ANALIZA MEĐUOVISNOSTI IZMEĐU NOVČANOG TOKA I ZADUŽENOSTI U HOTELSKOJ INDUSTRIJI U REPUBLICI HRVATSKOJ
ANALYSIS OF INTERDEPENDENCE BETWEEN THE CASH FLOW AND INDEBTEDNESS IN HOTEL INDUSTRY IN CROATIA

Summary/Abstract: Companies in the contemporary business environment are exposed to strong competition, they are constantly in a certain type of contest, so in order to survive they have to expand and improve their activities, services and products on which they generate growth and profitability. Growth needs to be financed, and the key question is how cash flows and debts affect each other. The business goal of all companies is to provide sufficient cash to settle the liabilities (debts) of the company to suppliers, employees, creditors and others, as well as for the new investments. If a company fails to meet its due obligations, it can face with liquidity and solvency problems. The company should not retain significant financial resources, but it should beam on profit-maximizing activities. Accordingly, companies should base their cash management policy on the fulfilment of its debts to the external sources of finance, while a certain amount of money should be invested in projects and activities that would generate future cash flows and improve the company’s profitability. The aim of this paper is to analyze the interdependence between the cash flow from operating activities and the indebtedness of companies in the hotel industry, and to determine the financial coverage of total liabilities for companies from the hotel industry in Croatia.

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