Performance and profit sensitivity to risk: a practical evaluation of the agro-industrial projects developed by Israeli companies for the CIS and Eastern European countries

Gregory Yom Din ()

Agricultural and Food Economics, 2013, vol. 1, issue 1, 1-23

Abstract: International companies take part in many tenders for agro-industrial projects in the Commonwealth of Independent States and Eastern European countries. The market for these projects is analyzed and found to be favorable for companies and developers. Major projects developed in recent years are presented and evaluated in terms of financial performance. Additionally, a method of project evaluation by profit sensitivity to risk criterion is proposed. In this method, the approximate formula for profit sensitivity to risk (when basic production and market assumptions change simultaneously) is derived using a cost-volume-profit model. This method allows minimal calculations to explain profit sensitivity and elasticity within the usual indicators of business planning: operational profitability and degree of operating leverage. The consistency of project ranking is examined using Cronbach's alpha and correlation coefficients. The ranks obtained by various performance criteria are found to be consistent with each other, but not with those obtained by profit sensitivity to risk. In terms of elasticity, project profitability is a much stronger influence than the degree of operating leverage on profit sensitivity to risk. Copyright Yom Din; licensee Springer. 2013

Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1186/2193-7532-1-3 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:agfoec:v:1:y:2013:i:1:p:1-23:10.1186/2193-7532-1-3

Ordering information: This journal article can be ordered from
http://www.springer. ... nomics/journal/40100

DOI: 10.1186/2193-7532-1-3

Access Statistics for this article

Agricultural and Food Economics is currently edited by Alessandro Banterle, Liesbeth Dries, Andrea Marchini and Carlo Russo

More articles in Agricultural and Food Economics from Springer, Italian Society of Agricultural Economics (SIDEA) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().