed
o gua an ee o p e en liquidi y p oblems and paymen di icul ies [16].
As o he cu en empi ical es ing (as well as he cu en heo e ical app oach), only a ew
scien i ic pape s (see In oduc ion) cu en ly deal wi h balance shee ules; hus, a signi ican
esea ch gap was iden i ied. Howe e , o suppo he impo ance o balanced shee ules
compliance, i was decided o ocus u he on esea ch in a eas ha a e ela ed o indi idual
ules.
Rega ding he i s golden balanced ule, he e a e cu en ly many pape s ela ed o he
esea ch on business inancial s uc u e and he op imal le el o ne wo king capi al in ela ion
o co po a e p o i abili y [28], [29], [30], [31], [32]. Pa icula ly, ega ding he opic o ne
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wo king capi al, managing i and a aining i s op imal le el in ela ion o i m p o i abili y has
become a popula esea ch subjec in ecen yea s [33], [34], [35], [36], [37] [38], [39].
Deloo [37] and Howo h and Wes head [39] s a ed ha he op imal le el o wo king capi al
maximizes business alue and signi ican ly imp o es co po a e p o i abili y. Jacko á [30]
s a es ha inancial s uc u e, as well as i s op imal le el, is in ol ed in achie ing s abili y,
p ospe i y, and o e all e iciency o companies. Ha ing a wo king managemen eam plays a
signi ican ole in he o e all co po a e s a egy o maximizing i m alue and p o i abili y
[28], [29], [32], and i is conside ed a key pa o he o e all business s a egy o c ea e
sha eholde alue. The op imal a io be ween cu en asse s and deb s, which is an impo an
pa o he inancial planning o up- o-da e businesses [33], [40], indica es he exis ence o an
op imal le el o wo king capi al which imp o es business pe o mance.
The indings by Baños-Caballe o e al. [34], [35] p o ed ha an op imal le el o wo king
capi al in es men s, which maximizes business alue and p o i abili y, exis s. Non-
compliance wi h his op imal le el has a nega i e e ec on alue c ea ion and causes a
dec ease in p o i abili y. Fi m manage s should aim o main ain he op imal le el as much as
possible and a oid any de ia ions om i ha could des oy i m alue. The au ho s ind an
in e ed U-shaped ela ionship be ween wo king capi al and i m pe o mance, which implies
ha an op imal le el o in es men in wo king capi al balances he cos s and bene i s o
in es men s in wo king capi al and leads o he maximiza ion o i m alue.
Ak as e al. [33] excluded he possibili y ha be e pe o mance is d i en by inc easing i m
isk, ollowing he adop ion o he agg essi e wo king capi al policy. This inding is also
suppo ed by Nazi and A za [41], who ound a nega i e ela ionship be ween he
agg essi eness o wo king capi al policies and p o i abili y. O e all, hese s udies ind ha he
alue o wo king capi al and, hus, compliance wi h he golden balance shee ule (1R) should
ha e a posi i e impac on business pe o mance.
In addi ion, he opic o op imal capi al s uc u e and i s posi i e impac on company
pe o mance is no new in he scien i ic li e a u e. D oule ý and Blažko á [42] p o ed ha
highe use o deb s in he capi al s uc u e lowe s a i m’s p oduc i i y (measu ed by he o al
ac o p oduc i i y [TFP] indica o ) as well as i s nega i e equi y. Spi sin e al. [31]
demons a ed ha e ec i e managemen o capi al s uc u e could inc ease he p o i abili y o
companies by 16–22%. Thei esul s indica e ha a U-shaped ela ionship exis s be ween
company pe o mance and capi al s uc u e, wi h an op imal le el o bo owed capi al in
p opo ion o o al asse s/liabili ies. In addi ion, Azhagaiah and Ga ou y [43] p o e ha
capi al s uc u e has a signi ican in luence on companies’ p o i abili y.
Main aining inancial and capi al s uc u e is impo an , especially o small companies,
because hey a e gene ally associa ed wi h a highe p opo ion o cu en asse s (in
compa ison o la ge i ms), less liquidi y, ola ile cash lows, and a eliance on sho - e m
deb [39], [44]. I is also ecommended ha smalle i ms should adop o mal wo king capi al
managemen ou ines o educe he p obabili y o business closu e, as well as o enhance
business pe o mance.
O e all, hese s udies ind ha he capi al s uc u e and, hus, he compliance o he isk
equaliza ion ule (2R) and he pa i ule (3R) (which ep esen s he combina ion o 1R and 2R)
should ha e a posi i e impac on business pe o mance.
1.2 Business Pe o mance and i s Measu emen
I can be logically assumed ha company manage s can in luence hei company’s
pe o mance h ough hei own decisions. The b oad pe o mance managemen opic deals
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wi h his issue. As Cokins [45, p. 75] s a es, ‘pe o mance managemen is no a p ocess; a he
i is he in eg a ion o mul iple me hodologies, such as cus ome ela ionship managemen ,
s a egy maps, balanced sco eca ds, and lean/Six Sigma quali y managemen ’. Clea ly,
whe he pe o mance managemen consis s o hese di e en me hods canno be easily
measu ed; he e o e, i is measu ed using many me hods, which mos ly depend on he speci ic
needs o indi idual businesses.
T adi ionally, indica o s such as e ec i eness (ac ual ou pu / expec ed ou pu ), e iciency
( esou ces expec ed o be consumed / esou ces ac ually consumed), and p oduc i i y
(ou pu / inpu ) a e used o business pe o mance measu emen [46].
His o ically, inancial indica o s ha e been p edominan , which led Kaplan and No on [47] o
p opose a balanced sco eca d me hodology. In business pe o mance li e a u e, his
p edominance is s ill alid, which was con i med using a sys ema ic e iew o he esea ch on
amily business pe o mance by Williams [48], who ound ha 84% o he examined esea ch
used inancial da a only o measu e pe o mance. The o m o indica o s di e s; some s udies
use he absolu e o m, such as Sales, Income, Tu no e , Cos s, P o i , Asse s, Fixed Capi al,
and In es men s, among o he s. (e.g. [49], [50], [51]). O he s use ela i e o ms, such as
Re u n on Asse s (ROA), Re u n on Equi y (ROE), Re u n on Sales (ROS) [52], [53], [54] o
ma ke -based o ms, such as Tobin’s Q o QRATIO [55], [56]. This is also con i med by
Williams [48] (2018), who s a es ha he se en indica o s mos equen ly used in business
pe o mance s udies ( om s udies on amily businesses published in pee - e iewed jou nals,
om 1980 h ough 2015) a e ROA, Sales, P o i , Tobins’Q, ROE, Re u n on In es men
(ROI), and ROS.
In his s udy, business pe o mance is measu ed using ROE as he a io o he en e p ise’s ne
p o i o capi al in es ed by he owne .
𝑅𝑂𝐸 = 𝐸𝐵𝑇
𝐸𝑞𝑢𝑖𝑡𝑦 (1)
This is because, al hough he business’s abili y o app ecia e he capi al o owne s is e y
impo an in businesses, in small and mic o businesses, i is essen ial because, e y o en,
owne s also manage hei businesses. Thus, hey can indi ec ly in luence he alue o his
indica o wi h hei own decisions. P elimina y esea ch was also conduc ed, and o he
indica o s such as ROA, ROS, and IN99 we e used; howe e , he s udy esul s a e simila .
1.3 Resea ch Objec i e
Findings om he abo e-men ioned li e a u e e iew suppo he heo y o balance shee ules
and an op imal le el o deb , liabili ies, and capi al s uc u e. A his op imal le el, a balance
is achie ed be ween isk and e iciency in businesses. In he li e a u e e iew, many a icles
ha e deal wi h he opic o ne wo king capi al and capi al s uc u e sepa a ely, bu no s udy
connec s hese wo inancial managemen opics o a emp s o examine hei impac on
business pe o mance.
In esponse o he posi i e e ec s on business pe o mance, balance shee ules heo y, as well
as he empi ical p oo ha an op imal le el o ne wo king capi al and op imal capi al
s uc u e exis , i aises he ques ion o whe he compliance wi h he balance shee ules can
posi i ely a ec business pe o mance.
Thus, his s udy ocuses on conduc ing in es iga ions o ob ain such empi ical e idence.
Using empi ical da a, his s udy aims o explo e he possible e ec o compliance wi h he
balance shee ules on business pe o mance o mic o and small businesses in he Czech

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Republic. By conduc ing empi ical esea ch, his s udy’s main bene i is ha i examines
whe he he op imal le el s a ed by each balance shee ule has some jus i ica ion in business
eali y.
Based on he heo y p esen ed in he p e ious sec ions, he ollowing esea ch ques ion was
o mula ed:
Q: Does compliance wi h he balance shee ules posi i ely a ec business pe o mance o
mic o and small en e p ises?
One o he assump ions made in his s udy is ha inancial s abili y should logically lead o
highe business pe o mance; hus, we do no conside any signi ican di e ence be ween
long- e m inancial balance/s abili y and business pe o mance.
2 Resea ch Me hodology
2.1 S a is ical Me hods o Resea ch
P o ing he ela ionship be ween selec ed ac o s and business pe o mance is a e y di icul
ask, which is limi ed by he exis ing me hods. La gely, hese ypes o s udies aim o p o e he
co ela ion be ween di e en quan i ies. Howe e , esea che s mus conside ha he p o en
co ela ion does no au oma ically imply causa ion.
The indica o s de i ed om indi idual balanced ules a e shown in Tab. 1.
Tab. 1: Indica o s de eloped o assess he abili y o businesses o ollow he balance shee
ules
Rule
Indica o
Recommended alue
1R
(equi y + long e m deb ) / ixed asse s
0.8-1.2
2R
equi y / o al liabili ies
0.4-0.6
3R
ixed asse s / equi y
>1
Sou ce: Own
F om he na u e o he compiled indica o s, ( ega ding balanced ules) i is ob ious ha he
co ela ion analysis canno be p ocessed because i s esul s would no be meaning ul. This is
because he ‘bes alues’ a e no he highes o he lowes , bu hose alling wi hin a ce ain
ange. Thus, he au ho s decided o di ide all he companies in o di e en ca ego ies,
depending on how success ul hey we e a complying wi h he balanced ules. These
ca ego ies a e as ollows.
Ca ego y A: En e p ises ha comply wi h all h ee ules
Ca ego y B: En e p ises ha comply wi h a leas 2 ules
Ca ego y C: En e p ises ha comply wi h a leas 1 ule
Ca ego y D: En e p ises ha comply wi h jus 1 ule
Fi s , basic desc ip i e s a is ics (min, max, median, and a e age) we e calcula ed. Da a we e
es ed o no mali y using he Shapi o-Wilk es , which showed ha he da a we e no
no mally dis ibu ed. Howe e , pa ame ic s a is ics could be used because he sample size is
la ge enough no o dis o he esul s [57].
As such, o answe he esea ch ques ion, each ca ego y was analyzed using - es s (unpai ed
wo-sample - es s) oge he wi h desc ip i e s a is ics.
T- es s should e eal whe he he di e ences be ween he ROE alues o wo g oups o
en e p ises ( ha comply and do no comply wi h he ules) wi hin each ca ego y a e
signi ican . Howe e , he da a did no ul ill he assump ion o homogenei y o a iance; hus,
77
he esul s could be dis o ed. The e o e, he non-pa ame ic equi alen o he - es (Mann-
Whi ney U es ) was used as well. All calcula ions we e conduc ed using he p og am
STATISTICA 12 S a So CR, s. . o.
2.2 Da a
To examine he ela ionship be ween balance shee ules compliance and business
pe o mance, he da ase o his s udy is based on 2,537 businesses. All da a we e collec ed
om he Da abase Albe ina – Gold edi ion (Bisnode, 2018). The o iginal aim was o examine
he en i e da ase o mic o and small businesses in he Czech Republic (middle and la ge
businesses we e excluded because o hei highe p obabili y o cash pool inancing, which
would dis o he esul s). Un o una ely, he e we e app oxima ely 10,000 such business
en i ies in he Czech Republic, which could no be analyzed due o echnical issues. Thus,
only one egion ( he Pilsen egion) was selec ed and es ed o answe he esea ch ques ion.
The esul ing 2,537 en i ies ep esen he whole popula ion o mic o and small businesses in
he Pilsen egion; howe e , in his s udy, hey a e conside ed a andom selec ion o he en i e
popula ion o mic o and small businesses in he Czech Republic.
F om he o iginal da ase o 2,537 businesses da a o app oxima ely 100 businesses we e
dele ed because o e o alues o ROE. Fu he , he da a o 745 businesses, whose ixed
asse s had a alue o 0, we e also dele ed (as his made i impossible o calcula e he i s and
hi d indica o s o he balance shee ules). In addi ion, 10 businesses we e excluded because
o hei ex eme ROE alues (abo e 1,000% and less han 1,000%). Finally, 1,682 en e p ises
we e included in he analysis.
3 Resea ch Resul s
Tab. 2 shows he desc ip i e s a is ics o he ROE and ule indica o s, as well as hei
ecommended alues (median and a e age can p o ide in e es ing in o ma ion when
compa ed o ecommended alues).
Tab. 2: Desc ip i e s a is ics (n = 1,682, small and mic o businesses in he Pilsen egion,
2018)
Max
Min
Median
A e age
Recommended
ROE
776.470
–781.400
18.325
29.449
1R
41,737.000
0.008
2.156
38.041
0.8-1.2
2R
1.321
0.002
0.534
0.526
0.4-0.6
3R
126.976
0.000
0.555
1.793
>1
Sou ce: Own p ocessing o [58]
Howe e , om his able, i is no possible o assess how businesses success ully comply wi h
hese ules, and simple da a il e ing had o be done. The esul s o each ca ego y a e as
ollows:
Ca ego y A: 53 businesses comply wi h all h ee ules (1,629 do no ).
Ca ego y B: 274 businesses comply wi h a leas wo ules (1,435 do no ).
Ca ego y C: 832 businesses comply wi h a leas one ule (850 do no ).
Ca ego y D: 249 businesses comply wi h he i s ule, 336 comply wi h he second ule, and
546 comply wi h he hi d ule.
I is ob ious ha mos businesses do no success ully comply wi h he ules. Only
53 companies (ou o 1,682) comply wi h all h ee ules, and less han hal comply wi h a
leas one. Mo e de ailed esul s a e p esen ed in Tab. 3, which shows addi ional desc ip i e
78
s a is ics o he ROE alues o he g oups o businesses, acco ding o hei abili y o comply
wi h he ules.
Tab. 3: Desc ip i e s a is ics o ROE di ided in o ca ego ies A, B, and C (n = 1,682, small
and mic o-businesses in he Pilsen egion, 2018)
A
B
C
Comply
Do no
comply
Comply
Do no
comply
Comply
Do no
comply
Numbe
53
1629
247
1435
832
850
ROE
A e age
14.75
29.93
18.06
31.40
31.49
27.45
Median
7.58
18.66
15.70
18.66
20.35
17.12
Min
–25.99
–781.40
–507.56
–781.40
–781.40
–202.94
Max
72.29
776.47
355.00
776.47
776.47
478.65
Sou ce: Own p ocessing o [58]
In Tab. 3 he highe median and a e age ROE alues (wi hin each g oup) a e ma ked in bold.
Con a y o he expec ed esul s, in wo cases, ROE is highe in he g oup o businesses ha
do no comply wi h he ules. Al hough his low alue o ROE could be a ibu ed o he e y
low numbe o cases (and hei s a is ical insigni icance), i he ules could posi i ely a ec
business pe o mance, he ROE alues would be much highe in his g oup and no he
opposi e. Only he hi d g oup (C: businesses ha comply wi h a leas one ule) had highe
a e age and median ROE alues in he g oup ha complied. Thus, his could indica e he
possible in luence o balance shee ules on business pe o mance. To answe he esea ch
ques ion, u he calcula ions we e pe o med.
Addi ionally, i is in e es ing o examine which ule is he mos o en ollowed. Ou o 1,682
businesses, 32% (546 in o al) comply wi h he hi d ule. The mos impo an ule, he golden
ule, is ollowed in he leas cases (only 15 % o all businesses). In Tab. 4, desc ip i e
s a is ics o ROE o businesses ha comply wi h indi idual ules (Ca ego y D) a e shown.
The la ges ROE, in e ms o median and a e age, was ound in businesses ha comply wi h
he hi d ule.
Tab. 4: Desc ip i e s a is ics o ROE o businesses ha comply wi h he ules (Ca ego y D),
acco ding o ecommended alues o 1R, 2R, and 3R (n = 1,682, small and mic o
businesses in Pilsen egion, 2018)
Comply
1R
2R
3R
Numbe
249
336
546
ROE
A e age
17.60
29.24
31.59
Median
13.85
18.02
21.53
Min
–507.56
–88.00
–781.40
Max
355.00
706.93
776.47
Sou ce: Own p ocessing o [58]
Subsequen ly, a - es was pe o med, and he esul s a e p esen ed in Tab. 5 (g oup o
businesses ha ollow he ules is ma ked as F, and he opposi e is ma ked as DF).
Un o una ely, he assump ion o homogenei y o a iance was no me (see he igh pa o
Tab. 5); hus, he assump ions o his s a is ical es a e iola ed, and i s esul s canno be
used. (I is clea ha he esul s would no suppo he possible posi i e e ec o balance shee
ules on business.)
79
Tab. 5: T- es esul s (n = 1,682, small and mic o businesses in Pilsen egion, 2018)
Va .
- es
Le ene
Mean
(F)
Mean
(DF)
d. .
p
Valid N
(F)
Valid N
(DF)
Le ene
p
A
14.75
29.93
-1.37
1,680
0.17
53
1,629
5.64
0.02
B
18.06
31.40
-2.44
1,680
0.01
247
1,435
0.85
0.36
C
31.49
27.45
1.04
1,680
0.30
832
850
51.24
0.00
Sou ce: Own p ocessing o [58]
The nex logical s ep was o use he non-pa ame ic equi alen o he unpai ed wo-sample -
es , which is he Mann-Whi ney U es . The esul s a e p esen ed in Tab. 6. Acco ding o he
esul s, he null hypo hesis (‘ he dis ibu ions o bo h popula ions a e equal’) is ejec ed in
g oups A and B (a he signi icance le el α = 0.05), which indica es ha he ROE alues o
hese g oups o businesses di e . This could suppo he p emise o he posi i e e ec o
balance shee ules on business pe o mance; howe e , om Tab. 3, i is clea ha he median
o hese ca ego ies is highe in bo h cases in he g oup o businesses ha do no ollow he
ules. This would indica e opposi e esul s han expec ed. In addi ion, he U es e ealed
equal dis ibu ions o bo h popula ions (F and DF) we e ound in g oup C (p- alue > 0.05),
which can be in e p e ed as ollows: alues o ROE a e no signi ican ly di e en wi hin each
g oup (al hough median alues sugges o he wise, see Tab. 3).
Tab. 6: Mann-Whi ney U es esul s (n=1,682, small and mic o businesses in Pilsen egion,
2018)
Va .
Rank Sum
(F)
Rank Sum
(DF)
U
Z
p- alue
Valid N
(F)
Valid N
(DF)
A
33,975
1,381,428
32,544
-3.053
0.002
53
1,629
B
191,257
1,224,146
160,629
-2.353
0.019
247
1,435
C
711,496
703,907
342,232
1.141
0.254
832
850
Sou ce: Own p ocessing o [58]
Thus, om he p esen ed esul s (especially in Tab. 3 and Tab. 6), i is clea ha he e is no
e idence ha he balance shee ules posi i ely a ec he business pe o mance o mic o and
small businesses. In con as , he esul s ( o ca ego ies A and B) con i m ha he g oup ha
does no ollow he ules has be e pe o mance. In addi ion, when he ules we e examined
in mo e de ail using desc ip i e s a is ics (Tab. 4), i was ound, ha ules a e no mos ly
ollowed. In mos cases (32%), businesses ollow he hi d ule. Ou o hese h ee ules, he
hi d is also he ule which ul illmen is ela ed o he highes a e age alue o ROE. Thus,
based on he esul s o his s udy, pa ly due o he small sha e o he businesses, ha do
ollow he ules, i canno be p o en ha he balance shee ules posi i ely a ec he business
pe o mance o mic o and small businesses, and he esea ch ques ion canno be answe ed
posi i ely.
Conclusion
This s udy ocuses on he p ac ical use ulness o balance shee ules. I aimed o p o e he
posi i e e ec o balanced shee ule compliance on business pe o mance, using empi ical
da a. Real da a o mic o and small businesses om he Pilsen egion in he Czech Republic
( o al numbe 2,537) we e es ed using s a is ical me hods (mainly Mann-Whi ney U es ).
Howe e , his posi i e e ec was no p o en (median and a e age ROE alues o he g oups
o businesses ha comply wi h a leas wo ules we e lowe han hose who do no comply
wi h hem, his di e ence was p o en by Mann-Whi ney U es ), and nei he was he
p edominan compliance among businesses. The esea ch ques ion “Does compliance wi h he