Risk of secondary insolvency coming from engineering companies in the Czech Republic

The aim of the paper is to evaluate payment habits of engineering companies in the period 2008 2012, to identify and compare solvent companies with poor payment habits on the one hand and companies with bad financial health and excellent payment habits on the other hand. The analysis is based on sample of 2 124 engineering companies. The data was processed by descriptive statistics and hypotheses testing. The results indicate very good payment habits of engineering companies. More than 90 % of the sample meets the obligations no later than thirty days after maturity. However, about 5 % of the sample is characterized by good financial health and poor payment habit. Such companies prefer different strategy of liquidity and cash management and pose high risk of secondary insolvency for their suppliers.