Analysis on key financial data of Hungarian dairy product manufacturing enterprises

Abstract

After several years of decline, dairy herd and milk production have started to rise from 2011. Considering the first growth phase, in current article we analysed the enterprises operating in the dairy product manufacturing sector in the period of 2012-2016. Among the principal financial indicators, we have chosen ROA and ROE to determine the general financial situation of the enterprises and analyse the changes in the five-year period. Based on the literature review we made our analysis by dimensions of enterprise size categories and regions. Income statement and balance sheet needed for calculating financial indicators of enterprises have been downloaded from EMIS. Enterprises involved in our analysis belonging to small, medium and large size category and mean representative sample as this sample covers 30% of the total population. Share of sample enterprises from key performance indicators is similar to the total population so we can consider our sample representative also in this respect. The average rate of ROA showed growth from 2012 to 2016 for all regions and the largest increase occurred in the Northern Great Plain. Moreover, this region experienced the strongest increase in the average export share (from 4% to 20%), but three regions showed some decrease. The average rate of ROE calculated for the Central-Hungarian region, however, declined. Total assets value of enterprises analysed increased in the five years under consideration, however, this growth is mainly due to the increase of assets of large enterprises. The share of large companies from the total assets rose by 7% during the five years (from 64% to 71%), while the share of small and medium sized enterprises fell. Considering small enterprises, the total value of the domestic sales revenue in 2016 declined by 30% below the level of 2012. In the first two years analysed, a significant recovery of export revenues was noted, the total value export sales revenues almost doubled from 2012 to 2014. Domestic sales revenues of medium sized enterprises in 2016 show only a small percentage difference compared to 2012, but the trend of export sales is similar to small companies. The increase of domestic and export sales revenue of large companies is slight but continuous. Indicators of ROA and ROE show dynamic increase for large companies during the five years. Medium sized enterprises also experienced growth, however, in the last the years considered there was a fall. ROA calculated for small enterprises became positive, but its value is volatile, while ROE clearly show a continuing decrease.