Alternatives for Exiting the Loss Zone for Mediumsized Agricultural Enterprises in the Republic of Serbia

Đuričin, Sonja and Beraha, Isidora and Bodroža, Duško (2018) Alternatives for Exiting the Loss Zone for Mediumsized Agricultural Enterprises in the Republic of Serbia. Ekonomika poljoprivrede: časopis Saveza poljoprivrednih inženjera i tehničara Jugoslavije, 65 (1). pp. 391-411. ISSN 0352-3462

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Abstract

The research objective is to identify causes and alternatives for exiting the loss zone for agricultural enterprises in Serbia. The subject of the research is financial performance of agricultural enterprises in 2010-2014. Economic and financial power of all mediumsized agricultural enterprises was determined by applying financial analysis. Based on the sample of least successful entities, the causes and alternatives for exiting the loss zone were identified. The results show that loss appears due to a reduction in operating income or in contribution margin, or due to an increase in financial expenses. The first suggested alternative refers to increasing the volume of production and sales at current global price parity, while the second assumes shifting global price parity in favour of sales prices at current real capacity utilization rate. The effects of proposed alternatives are evaluated by two measures of profitability - return on assets and return on equity.

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