Abstract
Research Background: The approach is based on theoretical sources and completed studies on business debt, debt level and repayment awareness and how this issue relates to SMEs in the Czech Republic.
 Purpose of the article: The main purpose of this paper is to examine the attitude of SMEs towards the issue of company debt and its position within the economy. This attitude is an inherent part of the company´s risk management.
 Methods: Three researched issues (How strongly is company debt perceived as a financial risk factor; Does the company consider debt to be a serious matter in their business; What measures does the company take to reduce risk) supported by hypotheses, which verified the thesis, were statistically tested.
 Finding & Value added: Practical implications confirm the thesis that there is a belief that SMEs do not consider debt to be a critical factor of business risk and do not associate it directly with the major risk of business failure. SMEs do not view debt negatively and do not directly link debt to the risk of failure. Consequently, companies consider the risk of indebtedness as relatively insignificant. Their approach to indebtedness is therefore generally passive and they also believe that it will not jeopardize their business, and they will always somehow manage to solve it through insurance, risk avoidance and through creation of financial reserves.
Highlights
Debt is a common concept in business
Taking into account the character and objectives of the article, the following research questions have been formed: RQ1: How strongly is company debt perceived as a financial risk for your company?
: − Companies do not perceive their own debt as a strong risk to their business − Companies do not consider general indebtedness to pose a high risk to their business. − Companies do not use financial reserves to reduce risks caused by debt
Summary
Debt is a common concept in business. It should be noted that there are several kinds of debt. From the economic point of view, these are debts of quantified value, expressed in monetary units. The ethical perspective, says something completely different. If a company respects their own CSR (Corporate Social Responsibility), one of the pillars of this theory is the ability to repay debts. Be they selfemployed, a partner, a shareholder or another type of investor, the companys indebtedness is an essential parameter in assessing the condition of the company
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