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The Influence of the Company Size, Financing Structure and Assets Efficiency on the Positive Net Result in the Agri-Business Sector

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  • Moise Dumitru-Florin

    (Bucharest University of Economic Studies, Bucharest, Romania)

Abstract

The net profit is the primary goal of every business focused on commercial activity. It is the source of further company’s development, and it is followed by all the stakeholders. Its relative size is the basis of the shareholders return through dividends. This paper studies the influence of several factors as the company size, financing structure or assets efficiency on the net profit for the companies with positive results. The data was analyzed for a period of 12 years, from 2009 until 2020. The sample consists in 3109 companies specialized in vegetal nutrition in the Romanian Agri-sector. The company size is defined by the turnover, the financing structure is represented by the level of equity, long-term debts and short-term debts and the return on assets reflects the assets efficiency. Each factor is influencing in a different manner the net profit of the companies. The hypothesis of the study refers to the relationship between net profit and the above factors. A correlation analyses was performed using SPSS software for determining the strength and directions between variables, combined with a descriptive analyses and reliability tests as Cronbach’s and F. The results show that there is a high positive correlation with equity, a moderate positive with turnover and short-term debts, low positive with long-term debts and negligible correlation with return on assets. The conclusion is that the shareholders behavior reflected in the dividend policy can have a significant influence on the relative size of the net profit.

Suggested Citation

  • Moise Dumitru-Florin, 2023. "The Influence of the Company Size, Financing Structure and Assets Efficiency on the Positive Net Result in the Agri-Business Sector," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 17(1), pages 524-536, July.
    • Handle: RePEc:vrs:poicbe:v:17:y:2023:i:1:p:524-536:n:29
    DOI: 10.2478/picbe-2023-0050
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    References listed on IDEAS

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    1. Alfaro, Laura & Asis, Gonzalo & Chari, Anusha & Panizza, Ugo, 2019. "Corporate debt, firm size and financial fragility in emerging markets," Journal of International Economics, Elsevier, vol. 118(C), pages 1-19.
    2. Akindayomi, Akinloye & Amin, Md Ruhul, 2022. "Does business strategy affect dividend payout policies?," Journal of Business Research, Elsevier, vol. 151(C), pages 531-550.
    3. Smith, Geoffrey Peter, 2022. "Predicting the debt-equity decision," Finance Research Letters, Elsevier, vol. 48(C).
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