Application of a system of indices to an analysis of agricultural holdings economy in the LFA regions

Aplikace soustav ukazatelů na rozbor hospodaření zemědělských podniků v regionech LFA

Martina Novotná and Jaroslav Svoboda
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Martina Novotná: Katedra ekonomiky, Jihočeská univerzita v Českých Budějovicích, Studentská 13, 370 05 České Budějovice, Česká republika
Jaroslav Svoboda: Katedra účetnictví a financí, Jihočeská univerzita v Českých Budějovicích, Studentská 13, 370 05 České Budějovice, Česká republika

Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 2010, vol. 58, issue 3, 165-174

Abstract: The economic situation of Czech agriculture is discussed in depth with its key questions related to insufficient level of subsidies (lower than subsidies paid to other member states of the EU) and to a decrease of prices of agricultural commodities. The paper deals with the situation of agricultural holdings in 2003-2007 examined with a system of financial analysis indices. A sample of 150 farms created within the project MSM 6007665806 was used to set indices of the financial analysis. Agricultural holdings were classified according to the share of the area of agricultural land in the LFA. The introduction to the analysis mentions the return on assets (ROA) which is a synthesis indicator of assessing the efficiency of a firm. In the paper, the following system of financial analysis indicators was used: the Altman Z-score index; the IN 95 index, the IN 99 index, IN 01 index; the Kralicek Quick Test, the Bonity index and the Du Pont pyramid system of indices for an analysis of the profitability. The aim of the paper was to assess the profit/loss of farms in relation to different farming conditions related to the share of land in the LFA and to subsidy policy. The analysis revealed that the subsidy system is set to compensate difficult conditions of farms in less favoured areas (i.e. farms with greater percentage of agricultural land in the LFA).

Keywords: agriculture; subsidies; financial analysis; system of indices; bankruptcy and bonity indices; agricultural holdings; less favoured areas (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:mup:actaun:actaun_2010058030165

DOI: 10.11118/actaun201058030165

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