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Analysis and Evolution of Profit and Net Profit Margin in the Pharmaceutical Industry in Romania

In: International Conference Innovative Business Management & Global Entrepreneurship (IBMAGE 2020)

Author

Listed:
  • Izabela Diana Hada

    („1 Decembrie 1918†University of Alba Iulia, România)

  • Mihaela Maria Mihalcea

    („1 Decembrie 1918†University of Alba Iulia, România)

Abstract

Profit is considered to be an important source of financing the financial activity of any economic entity. The main purpose of any activity is to make a profit. As a significant part of equity, employees can be remunerated from profit (as part of their profit share) and also shareholders/associations can be also remunerated in the form of distributed dividends. The appreciation of financial performance is closely linked to the ability to make a profit. In this sense, the main purpose of this article is to analyze and describe the evolution of profit and net profit margin, as an indicator of performance appreciation, for economic entities in the field of manufacture of basic pharmaceutical products in Romania. The basis of the analysis is the annual financial statements for a number of 46 entities for the period 1999-2018 (20 years). The results of the research show that, from the point of view of the evolution of the number of entities that register profit, we are witnessing an increase from 12 entities in 1999 to 23 entities in 2018. However, referring to the increase in the number of entities from a total of 17 in 1999 to 46 entities in 2018, we notice that in 2018 only half of them register a profit. The other half falls into the category of less performing entities due to losses. However, after a period of financial decline (2008-2009) we see a gradual increase in profits recorded by economic entities in the pharmaceutical industry in Romania.

Suggested Citation

  • Izabela Diana Hada & Mihaela Maria Mihalcea, 2020. "Analysis and Evolution of Profit and Net Profit Margin in the Pharmaceutical Industry in Romania," Book chapters-LUMEN Proceedings, in: Marcin Waldemar STANIEWSKI & Valentina VASILE & Adriana Grigorescu (ed.), International Conference Innovative Business Management & Global Entrepreneurship (IBMAGE 2020), edition 1, volume 14, chapter 6, pages 70-81, Editura Lumen.
  • Handle: RePEc:lum:prchap:14-06
    DOI: https://doi.org/10.18662/lumproc/ibmage2020/06
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    References listed on IDEAS

    as
    1. Ana CARP & Maria MIREA, 2017. "Profitability As The Form Of Communication Of The Value Of An Entity That Works For Profit," Romanian Statistical Review Supplement, Romanian Statistical Review, vol. 65(6), pages 192-199, June.
    2. Florina-Adriana STĂNICĂ & Adina Ionela STRĂCHINARU & Vasile ILIE, 2015. "Influences on the profitability of the pharmaceutical industry in Romania," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(Special(I), pages 97-105.
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    1. Izabela Diana Hada, 2020. "Analysis and Evolution of Profitability in the Pharmaceutical Field in Romania," Book chapters-LUMEN Proceedings, in: Marcin Waldemar STANIEWSKI & Valentina VASILE & Adriana Grigorescu (ed.), International Conference Innovative Business Management & Global Entrepreneurship (IBMAGE 2020), edition 1, volume 14, chapter 55, pages 744-757, Editura Lumen.

    More about this item

    Keywords

    financial performance; profit; revenue; net profit margin; pharmaceutical field;
    All these keywords.

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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