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Differences of Financial Management Strategy of Central European and Russian Milk Processors

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  • Špička, Jindřich
  • Kontsevaya, S. R.

Abstract

The aim of this article is a detailed investigation of financial performance of milk processing companies of Central Europe and the Russian Federation before the Russian embargo. An investigated object is a data base of accounting reports of 5 countries over the period of 2009 – 2013. The number of selected companies is 370. The article also involves a short review of the dairy industry condition. In order to compare financial performance of two regions 4 types of criteria i.e. profitability ratios, turnover ratios, liquidity and capital structure were implemented. The differences between the Visegrad group and the Russian Federation were tested through Kolmogorov-Smirnov test at the significance level of 0.05. The main difference between the financial performances is the following: profitability (ROCE) of Russian companies is 3 times higher than in the Central Europe, stock turnover ratio is 2 times lower in the Russian Federation, and credit period is 4 days shorter. Generally speaking, the key difference is higher profitability of Russian companies which may be associated with reduced cost component, different technology of production of dairy products as well as with different capital structure.

Suggested Citation

  • Špička, Jindřich & Kontsevaya, S. R., 2016. "Differences of Financial Management Strategy of Central European and Russian Milk Processors," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 8(1), pages 1-14, March.
    • Handle: RePEc:ags:aolpei:233970
    DOI: 10.22004/ag.econ.233970
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    References listed on IDEAS

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    1. Perekhozhuk Oleksandr & Hockmann Heinrich & Fertő Imre & Bakucs Lajos Zoltán, 2013. "Identification of Market Power in the Hungarian Dairy Industry: A Plant-Level Analysis," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 11(1), pages 1-13, January.
    2. Špička, Jindřich, 2015. "The Efficiency Improvement of Central European Corporate Milk Processors in 2008 - 2013," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 7(4), pages 1-14, December.
    3. Nicholson, Charles F. & Stephenson, Mark W., 2006. "Financial Performance and Other Characteristics of On-Farm Dairy Processing Enterprises in New York, Vermont and Wisconsin," Research Bulletins 121583, Cornell University, Department of Applied Economics and Management.
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    Cited by:

    1. Mikhail Krivko & Luboš Smutka, 2020. "Trade Sanctions and Agriculture Support in Milk and Dairy Industry: Case of Russia," Sustainability, MDPI, vol. 12(24), pages 1-17, December.

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