Profit as a main factor in forecasting agricultural business development

Abstract

The essence and role of profit in forecasting the development of agricultural production are investigated in the article. The value of profit in modern conditions as an important driving force of the economy is determined and proved. It is revealed that forecasting the development of agricultural business is a set of studies of economic activities of the enterprise using appropriate sources of information, determining available reserves, analysing the results of activities and developing the necessary measures for efficient production. The DuPont model was used to analyse the impact of indicators on return on equity. It was found that the factor analysis of the profitability of own capital makes it possible to determine the impact of key factors on performance. Research has shown that return on equity depends on three factors: return on sales, asset turnover and the structure of advance capital. These factors summarize all aspects of financial and economic activities of the enterprise, their statics and dynamics. Based on the factor model, the possibilities of quantitative and qualitative growth of the basic economic indicators of activity of the agricultural enterprise, which are expressed in underused reserves of production resources, are defined. Possible directions of increasing the company’s profit in modern conditions have been studied, among which the main ones may be: growth of production and sales volumes, optimization of production and sales costs and improvement of its quality.