Agric. Econ. - Czech, 2020, 66(11):477-488 | DOI: 10.17221/128/2020-AGRICECON

European benchmarking of determinants of profitability for companies with accrual accounting in the agricultural sectorOriginal Paper

Dirk Beyer1, Jana Hinke ORCID...*,2
1 Department of Business Studies, Harz University of Applied Sciences, Wernigerode, Germany
2 Department of Finance and Accounting, Faculty of Economics, University of West Bohemia, Plzeň, Czech Republic

In this study, differences in common measures of profitability, such as return on sales, return on capital employed and return on equity, are analysed in agricultural firms with accrual accounting in 10 European countries. The resulting differences in profitability are broken down using an additive decomposition method, which addresses the quantified impact of several affecting factors. This approach is based on a ratio system, which follows the principles of the DuPont identity. According to the general intention of benchmarking, the leading country within the sample for each measure of profitability provides the relevant reference point, representing best practice. This approach provides insight into the specific comparative strengths and weaknesses of the agribusinesses in the countries within the sample and indicates useful starting points for effective improvements. In addition to the value-creating operations, this involves, in particular, labour productivity, the efficient use of fixed assets and the degree of debt financing.

Keywords: agribusiness; comparative analysis; return on capital employed; return on equity; value-added; variance analysis

Published: November 30, 2020  Show citation

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Beyer D, Hinke J. European benchmarking of determinants of profitability for companies with accrual accounting in the agricultural sector. Agric. Econ. - Czech. 2020;66(11):477-488. doi: 10.17221/128/2020-AGRICECON.
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