The Analysis of Profitabilty Indicators in Serbian Food Industry During Economic Crisis
6 Pages Posted: 5 Nov 2016
Date Written: July 2, 2013
Information on the financial position and performance of business entities that are presented in their financial statements, have always had great importance for the users (both internal and for external), since they are the basis for making decisions about allocation of resources.
One of the most important information is the level of profitability of the company in terms of (ROA) and return on equity (ROE). ROE shows how effectively a company's management uses investors’ capital while ROA shows how profitable a company's assets are in generating revenue. The aim of this paper was to present financial performances of 5 top companies in Serbian food industry, especially in meat industry (MI) in terms of profitability measured by ROA and ROE. Methodology used in this paper included financial Du Pont method and correlation using SPSS program, version 17.0. Based on Du Pont analysis authors presented changes in ROA and ROE indicators during three years of economic crisis, from 2008 until 2010. Also, correlation between ROE and ROA explained relationship between these two indicators, where ROE is found as a function of ROA.
Keywords: profitability, ROA, ROE, meat industry, Serbia
JEL Classification: O13, Q10, E63 and E60
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