Ekonomika a management
PROFITABILITY OF THE FOOD INDUSTRY IN POLAND – AN ORDERED LOGIT MODEL APPROACH
The socio-political changes which started in the late 90’s and the Polish accession to the European Union in 2004 fundamentally determined the direction of structural changes of the national economy. These changes resulted in the beginning of the privatization processes, consolidation and concentration, which, together with the accession to the EU and the intensiﬁcation of the globalization processes, increased their dynamics. Moreover, there was a confrontation with foreign markets, mainly those of the EU, resulting in changes in prices relations, consumer preferences and implementation of legal regulations.
Jméno a příjmení autora:
Zbigniew Gołaś, Izabela Kurzawa
Food industry, Poland, return on equity, system of ﬁnancial ratios, ordinal regression
DOI (& full text):
The article addresses the problem of ﬁnancial determinants of return on equity (ROE) in the food industry in Poland. The analysis was conducted on the basis of the decomposition of the rate of return…více
The article addresses the problem of ﬁnancial determinants of return on equity (ROE) in the food industry in Poland. The analysis was conducted on the basis of the decomposition of the rate of return on sales and in conjunction with the system of indicators linking the return on sales to return on assets and equity. In addition, in order to identify the signiﬁcance of individual components of the ROE system, ordered logit regression models were estimated.
The proposed in the paper system of decomposition of the return on equity has allowed a multidimensional analysis of proﬁtability determinants. Its implementation in the food industry sectors, using the logit regression models of ordered categories, has proven that the reasons for different ROE in the food industry sectors should be primarily sought in the ability to create value added, labour costs, rational management of ﬁnancial expenses, efﬁcient use of assets as well as in more aggressive shaping the capital structure, determining the level of ﬁnancial leverage. In conclusion, the applied in the paper ordered logit model of the return on equity has proven to be a very good tool to assess the signiﬁcance of the factors affecting the level of ROE rates in the food industry sectors. In addition, the proposed model apart from its applicability also possesses a practical value. It allows predicting probable scenarios of transition from a very low level of the return on equity to more favourable ﬁnancial results measured with this proﬁtability category.
Ekonomika a management