Determinants of Financial Profitability of Animal Fee D Producers

Dorota Czerwińska-Kayzer and Joanna Florek

Roczniki (Annals), 2019, vol. 2019, issue 01

Abstract: Return on equity is among the basic ratio of economic benefit for enterprise owners. It must be generated as a fundamental condition for the continuous operation and development of an enterprise, regardless of the type of business. The main purpose of this paper was to identify the strength and direction of impact of selected determinants behind financial profitability of animal feed producers. The analysis was based on a six-factor cause-and-effect model linking the determinants of financial profitability to three areas of business activity: the operating, financial and fiscal area. This study relied on the financial data between the years 2011–2016 of individual financial statements of animal feed producers. Based on the results of multiple regression analysis, no factors could be identified that consistently affect the return on equity in the period considered. However, the following can be concluded to be the main factors affecting the variation in return on equity of animal feed producers: the ratio of cash from operating activities to net sales; the return on capital employed; and the financing structure. As shown by this study, in order to improve profitability ratios and, thus, to provide more value to owners and increase the value of the company, managers of establishments producing animal feed should focus their efforts on improving cash management efficiency and asset turnover as well as managing sources of funding.

Keywords: Agribusiness; Agricultural Finance (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:ags:paaero:293813

DOI: 10.22004/ag.econ.293813

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