Abstract
Bosnia and Herzegovina has opted for a market economy, which implies the liberalization of prices and trade, as well as the existence of an applicable legal system, including real rights. In order for a market economy to function, it is necessary to ensure macroeconomic stability and consensus on economic policy. A developed financial sector and the absence of significant barriers to entry and exit strengthen the efficiency of the economy. By analyzing the database of financial statements of state-owned companies in Bosnia and Herzegovina, we conclude that they are mostly in poor financial condition. This paper analyzes the structure of the state-owned enterprise sector, and identifies individual enterprises that affect fiscal and macroeconomic performance. State-owned companies do not contribute enough to the growth and stability of the economy, the financial analysis showed. The framework for the management of state-owned enterprises has also been analyzed and we come to the conclusion that the entity and cantonal governments do not perform their ownership function in accordance with the WB / OECD guidelines. Quality governance reforms in state-owned enterprises are needed to encourage transparency and increase the quality of accountability. Achieving a higher level of quality in the state-owned enterprise sector can achieve an increase in total GDP of 3 percent annually.
Highlights
The economy of Bosnia and Herzegovina consists largely of state-owned enterprises, which have a significant impact on macroeconomic stability, including its fiscal stability, labor market stability and competitiveness[1]
The legal framework of the former Yugoslavia governing state-owned enterprises (SOEs) was modernized during this period, but it is considered that the management and supervision of this sector lacks responsibility
The second set goal is to analyze the financial performance of the overall sector of state-owned enterprises and individual ente-rprises
Summary
The economy of Bosnia and Herzegovina consists largely of state-owned enterprises, which have a significant impact on macroeconomic stability, including its fiscal stability, labor market stability and competitiveness[1]. The analysis showed that state-owned enterprises participate with approximately 11 percent of total employment, but somewhat less participate in value-added (only 10 percent). Financial ratio analysis (profitability, leverage and liquidity) was used to identify individual firms that pose financial risks to governments.financial performance of the overall sector of state-owned enterprises and individual enterprises. The financial ratio analysis shows that over 44,000 people are employed in state-owned enterprises (SOEs) that face high or very high financial risks (6 percent of total employment)“5. This paper determines the impact that the state-owned enterprise sector has on the economy of Bosnia and Herzegovina, such as: sector size, sector structure, financial indicators, labor markets. S aggregate amounts mask performancerelated challenges in individual enterprises, financial ratio analysis will be used in the paper to identify high-risk state-owned enterprises. To assess the risk of state-owned enterprises, the following financial indicators are taken into account: profitability, leverage and liquidity. „The paper analyzes the entity frameworks for the management of state-owned enterprises (SOEs), and considers options for improving the performance of the state-owned enterprises (SOE) sector“8
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