POKORNÁ, Pavla, Jarmila ŠEBESTOVÁ and Šárka ČEMERKOVÁ. Dilemma of Directions for Reinvestment. Forum Scientiae Oeconomia. 2019, vol. 7, No 4, p. 83-99. ISSN 2300-5947. Available from: https://dx.doi.org/10.23762/fso_vol7_no4_6.
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Basic information
Original name Dilemma of Directions for Reinvestment
Authors POKORNÁ, Pavla (203 Czech Republic, guarantor, belonging to the institution), Jarmila ŠEBESTOVÁ (203 Czech Republic) and Šárka ČEMERKOVÁ (203 Czech Republic, belonging to the institution).
Edition Forum Scientiae Oeconomia, 2019, 2300-5947.
Other information
Original language English
Type of outcome Article in a journal
Field of Study 50204 Business and management
Country of publisher Poland
Confidentiality degree is not subject to a state or trade secret
WWW URL
RIV identification code RIV/47813059:19520/19:A0000082
Organization unit School of Business Administration in Karvina
Doi http://dx.doi.org/10.23762/fso_vol7_no4_6
Keywords in English Management; profit; reinvestments;strategy
Tags International impact, Reviewed
Changed by Changed by: doc. Ing. Jarmila Duháček Šebestová, Ph.D., učo 19986. Changed: 26/7/2021 08:12.
Abstract
Successful entrepreneurial activity is mostly connected with added value creation. This activity simply means that each process generates a profit to increase the financial value of the company. The next step, from the financial point of view, is to make decisions on how to properly reinvest the profit gen-erated to positively influence the company in the future. This study investigates the factors that have the potential to affect profit reinvestment decisions based on primary research on 238 business entities in the Czech Republic. Using primary data collection, it was possible to explain the main motives, such as payback period or extra benefit from reinvestment, as the most significant factor influencing reinvestment direc-tion. Finally, the average reinvestment percentage rate is very low (20%), when the recommended value is mostly about 64%. Surprisingly, factors such as age, gender or competitive advantage were confirmed to be statistically non-significant. Finally, this article suggests future directions for the develop-ment of portfolio models.
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