Internal profitability determinants of organic production companies in Republika Srpska

Abstract

This paper aims to investigate the value and influence of internal profitability determinants on profitability measured by return of assets of organic production companies in Srpska. For this purpose, abbreviated balance sheets of 21 companies engaged in this type of agricultural production in the period from 2014 to 2021 were provided and the regression model was defined. The results showed that the internal determinants of profitability, i.e. company age, liquidity ratio, debt measured by financial leverage, sales growth and capital turnover have a significant impact on profitability. While debt has a negative correlation, other determinants have a positive correlation. Research limitations refer to the sample because it does not include small-scale family farms, which are not required to submit financial reports.