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Multivariate Analysis Of Profitability Indicators For Selected Companies Of Croatian Market

Author

Listed:
  • Perisa, Ana

    (Consultant Intern, PricewaterhouseCoopers Consulting Ltd., Zagreb)

  • Kurnoga, Natasa

    (Faculty of Economics and Business, University of Zagreb, Croatia)

  • Sopta, Martina

    (Faculty of Economics and Business, University of Zagreb, Croatia)

Abstract

In this paper, the profitability indicators are analysed for the first hundred companies of the Croatian market, which are classified according to the net profit. The profitability indicators included in the analysis are the following: EBIT margin, EBITDA margin, net profit margin, return on assets (ROA), return on invested capital (ROI) and return on capital employed (ROCE). By implementing the factor analysis, six chosen profitability indicators have been reduced to two factors, thus solving the multicollinearity problem, which is one of the prerequisites for the cluster analysis. For two extracted factors, the factor scores are calculated and used in the following cluster analysis. By implementing the cluster analysis, selected companies are grouped into clusters according to their similarity in accomplished results that are measured by profitability indicators. The hierarchical and non-hierarchical cluster analyses are conducted and resulted into two clusters where ten companies were in the first cluster, while the other ninety were in the second cluster.

Suggested Citation

  • Perisa, Ana & Kurnoga, Natasa & Sopta, Martina, 2017. "Multivariate Analysis Of Profitability Indicators For Selected Companies Of Croatian Market," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 8(3), pages 231-242.
    • Handle: RePEc:ris:utmsje:0217
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    References listed on IDEAS

    as
    1. Ayşe İmrohoroğlu & Şelale Tüzel, 2014. "Firm-Level Productivity, Risk, and Return," Management Science, INFORMS, vol. 60(8), pages 2073-2090, August.
    2. ¼ubica Lesáková, 2007. "Uses and Limitations of Profitability Ratio Analysis in Managerial Practice," Proceedings-5th International Conference on Management, Enterprise and Benchmarking (MEB 2007),, Óbuda University, Keleti Faculty of Business and Management.
    3. Novy-Marx, Robert, 2013. "The other side of value: The gross profitability premium," Journal of Financial Economics, Elsevier, vol. 108(1), pages 1-28.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Róbert Štefko & Petra Vašaničová & Sylvia Jenčová & Aneta Pachura, 2021. "Management and Economic Sustainability of the Slovak Industrial Companies with Medium Energy Intensity," Energies, MDPI, vol. 14(2), pages 1-15, January.

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    More about this item

    Keywords

    factor analysis; cluster analysis; profitability indicators; multivariate analysis; profit theories;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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