Abstract
In contemporary business conditions, that is, in a market economy, business success of a company has to be based on a basic economic and business principle of accomplishing the best possible business results with as little investments as possible. Considering that public utilities carry out public interest activities and employ a large number of people in Serbia, a need emerges to analyze their current status. The goal of this business analysis is to find out appropriate ways of improving public utilities business, including the improvement of the entire public utilities sector in Serbia. The subject of this paper is the analysis of indebtedness of public utilities on the territory of the city of Loznica. Special attention is paid to enterprises that have long-term liabilities in their business. The aim of this paper is a realistic presentation of the indebtedness of public utilities whose founder is the City of Loznica. The amount of indebtedness of local companies is compared in relation to the average indebtedness of public companies from the territory of the Republic of Serbia and the Mačva District. The City of Loznica has established five public companies, with three public companies performing communal activities. The paper will use the ratio analysis of financial indicators. The business operations of the utilities in the period from 2017 to 2019 will be analysed. In addition, the aim of this paper is to present alternative sources of financing for public utilities, which companies can use in case of facing financial problems. The research established that public utilities in Loznica do not have high long-term liabilities, but that this is not the case with other public utilities in Serbia.
Highlights
With regard to the significance of the objectives set before public entities and nature of the work they perform it is required to know the organizational structure of the entity, that is, all aspects of good governance and management
A statement is often drawn that public companies represent nowadays a break on further progress of Serbia, that they are prone to producing only losses, making a burden for the state or local self-government budget
In order to know the real state of play in public entities it is necessary to analyze all segments of business operations and functioning of a company in accordance with the fact that only with analytical approach real situation and potential, which public companies in Serbia are disposed of, a conclusion can be reached
Summary
With regard to the significance of the objectives set before public entities and nature of the work they perform it is required to know the organizational structure of the entity, that is, all aspects of good governance and management. With the analysis of all aspects of business operations it is possible to perceive to what extent a company is capable to accomplish defined goals of its existence. Financial analysis represents a financial management tool which covers a company’s financial performance evaluation (Fabozzi & Peterson, 2003). It involves researching past and present financial data in order to evaluate performance and assess future risk and potential (Shim, 2008). Customer and employee satisfaction resemble non-financial indicators, which are not possible to represent using quantitative units of measure. In the basic financial indicators of a company, we can classify indicators of profitability, economy, cost efficiency, indebtedness, and liquidity
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