Financial ratios and profitability prediction
The result's identifiers
Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F60076658%3A12510%2F22%3A43905686" target="_blank" >RIV/60076658:12510/22:43905686 - isvavai.cz</a>
Result on the web
<a href="http://omp.ef.jcu.cz/index.php/EF/catalog/book/83" target="_blank" >http://omp.ef.jcu.cz/index.php/EF/catalog/book/83</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.32725/978-80-7394-976-1.24" target="_blank" >10.32725/978-80-7394-976-1.24</a>
Alternative languages
Result language
angličtina
Original language name
Financial ratios and profitability prediction
Original language description
The presented article deals with the possibility of using financial ratio indicatorsto predict the profitability of agricultural enterprises. The Albertina database was used as adata source. A total of 701 agricultural enterprises were selected, with sales of more than onemillion crowns. Companies from the manufacturing industry were used for comparison. Thecorrelation between the value of the financial ratio and the company's profitability in thefollowing years was calculated. Spearman's correlation coefficient was used. Research showsthat the success rate of agricultural enterprises is relatively stable. The correlation betweenROA value and subsequent profitability is 0.41 to 0.48 (for year t+1). In the following years,the correlation decreases. These values are approximately 5 – 10 percentage points below theimportance of the manufacturing industry. However, correlations can be increased bydividing businesses into categories of similar size or according to similar altitudes. Theusability of other financial ratios is lower. The correlation between indebtedness and futureprofitability is approximately -0.25, and the correlation between liquidity and futureprofitability fluctuates around the value of 0.20. These values correspond to values fromother industries as well. A significant difference is the usability of activity indicators. Formanufacturing, correlation values range from 0.21 to 0.24, but for agricultural enterprises,the correlation is considerably lower. The reason is the high dependence of the indicator onthe altitude and the production orientation of the agricultural enterprise.
Czech name
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Czech description
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Classification
Type
D - Article in proceedings
CEP classification
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OECD FORD branch
50206 - Finance
Result continuities
Project
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Continuities
I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace
Others
Publication year
2022
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů
Data specific for result type
Article name in the collection
Proceedings of the 16th International Scientific Conference INPROFORUM 2022. DIGITALIZATION. Society and Markets, Business and Public Administration
ISBN
978-80-7394-976-1
ISSN
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e-ISSN
2336-6788
Number of pages
8
Pages from-to
157-164
Publisher name
Jihočeská univerzita v Českých Budějovicích, Ekonomická fakulta
Place of publication
České Budějovice
Event location
České Budějovice
Event date
Oct 3, 2022
Type of event by nationality
EUR - Evropská akce
UT code for WoS article
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