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Financial health of agricultural enterprises in the organic sector

Brozova, Ivana (2011) Financial health of agricultural enterprises in the organic sector. Acta Universitatis Agriculturae et Silvicuturae Mendelianae Brunensis, 7, pp. 91-96.

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Summary

The present research was aimed at evaluating the economic performance of organic farm enterprises (legal entities) in the Czech Republic on the basis of their production base and financial health. The evaluation was carried out by means of specific financial indicators. The results recorded in the organic farming sector were confronted with those of the conventional agriculture. It stemmed from the analysis that conventionally farming legal entities, as opposed to the organically farming ones, tend to have higher average assets per hectare of farmland. Secondly, as for the structure of assets, fixed assets prevail substantially over current assets. Organic farms, on the contrary, have a significantly higher average value of external financial resources per hectare of farmland. In order to evaluate the financial health of organic farms, their economic results were used; firstly in absolute value (including per hectare calculation) and then within the individual ratios. The analysis showed that 84.4 % farms of the sample were profitable as long as subsidies were included in the yields. While excluding subsidies from the calculations, an overwhelming majority of enterprises (95.3 %) recorded a loss. Comparing the per hectare economic results, higher average profit rates were recorded for organic farms. Furthermore, financial health of the enterprises was analyzed by means of selected indicator ratios. Concrete results, including the respective commentaries, can be found in the present paper too.


EPrint Type:Journal paper
Keywords:financial health, financial analysis, economic result, enterprise, organic enterprise, conventional farm enterprises, legal entities, ratios
Subjects: Farming Systems > Farm economics
Research affiliation: Czech Republic > Czech University of Life Sciences (CZU)
ISSN:1211-8516
Deposited By: Brožová, Ing. Ph.D. Ivana
ID Code:22198
Deposited On:23 Jan 2013 08:09
Last Modified:23 Jan 2013 08:09
Document Language:English
Status:Published
Refereed:Peer-reviewed and accepted

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