DBPapers
DOI: 10.5593/sgem2012/s03.v1024

FINANCIAL OPTIONS FOR PRODUCTION EQUIPMENT INVESTMENTS IN THE CZECH REPUBLIC

L. KUCEROVA
Wednesday 1 August 2012 by Libadmin2012

References: 12th International Multidisciplinary Scientific GeoConference, www.sgem.org, SGEM2012 Conference Proceedings/ ISSN 1314-2704, June 17-23, 2012, Vol. 1, 585 - 592 pp

ABSTRACT

Currently, when global market conditions and competitive structures constantly change,
it is not easy for any company to keep pace with ever rising demands. It is of vital
importance to provide for company continuous financial analyses to identify factors of
market fluctuations or even threats of possible market exclusion. From the point of view
of economic theory, as well as its practical applications, it is necessary to coordinate
collection, allocation and efficient exploitation of production factors due to their
limitations. In fact this trend is the raison d’être of economic behaviour. Limited
resources make their efficient utilisation necessary. The optimum decision-making of
company managers is a must.
The decision on financial resources and their optimum utilization is a prerequisite for
functioning off any business or economy. The modern theory and practice of financial
management cannot do without mathematical, statistical and econometric tools. To be
able to provide for efficient decisions, managers need economic theory and methods of
economic analyses. Modelling serves the purpose of understanding complex phenomena
of actual existence. These phenomena are often so complicated that modelling
represents the only way, how their behaviour can be studied. The current econometrics
would be impracticable without application of mathematics and statistics. The
quantitative analyses attest or refute the hypotheses as outcome of qualitative reasoning.
If a quantitative analysis is acceptable, it can be utilized for the development of variance
scenarios, and qualified prognosis formulation.
The issue of optimal financing is a topical theme of frequent debate concerning
financial theory and practice of industrial enterprises in this country. The principal
reason for choosing just this subject is the fact that presently there exists no
comprehensive review of ways of financing technical equipment of production,
inclusive provision suitable optimum modelling that could direct to optimum mode of
financing such equipment. Both an appropriate theory and practical model is lacking.
The paper’s objective is to assess the status quo of investment financing in the Czech
Republic, as well as abroad and subsequently provide for a mathematical (abstract)
model, which would enable optimizing payments of technical equipment costs.

Keywords: Costs, Optimizing, Financing, Modelling, Finance Resources