FACTORS DETERMINING PROFITABILITY OF SMALL AND MEDIUM ENTERPRISES IN SELECTED INDUSTRY OF MECHANICAL ENGINEERING IN THE SLOVAK REPUBLIC – THE EMPIRICAL STUDY

The profitability analysis revealing factors influencing profitability becomes a very helpful tool providing guidelines for managers in their short-term as well as strategic decision-making process. To take right decisions, managers need to analyse their financial situation, especially in respect to firm´s profitability and the factors influencing it. Mechanical engineering industry belongs to key industries in Slovakia. It apparently plays an essential role in the global economy, it is a source of entrepreneurship, innovations and new jobs. Many of enterprises operating in this industry are small or medium-sized. These are some of the reasons for which SMEs´ profitability and ways of its improvement should draw particular attention. The paper presents results of research carried out in the selected industry of mechanical engineering of SMEs in Slovakia (SK NACE rev. 2 28xxx – Manufacture of machinery and equipment not elsewhere classified). The aim of the research is to analyse and evaluate the development of profitability in this industry during the period 2008-2015 and to identify key external and internal factors influencing profitability of SMEs over that period. In order to determine the influence of basic indicators, the DuPont pyramidal analysis was performed. Data obtained by means of the questionnaire survey enabled to identify the factors affecting profitability whose influence is impossible to calculate. The Friedman and Wilcoxon tests were used to evaluate the answers in questionnaires. Results are connected with the evaluation of three hypotheses defined in regard of the established goal of the paper.