Financial health assessment of agricultural enterprises with ecological farming

POSOUZENÍ FINANČNÍHO ZDRAVÍ U ZEMĚDĚLSKÝCH PODNIKŮ S EKOLOGICKOU VÝROBOU

Daniel Kopta and Jindřiška Kouřilová
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Daniel Kopta: University of South Bohemia in České Budějovice
Jindřiška Kouřilová: University of South Bohemia in České Budějovice

Acta Universitatis Bohemiae Meridionalis, 2007, vol. 10, issue 2, 55-62

Abstract: This paper presents the outcomes of financial health assessment of agricultural enterprises with ecological farming. First part of this paper deals with overall indicators of financial health. The outcomes of the most frequently used financial health indicators are unclear. However, the majority of models reflect the improving economic situation. The outcome values of ecological enterprises are however still below the level of conventional enterprises. Second part of this paper is based on classical financial analysis. The research has shown basically identical year-to-year development of profitability ratios of conventional and ecologic enterprises as well as high variability of profitability of both categories. The total value of return on assets is completely unsatisfactory within both categories. The differences in utilization of assets are more likely caused by different alignment of production so that lower values of ecological enterprises cannot be assessed as unfavourable. At the same time, ecological enterprises are still in worse situation regarding many economic indicators. Significant problems may be caused especially by extremely low current ratio. On the contrary, the development of debt ratio is very favourable. The debt ratio had decreased by 30 percent points during the research and it reached the level of 10 points below the conventional enterprises average. This paper is a part of MSM 6007665806 project.

Keywords: financial analysis; financial health; agricultural holding; ecological farming (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:boh:actaub:v:10:y:2007:i:2:p:55-62

DOI: 10.32725/acta.2007.022

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