Acta Univ. Agric. Silvic. Mendelianae Brun. 2016, 64(2), 643-652 | DOI: 10.11118/actaun201664020643

Impact of Activity-Based Costing on Financial Performance in the Czech Republic

Jana Pokorná
Department of Corporate Economy, Faculty of Economics and Administration, Masaryk University, Žerotínovo nám. 617/9, 601 77 Brno, Czech Republic

Looking for factors affecting business performance is one of a central concern of business economists for several years. Activity-Based Costing (ABC) is a management tool that provides additional and more accurate information on the costs and company performance, thus contributes to better manager decision making, and thus has potential to affect the financial performance. This paper aims to investigate the link between the use of ABC among corporations in the Czech Republic and improvement in corporate financial performance.
The empirical survey was carried out among 548 Czech medium-sized and large companies from various economic sectors. Financial performance was measured by standardized Return on Assets from 2005 to 2011.
The ABC expansion among enterprises in the Czech Republic is currently comparable with neighbouring countries, although the extent of its use is lower. Surprising but statistically significant results show that businesses that use ABC have on average the same or even lower financial performance than businesses without ABC.

Keywords: Activity Based Costing, financial performance, the Czech Republic, cost management
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This article is a part of the output of the specific research project of Masaryk University entitled "Quality management and company competitiveness" [No. 0799/2013].

Prepublished online: May 4, 2016; Published: May 1, 2016  Show citation

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Pokorná, J. (2016). Impact of Activity-Based Costing on Financial Performance in the Czech Republic. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 64(2), 643-652. doi: 10.11118/actaun201664020643
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