Economy and Sociology (Jul 2015)
GRADING OF INDUSTRIES BY SIZE CRITERION AND ITS IMPACT ON THEIR PLACE AND ROLE IN ECONOMY OF AGRICULTURAL ENTERPRISES
Abstract
We find it reasonable to determine the importance (place) of an industry for an enterprise based on such indicators as the share of costs of the industry (production consumed resources) in the total operating costs of the enterprise and the scope of these costs per unit of land area, and to determine the role of an industry based on the share of the operating profit of the industry in the operating profit of the enterprise, the operating profit of the industry per unit of land sales, and the return on sales of the industry products. According to the place and role of an industry in the economy of an enterprise, a size-based scale of industries was proposed, distinguishing auxiliary, minor, small, supplementary and key industries. It has been proved that enterprises with large-sized land areas normally afford developing minor industries, whereas smaller enterprises place an emphasis on the development of supplementary and key industries. It has also been established that the place of minor and small industries is overestimated in the economy of enterprises because of their inefficiency as compared to their role and contribution to the development of such enterprises. Conversely, supplementary and especially key industries play a crucial role in ensuring the profitability of production.
