Adequate asset structure as a foundation for profitability of agricultural enterprises

Abstract

The analysis of the financial position of agricultural enterprises in the West Bačka region conducted over multiple years indicates that adequate structure of assets and its sources has a significant impact on the enterprises' positive business results. Using financial analysis, research carried out in 25 mid-sized agricultural enterprises led to the following result: High level of own sustainable sources and high ratio of general liquidity positively affect profitability, while the rate of return on capital and its decline can have an inversely proportional effect on profitability. In order to achieve better business results, this research has proposed an adequate structure of assets and its sources, in correlation to the ratio of general liquidity, for the observed agricultural enterprises. .

Keywords

• agricultural enterprises
• financial analysis
• organic structure of capital
• profitability
• liquidity