ZESZYTY NAUKOWE

Szkoły Głównej Gospodarstwa Wiejskiego w Warszawie

SCIENTIFIC JOURNALS

Warsaw University of Life Sciences – SGGW

POLITYKI EUROPEJSKIE, FINANSE i MARKETING

NR 10 (59) 2013

EUROPEAN POLICIES, FINANCE AND MARKETING

NO 10 (59) 2013

Wydawnictwo SGGW

Warszawa 2013

Warsaw University of Life Sciences – SGGW Press Warsaw 2013

RADA PROGRAMOWA Bogdan Klepacki (SGGW) – prof. dr hab., Szkoła Główna Gospodarstwa Wiejskiego w Warszawie – Przewodniczący Mieczysław Adamowicz – prof. dr hab. dr h.c., Szkoła Główna Gospodarstwa Wiejskiego w Warszawie – Wiceprzewodniczący Marian Podstawka – prof. dr hab., Szkoła Główna Gospodarstwa Wiejskiego w Warszawie Janusz Żmija – prof. dr hab. dr h.c., Uniwersytet Rolniczy w Krakowie Andrzej P. Wiatrak – prof. dr hab., Uniwersytet Warszawski Lubica Bartova – prof., Slovak Agricultural University in Nitra, Słowacja Julian Briz – prof., Universidad Politecnica de Madrid, Hiszpania Francęsco Sotte – prof., Universita Politecnica delle Marche Ancona, Włochy Sandra Krtalic, Full Professor – Academic Unit for Finance, Department of Economics and Tourism, Juraj Dobrali University of Pula, Chorwacja KOMITET REDAKCYJNY Marian Podstawka, prof. dr hab. – Redaktor Naczelny Aleksandra Wicka, dr inż. – Redaktor Prowadzący Janina Sawicka, prof. dr hab. Agnieszka Biernat-Jarka, dr Marzena Lemanowicz, dr Halina Powęska, dr Eugeniusz Pudełkiewicz, prof. SGGW dr hab., redaktor tematyczny (marketing) Aleksandra Wicka, dr inż. – redaktor tematyczny (ubezpieczenia) Agnieszka Parlińska, dr inż. – redaktor tematyczny (finanse) Agata Kropiwiec, mgr – redaktor językowy, język polski Christian Richter, dr – redaktor językowy, język angielski Wiesław Szczesny – prof. SGGW dr hab., redaktor statystyczny Monika Narojek, mgr – sekretarz redakcji PROJEKT OKŁADKI – Tomasz Tabor REDAKCJA TECHNICZNA – Krystyna Piotrowska, Tomasz Ruchniewicz ADRES KORESPONDENCYJNY Szkoła Głowna Gospodarstwa Wiejskiego w Warszawie Wydział Nauk Ekonomicznych Katedra Polityki Europejskiej, Finansów Publicznych i Marketingu ul. Nowoursynowska 166, 02-787 Warszawa tel./fax: 22 593 40 77; e-mail: kpam@sggw.pl ISSN 2081-3430 Wydawnictwo SGGW ul. Nowoursynowska 166, 02-787 Warszawa tel. (22) 593 55 20 (-22, -25 – sprzedaż), fax (22) 593 55 21 e-mail: wydawnictwo@sggw.pl, www.wydawnictwosggw.pl Druk: Agencja Reklamowo-Wydawnicza A. Grzegorczyk, www.grzeg.com.pl

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SPIS TREŚCI

Adamczyk Grażyna Specyfika przekazów reklamowych kierowanych do segmentu dziecięco-młodzieżowego THE SPECIFICITY OF ADVERTISING MESSAGES DIRECTED TO THE CHILD AND YOUTH SEGMENT ...................................................................................................................................... 9 Andrzejewska Patrycja, Firlej Krzysztof Implementacja instrumentów marketingu internetowego na polskim rynku piwa THE IMPLEMENTATION OF INTERNET MARKETING TOOLS ON THE POLISH BREWERY MARKET ...................................................................................................................................... 21 Badzińska Ewa MEDIA CONVERGENCE AS A HALLMARK OF MODERN MARKETING COMMUNICATION ..... 32 Białek Ewa, Zajkowska Monika Witryna internetowa w komunikacji marketingowej nauczyciela akademickiego THE WEBSITE IN THE MARKETING COMMUNICATION OF AT THE TEACHING FELLOW’S WORK ..................................................................................................... 45 Bobola Agnieszka M. Prosument w opiniach polskich konsumentów PROSUMER IN THE OPINION OF POLISH CONSUMER ............................................................... 55 Borkowski Bolesław, Krawiec Monika Modele zarządzania ryzykiem inwestycji kapitałowych w sektorze rolno-spożywczym MODELS FOR MANAGING RISK OF CAPITAL INVESTMENTS IN AGRI-FOOD SECTOR ............ 64 Brodzińska Katarzyna Problem społecznej odpowiedzialności w rolnictwie PROBLEM OF THE SOCIAL RESPONSIBILITY IN AGRICULTURE .............................................. 79 Brańka Sebastian WHY DO THE UNIVERSITY GRADUATES SETTLE DOWN IN THE UNIVERSITY TOWN? POTENTIAL IMPLICATIONS FOR CITY MARKETING -THE CASE OF CRACOW ........................ 87 Brzostek Joanna, Kowrygo Barbara Analiza i ocena rynku czekolady w Polsce w latach 2005-2011 z uwzględnieniem zachowań starszych konsumentów ANALYSIS AND EVALUATION OF THE CHOCOLATE MARKETIN POLAND IN 2005-2011 WITH PARTICULAR ATTENTION TO BEHAVIOUR OF OLDER CONSUMERS ...................................... 98 Burgiel Aleksandra PROBLEMS OF RESEARCHING CONSUMERS ON SENSITIVE ISSUES – SOME OBSERVATIONS ON THE EXAMPLE OF EMULATORY BEHAVIOR .................................................................... 108 Chrzanowski Marek Ocena korzyści i kosztów wdrażania budżetu zadaniowego przez pryzmat efektywności wydatkowania środków publicznych w wybranych krajach OECD EVALUATION OF THE BENEFITS AND COSTS OF IMPLEMENTATION OF PERFORMANCE BUDGETING IN THE CONTEXT OF THE EFFECTIVENESS OF PUBLIC SPENDING IN SELECTED OECD COUNTRIES .................................................................................................. 118 Čierna Zuzana, Prevužňáková Jana APPLICATION OF ACTIVITY INDICATORS IN SLOVAK AGRICULTURAL ENTERPRISES ....... 131

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Cyran Kazimierz Preferencje konsumentów w zakresie miejsc zakupów żywności jako wyznacznik możliwości rozwoju handlu na targowiskach i bazarach. CONSUMERS PREFERENCES OF FOOD SHOPPING PLACES AS A DETERMINANT OF THE MARKETS AND BAZAARS DEVELOPMENT OPPORTUNITIES .................................... 142 Czerwiński Bogumił Rola innowacji marketingowych w działalności instytucji finansowych ROLE OF MARKETING INNOVATIONS AND THE ACTIVITY OF FINANCIAL INSTITUTIONS . 156 Dmitruk Joanna, Krzyżanowska Krystyna Relacje inwestorskie jako narzędzie kształtowania reputacji spółek giełdowych INVESTOR RELATIONS AS A TOOL FOR SHAPING THE REPUTATION OF LISTED COMPANIES .............................................................................................................................. 169 Feczko Janusz Turystyka wiejska – Pomorze 2013. Problemy ekonomiczne i zarządzania marketingowego RURAL TOURISM – POMORZE 2013. ECONOMIC AND MARKETING MANAGEMENT ISSUES 180 Gazdecki Michał, Goryńska-Goldmann Elżbieta Usługa żywieniowa w strategiach produktowych przedsiębiorstw CATERING SERVICES IN PRODUCT STRATEGIES OF ENTERPRISES ...................................... 195 Gąsior Marcin Stosunek konsumentów rynku IT do zależnych i niezależnych internetowych źródeł informacji zakupowej CONSUMERS’ ATTITUDE TOWARDS DEPENDENT AND INDEPENDENT INTERNET SOURCES OF INFORMATION .................................................................................................................... 205 Glińska Ewa HOW TO SEARCH THE PLACE BRAND IDENTITY DISTINGUISHED FEATURES? THE LOCAL STAKEHOLDERS' PERSPECTIVE ............................................................................................... 214 Golik-Górecka Grażyna Elementy platformy strategii marketingowo-finansowej ELEMENTS OF PLATFORMS OF MARKETING – FINANCIAL STRATEGIES ............................. 225 Górska-Warsewicz Hanna Zarządzanie tożsamością marek w przedsiębiorstwach sektora żywnościowego BRAND IDENTITY MANAGEMENT IN FOOD COMPANIES ...................................................... 239 Grego-Planer Dorota, Liczmańska Katarzyna, Petrykowska Joanna Korzyści wynikające z budowania trwałych relacji z klientami w firmach usługowych BENEFITS RESULTING FROM DEVELOPING LASTING RELATIONSHIPS WITH CUSTOMERS IN COMPANIES RENDERING SERVICES ................................................... 256 Grzegorzewska Emilia Zadłużenie przedsiębiorstw rolnych w Polsce w obliczu globalnego kryzysu gospodarczego DEBT BURDEN OF AGRICULTURAL ENTERPRISES IN POLAND IN THE FACE OF WORLD ECONOMIC CRISIS .................................................................................................................... 268 Grzegorczyk Wojciech MARKETING STRATEGIES OF POLISH BANKS – EVALUATION ATTEMPT ............................... 277 Horská Elena, Berčík Jakub, Gálová Jana RETAIL MARKETING STRATEGIES AND INNOVATIONS IN THE PRACTICE OF A RETAIL CHAIN ................................................................................................................. 289 Janulewicz Paweł Funkcje i metody kształtowania ceny w jednostce samorządu terytorialnego FUNCTIONS AND METHODS OF PRICE FORMATION IN LOCAL GOVERNMENT UNIT ........... 304

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Jaska Ewa Determinanty skutecznej reklamy medialnej THE DETERMINANTS OF EFFECTIVE MEDIA ADVERTISING .................................................. 312 Jastrzębska Sandra Skuteczność standardowych form promocji na rynku produktów mleczarskich na przykładzie przedsiębiorstwa Bakoma S.A. EFFICIENCY OF STANDARD FORM PROMOTION ON MARKET OF DAIRY PRODUCTS ON EXAMPLE OF ENTERPRISES BAKOMA S.A. ....................................................................... 320 Karasiewicz Grzegorz Stopień internacjonalizacji polskich przedsiębiorstw a ich efekty finansowe THE INTERNATIONALIZATION OF POLISH COMPANIES AND THEIR FINANCIAL PERFORMANCE ........................................................................................................................ 331 Kluza Krzysztof IMPACT OF PUBLIC BANKS ON STABILITY OF FINANCIAL SYSTEM ..................................... 343 Koszarek Marita CHALLENGES IN THE MARKETING AND BRANDING OF CLUSTERS ..................................... 353 Koszembar-Wiklik Małgorzata Media społecznościowe w strategii public relations miast ........................................................ 361 Kot Zofia, Kaczorowska Joanna Postrzeganie marek własnych wybranych detalistów spożywczych w Polsce wśród młodych konsumentów PERCEPTION OF PRIVATE LABELS IN POLAND AMONG YOUNG CONSUMERS .................... 371 Krot Katarzyna, Rudawska Iga Koncepcja zaufania w relacji lekarz-pacjentw świetle badań jakościowych TRUST IN DOCTOR-PATIENT RELATIONSHIP IN LIGHT OF QUALITATIVE RESEARCH ......... 381 Kretter Anton, Kádeková Zdenka ECO MARKETING IN AGRICULTURE AND BARRIERS TO ORGANIC FOOD SALES ................ 394 Król Monika A. Ekologizacja Wspólnej Polityki Rolnej –zagadnienia prawne .................................................. 402 Kruk Marek Znaczenie marki w procesie komercjalizacji nowego produktu BRAND INFLUENCE ON NEW PRODUCT COMMERCIALIZATION PROCESS ........................... 422 Kubiak Krzysztof Kapitał marki w sieci wymiany wartości BRAND CAPITAL IN THE VALUE EXCHANGE NETWORK ....................................................... 432 Kuźniar Wiesława Organizacyjne aspekty rozwoju marketingu terytorialnego w gminach turystycznych ORGANISATIONAL ASPECTS OF DEVELOPMENT OF TERRITORIAL MARKETING IN TOURIST COMMUNES ............................................................................................................................... 444 Leszczyński Grzegorz BUSINESS-TO-BUSINESS ADAPTATION – CUSTOMER PERSPECTIVE .................................... 451 Łatuszyńska Małgorzata, Wawrzyniak Agata Metody symulacji komputerowej w badaniach marketingowych COMPUTER SIMULATION METHODS IN MARKETING RESEARCH ......................................... 462 Matysik-Pejas Renata, Szafrańska Monika, Sowula Marta Percepcja marek własnych przez nabywców produktów żywnościowych PERCEPTION OF PRIVATE LABELS BY PURCHASERS OF FOOD PRODUCTS .......................... 475

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Michalski Eugeniusz Strategie marketingowe rozwoju produktu MARKETING STRATEGIES FOR DEVELOPING A PRODUCT .................................................... 484 Nalewajek Monika, Mącik Radosław THE IMPACT OF VIRTUAL COMMUNITIES ON ENHANCING HEDONISTIC CONSUMER ATTITUDES ............................................................................................................................... 494 Nestorowicz Renata THE ASYMMETRY OF INFORMATION ON FOOD MARKET AND CONSUMERS’ PREFERENCES – SOME ASPECTS ......................................................................................................................... 506 Oleszczyk Katarzyna Rola i znaczenie środowiska rodzinnego w kształtowaniu postaw konsumenckich dzieci ....... 514 Paluch Łukasz Rola władz samorządowych w kreowaniu zrównoważonego rozwoju gmin wiejskich województwa małopolskiego THE ROLE OF LOCAL AUTHORITIES IN CREATION OF SUSTAINABLE DEVELOPMENT OF RURAL COMMUNES IN THE MAŁOPOLSKA PROVINCE .................................................... 527 Paluchová Johana, Prokeinová Renata SUSTAINABILITY IN SERVICE´S SECTOR: NEW TRENDS OF SUSTAINABILITY TOOLS AND POSITIONING OF SERVICES IN ECONOMY ...................................................................... 540 Pawlak-Kołodziejska Katarzyna, Łapińska Justyna Rola public relations w promocji usług w przedsiębiorstwach funkcjonujących w Polsce THE ROLE OF PUBLIC RELATIONS IN PROMOTING SERVICES IN COMPANIES OPERATING IN POLAND ................................................................................................................................ 552 Prevužňáková Jana, Serenčéš Peter, Rábek Tomáš APPLICATION OF SELECTED DEBT RATIOS ON SLOVAK AGRICULTRURE ........................... 561 Rawski Marek CUSTOMER - TARGETED STRATEGY AS A COMPONENT OF MARKETING STRATEGY ......... 569 Rábek Tomas, Tóth Marian DEVELOPMENT OF PROFITABILITY IN SLOVAK AGRICULTURAL ENTERPRISES IN YEARS 2004-2011 .................................................................................................................... 580 Roman Michał, Nuszkiewicz Krzysztof JADWIGA DZIUBIŃSKA AGRICULTURAL EDUCATION CENTRE SCHOOLS IN GOLĄDKOWO MARKETING ACTIVITIES ............................................................................ 588 Rudawska Edyta YOUNG CONSUMERS AS GROUP BUYING SERVICES’ CUSTOMERS ...................................... 598 Rykowska Joanna, Sawicka Janina, Stolarczyk Paulina Przedsiębiorczość na obszarach wiejskich z perspektywy gender ENTREPRENEURSHIP AT RURAL AREAS - GENDER PERSPECTIVE ........................................ 607 Rybak Anna Zarządzanie marką w e-przestrzeni BRAND MANAGEMENT ON THE INTERNET ............................................................................ 620 Sekuła Alicja POSSIBILITIES OF APPLYING STANDARD TOOLS OF PROMOTION IN PLACE MARKETING . 631 Sibińska Anna TV ADVERTISING AND ITS INFLUENCE ON CHILDREN BRAND PERCEPTION. RESULTS OF QUALITATIVE STUDY ......................................................................................... 643

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Siemieniako Dariusz Lojalność młodych konsumentów alkoholu w kontekście marketingu społecznego YOUNG CONSUMERS LOYALTY TOWARDS ALCOHOL IN THE CONTEXT OF SOCIAL MARKETING ............................................................................................................................. 653 Stangierska Dagmara Otoczenie fizyczne usługi gastronomicznej i jego konsekwencje wizerunkowe – przykład marki sieci restauracji casual dining SERVICESCAPE IN FOOD SERVICE AND IT IMAGE CONSEQUENCES -CASE OF BRAND CASUAL DINING RESTAURANT CHAIN ................................................................................... 662 Sułkowska Joanna, Seliga Robert Wykorzystanie marketingu społecznego w profilaktyce zdrowia / Robert Seliga THE APPLICATION OF SOCIAL MARKETING IN HEALTH PREVENTION ................................ 672 Sułkowski Łukasz Konsumpcjonizm z perspektywy krytycznego nurtu zarządzania CONSUMERISM FROM THE PERSPECTIVE OF THE CRITICAL TREND IN MANAGEMENT ..................................................................................................................... 684 Szymankowska Agnieszka Specyfika zarządzania marką w aspekcie budowania pozycji konkurencyjnej przedsiębiorstwa THE SPECIFICITY OF BRAND MANAGEMENT IN THE CONTEXT OF BUILDING A COMPANY'S COMPETITIVE POSITION .......................................................................................................... 694 Szwacka-Mokrzycka Joanna TYPOLOGY OF MARKETING STRATEGIES FOR COMPANIES OF FOOD INDUSTRY ............... 705 Szromnik Andrzej, Wolanin-Jarosz Elżbieta ETHNOCENTRIC ATTITUDES AND BUYING DECISIONS OF POLES AND HUNGARIANS – THE ESSENCE AND MEASUREMENT WITH THE USE OF CETSCALE ANALYSIS .................... 717 Waldnerová Petra, Nagyová Ľudmila, Kleinová Katarína CONSUMER BEHAVIOUR ON THE WINE MARKET IN NITRA REGION .................................... 729 Zieliński Marek SUPPLIER-CUSTOMER RELATIONSHIP PERFORMANCE IN CONSTRUCTION INDUSTRY ...... 737 Gregor Bogdan, Gotwald Beata ADVERTASING AIMED AT CHILDREN - BETWEEN EFFICIENCY AND ETHICS OF MARKETING ACTIVITIES .................................................................................................... 747

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LISTA RECENZENTÓW (NR 9 i 10) prof. dr hab. Mieczysław Adamowicz, dr Karolina Babuchowska, Phd., Doc. Ing. Jozef Bojnansky, prof. nzw. dr hab Marek Cisek, prof. dr hab. Andrzej Czyżewski, dr Aleksandra Grobelna, Prof. CSc., Ing. Maria Hambalkova, prof. dr hab. Janina Sawicka, prof. dr hab. Roman Kisiel, Doc. CSc., Ing. Milan Kucera, dr Wiesława Lizińska, dr inż. Agata Marcysiak, dr hab. Renata Marks-Bielska, prof. dr hab. Wiesław Musiał, dr Monika Niedziółka, dr Teresa Nowogródzka, Phd., Doc. Ing. Lubomir Paska, prof. dr hab. Walenty Poczta, dr hab. prof. SGGW Eugeniusz Pudełkiewicz, Phd., Ing. Patrik Rovny, prof. dr hab. Henryk Runowski, dr Anna Rytko, Prof. CSc., Ing. Zlata Sojkova, dr Teresa Szot-Gabryś, prof. nzw. dr hab. Janusz Toruński, Prof. CSc., Ing. Iveta Ubreziova, prof. dr hab. Andrzej Wiatrak, dr inż. Aleksandra Wicka, dr hab. Ludwik Wicki, dr inż. Magdalena Zwolińska-Ligaj.

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10 (59) 2013

Tomáš Rábek Marián Tóth Slovak University of Agriculture in Nitra

DEVELOPMENT OF PROFITABILITY IN SLOVAK

AGRICULTURAL ENTERPRISES IN YEARS 2004-2011

Main objective of the paper is to evaluate the development of profitability in Slovak agriculture based on individual data from the balance sheets and profit and loose statements of all agricultural enterprises in the period 2004-2011. In the analyses we used more than 1100 enterprises in each researched year. For the characteristic the development of profitability we used more ratios from financial analyses, in the first place - Return on Investment, Return on Equity and Return on Sales. A group of profitability ratios shows the combined effects of liquidity, asset management, and debt on operating results. The results presented in this paper could be used as a benchmark for individual enterprises comparison.

KEY WORDS : Profitability, profitability ratios, benchmarking, agriculture, Slovakia INTRODUCTION As stated Serenčéš, P. (2010); the development of Slovak agriculture in recent years has been characteristic by permanent lack of funding, insolvency and a low payment degree. The causality from global economic conditions, the global financial crisis, the specific features of the agricultural sector, market forces working in agriculture within the basic laws of economics (as the law of scarcity, the law increasing returns of scale, etc.) and the risks resulting significant impact on decision making the financial strategy of entrepreneurs in agriculture. Vlachynský, K. et al. (2006) states that the financial situation and position the companies on a market depends on many factors, but especially the quality of companies' activities and attaining the business objectives. Company's financial situation is a mirror of success or failure of business. As mentioned Vlachynský, K. et al. (2006) and Kassala, Š. (2008) in financial decision are used two basic approaches that are complementary and not overlap and are sometimes contradictory: 1. accession to profit - risk based on the fact that the company is trying its decision to increase business profitability as a precondition for growth equity. Usually higher profitability is accompanied by higher risk. Therefore, financial decisions are always a compromise decision - for the opportunity to decide who brings the largest increase profits at an acceptable level of risk. 2. accession to liquidity - profitability builds on the fact that assets with high liquidity produce low yield of profit. The most liquid money is in the current account in a bank

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and treasury business. They do not yield any direct or produce a minimum credit proceeds. We should find optimal composition of corporate assets and resources, which would ensure the highest profitability in the chosen level of liquidity. MATERIAL AND METHODS For evaluation and analyse was used data of RADELA agency, which collects data for The Research Institute of Agricultural and Food Economics for the period 2004 – 2011. In the analyses we used more than 1100 enterprises (in each researched year). In the sample were used only “legal entities”, witch cover 80% of agricultural land in Slovakia. Therefore analyzing this sample offers the possibility to describe the overall situation in Slovakia. For the characteristic the development of profitability we used three ratios from financial analyses, in the first place - Return on Investment, Return on Equity and Return on Sales. Values of chosen ratios are characterised (in each researched year) by description statistic – upper decile, upper quartile average, median, lower quartile and lower decile. So presented results could be used as a benchmark for individual enterprises comparison. Using of benchmarking method is very advantageous, as it makes it easy for company’s management to see exactly where the company stands relative to its strongest competition. Upper quartile – the performance of the 25% best companies – is often used by the managers as the benchmark value. RESULTS AND DISCUSSION Return on Investment (ROI) in Slovak agricultural enterprises

The first analysed ratio is Return on Investment, which is one of the main ratios of profitability. The ratio describes the relation between earnings before interest and taxes and total invested capital to the enterprise. This ratio is used, when we want to compare companies with different capital structure (proportion between equity and liabilities) and we want to abstract of different tax burden, too. We can interpret the results in percent. In Table 1 are presented the results of ROI in year 2004-2011, which are assigned to six statistical classes.

Statistics for Return on Investment in Slovak agriculture Table 1

2004 2005 2006 2007 2008 2009 2010 2011

Upper decile 18,36% 12,96% 15,41% 18,61% 14,74% 9,14% 10,68% 15,19%

Upper quartile 7,22% 5,49% 6,68% 8,82% 6,59% 3,43% 4,53% 6,93%

Average 4,48% 2,09% 3,61% 5,20% 3,75% -1,73% 1,00% 3,82%

Median 2,51% 1,84% 2,39% 3,30% 2,71% 0,80% 1,50% 2,57%

Lower quartile 0,52% -0,31% 0,67% 1,14% 0,64% -6,89% -1,89% 0,38%

Lower decile -4,89% -8,90% -6,07% -3,01% -5,24% -16,73% -9,34% -6,01% Source: Own calculation

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In 2011 for ROI the situation in Slovak agriculture was following: - 10% of the best enterprises regarding the ROI had the profitability 15,19 % and

higher (upper decile) - 25% of the best enterprises regarding the ROI had the profitability 6,93 % and higher

(upper quartile) - The average of ROI in 2011 was 3,82 %. - 50% of the enterprises had ROI to 2,57 % and and 50% of enterprises, more than

2,57 % (median). - 25% of the enterprises with the weakest profitability had ROI less than 0,38 % (lower

quartile). - 10% of the enterprises with the weakest profitability had ROI less than -6,01 %

(lower decile). The overall development of ROI we can observe in Chart 1. The worst year was 2009 in all aspects (all statistical classes). In only this year was average of ROI in red numbers. The other way round was year 2007 the best, when the top 10 % of companies reached profitability more than 18,61 %. The top 25 % of companies (our benchmark) in each year could reach profitability more than 3.43 % (the worst in 2009), and in the best year 2007 more than 8,82 %. ROI development Chart 1

Source: Own calculation, table 1 Return on Equity (ROE) in Slovak agricultural enterprises

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The second analysed ratio is Return on Equity. This ratio describes the relation between earnings after taxes and capital, which was invested by owner of the enterprise. This ratio is very important for potential investors, seeing that represent “How much net profit falls to one Euro of equity capital”. As well we can interpret the results in percent. In Table 2 are presented the results of ROE in year 2004-2011, which are assigned to six statistical classes.

Statistics for Return on Equity in Slovak agriculture Table 2

2004 2005 2006 2007 2008 2009 2010 2011

Upper decile 44,00% 38,38% 34,64% 40,38% 28,56% 21,87% 25,54% 29,53%

Upper quartile 15,63% 12,91% 13,36% 17,33% 11,61% 5,99% 8,35% 13,13%

Average 10,41% 7,25% 7,68% 10,96% 6,15% -1,34% 2,75% 6,55%

Median 3,19% 2,11% 2,61% 4,39% 2,39% 0,40% 1,08% 2,84%

Lower quartile 0,29% -0,07% 0,29% 0,63% 0,07% -10,66% -3,18% 0,05%

Lower decile -7,67% -11,54% -8,95% -4,32% -11,18% -27,89% -16,91% -11,02% Source: Own calculation

In 2011 for ROE the situation in Slovak agriculture was following: - 10% of the best enterprises regarding the ROE had the profitability 29,53 % and

higher (upper decile) - 25% of the best enterprises regarding the ROE had the profitability 13,13 % and

higher (upper quartile) - The average of ROE in 2011 was 6,55 %. - 50% of the enterprises had ROE to 2,84 % and and 50% of enterprises, more than

2,84 % (median). - 25% of the enterprises with the weakest profitability had ROE less than 0,05 %

(lower quartile). - 10% of the enterprises with the weakest profitability had ROE less than -11,02 %

(lower decile). Percent returns of ROE are better than by ROI. This somewhat better result is due to the company’s greater use of debt. The extent to which a firm uses debt financing, or financial leverage, has three important implications (Brigham-Houston, 2003): (1) By raising funds through debt, stockholders can maintain control of a firm while

limiting their investment. (2) Creditors look to the equity, or owner-supplied funds, to provide a margin of

safety, so the higher the proportion of the total capital that was provided by stockholders, the less the risk faced by creditors.

(3) If the firm earns more on investments financed with borrowed funds than it pays in interest, the return on the owners’ capital is magnified, or “leveraged.”

Indebtedness of agricultural farms reaches in average 35 %. In accordance with an average Slovak company, which indebtedness is 75 %, and in accordance with direction value 50 % it is still under the tolerable value. Lower indebtedness of agricultural farms

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results from specific factors of agricultural basic industry. These factors are land and climatic conditions, seasonality of production, lower profit margin, and long cycle of production. (Čierna Z., Serenčéš, P., Bartová, S., 2008) Chart 2 shows the trend of increasing differences in ROE between individual enterprises.

ROE development Chart 2

Source: Own calculation, table 2 Throughout the period, we can see that the top 10% of companies (upper decile) can work with a ROE of more than 21.87%. Thus, the payback period is less than 5 years. Median values are significantly lower than the average values (with the exception of 2009), suggesting that between all the enterprises are some excellent businesses that improve an average of ROE. The median for the entire period is relatively low. Return on Sales (ROS) in Slovak agricultural enterprises

The last analysed ratio is Return on Sales. It is calculated by dividing net income (earning after taxes) by sales, gives the profit per unit (Euro) of sales. High costs, in turn, generally occur because of inefficient operations. However, low profit margin could be a result of heavy use of debt. Recall that net income is income after interest. Therefore, if two firms have identical operations in the sense that their sales, operating costs, and EBIT are the same, but if one firm uses more debt than the other, it will have higher interest charges. Those interest charges will pull net income down, and since sales are constant, the result will be a relatively low profit margin. In such a case, the low profit margin would not indicate an operating problem, just a difference in financing strategies.

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Thus, the firm with the low profit margin might end up with a higher rate of return on its stockholders’ investment due to its use of financial leverage (Brigham-Houston. 2003). In Table 3 are presented the results of ROS in year 2004-2011, which are assigned to six statistical classes.

Statistics for Return on Sales in Slovak agriculture Table 3

2004 2005 2006 2007 2008 2009 2010 2011

Upper decile 22,17% 19,21% 24,76% 25,80% 22,61% 17,12% 22,41% 22,31%

Upper quartile 9,82% 6,05% 7,37% 11,39% 9,11% 4,08% 6,71% 11,14%

Average 3,96% 0,65% 4,43% 6,34% 3,77% -7,27% -0,64% 2,77%

Median 2,87% 1,45% 2,10% 3,60% 2,11% 0,12% 0,88% 3,03%

Lower quartile 0,26% -1,37% 0,26% 0,64% -0,06% -21,50% -6,77% 0,05%

Lower decile -12,05% -23,75% -14,20% -6,56% -13,76% -42,99% -30,07% -17,46%

Source: Own calculation In 2011 for ROS we can conclude following: - 10% of the best enterprises regarding the ROS had the profitability 22,31 % and

higher (upper decile) - 25% of the best enterprises regarding the ROS had the profitability 11,14 % and

higher (upper quartile) - The average of ROS in 2011 was 2,77 %. - 50% of the enterprises had ROS to 3,03 % and and 50% of enterprises, more than

3,03 % (median). - 25% of the enterprises with the weakest profitability had ROS less than 0,05 %

(lower quartile). - 10% of the enterprises with the weakest profitability had ROS less than -17,46 %

(lower decile). Chart 3 presents the development of ROS for the whole period. As can be observed, ROS values between the lower and upper quartile, ranged from 0.05% (in 2011) to 11.39 % (in 2007). Exceptions are the years 2005, 2008, 2009 and 2010, when values of the lower quartile fell into negative numbers, with the lowest value in 2009, up at -21.50%.

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Return on Sales development Chart 3

Source: Own calculation, table 3 CONCLUSION Ratio analysis is used by three main groups: (1) managers, (2) credit analysts and (3) stock analysts, who are interested in a company’s efficiency, risk, and growth prospects. The benchmarking setup makes it easy for management to see exactly where the company stands relative to its competition. The value of upper quartile profitability ratios in our analyses could be used as a benchmark for good enterprises for given year. For Slovak agricultural is typical:

• high volatility in all analysed profitability ratios, • in year 2009 are the worst values in all profitability ratios, • the values for year 2011 are very similar to years 2008 and 2006, too, • agriculture could be characterized as industry with low profitability.

Further research is needed to divide the set of enterprises to find out the reason for differences in profitability. Profitability ratios analysis has limitations, but used with care and judgment, it can be very helpful. REFERENCES

1. Brigham Eugene F., Houston Joel F. 2003. Fundamentals of Financial Management, 10th edition, South-Western College Pub, 2003. 843 p. ISBN: 0324664559

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2. Čierna, Z., Serenčéš, P., Bartová, S.: Vplyv zadĺženosti poľnohospodárskych firiem hospodáriacich v rôznych prírodných podmienkach na ich rentabilitu. In: Acta oeconomica et informatica, ročník 11., č. 1/2008, vedecký časopis pre ekonomiku a informatiku v poľnohospodárstve, SPU: Nitra, s. 18-23. ISSN 1335-2571

3. KASSAY, Š.: Podnik a podnikanie, Bratislava: VEDA, 2008, ISBN 978-80-224-1032-8. 4. SERENČÉŠ, Peter - SERENČEŠ, Roman - TÓTH, Marián a.i. 2010. Financie v

poľnohospodárstve. Nitra: Slovenská poľnohospodárska univerzita, 2010, 188 s. ISBN: 9788055204383

5. VLACHYNSKÝ, K. a kol.: Podnikové financie. Bratislava: Súvaha, 2006, s. 204. ISBN: 80-88727-15-4

Authors' details Ing. Tomáš Rábek, PhD., Department of finance, Faculty of Economics and Management, Slovak University of Agriculture in Nitra, Tr. A. Hlinku 2, 949 76 Nitra, tel.:0042137/6414140 e-mail: tomas.rabek@uniag.sk Ing. Marián Tóth, PhD., Department of finance, Faculty of Economics and Management, Slovak University of Agriculture in Nitra, Tr. A. Hlinku 2, 949 76 Nitra, tel.:0042137/6414146 e-mail: marian.toth@uniag.sk