Economic Security of Public Transport Provider in a Three-Dimensional Model

Abstract

Studying economic security of enterprises has important impacts on maintaining economic security of an individual, of a region, and of a nation. Enterprise is economically secure when it maintains its stability in business processes which the enterprise performs daily. Enterprise as a system naturally inclines to losing its stability, and therefore it is important to identify, analyze, and monitor various elements of this complex system. Quantitative measurement of the selected elements should be indicative of negative evolution within the business processes of enterprise. There are many approaches to assessing economic health of enterprise through financial ratios, performance indicators, controlling or auditing. Common approaches, however, serve rather to assess business value, productivity, budget discipline, or legal compliance. In the literature, there is still missing any general approach to assess economic security of enterprise, which would be based on monitoring system deviations from desirable evolution. We suggest a three-dimensional model of the core elements of economic security of enterprise. It is based on the need to monitor performance, costs, and financial ratios of enterprise, and to detect any deviations from the system’s stable evolution. We use the dimensions of public transport providers’ annual reports in combination with Ishikawa diagram methodology. Several non-financial elements form a dimension of current performance monitoring, cost reports items form the second dimension. Finally, financial ratios in the third dimension reflects more global and long-term view on business performance within the general model.