Development of selected financial indicators for agricultural enterprises in the Slovak Republic

Abstract

Except of 2001 and 2002, the agriculture has produced losses of SKK 38.8 billion over the entire process of transformation. The losses in agriculture were caused by major disparities between the price of supplies to agriculture and prices of agricultural products, plus the restrictive subsidy and loan policy adopted in the early years of the economic reform. The economic situation has improved over the last two years. This was caused by the increase in subsidies, as well as by the continuing restructuring process (sales and liquidation of dubious assets, optimised production), reduction in numbers of loss-making enterprises, by growth and increase in efficiency of production and due to a substantial increase in earnings of many partnerships. However, even despite the positive trends current financial position of most agricultural enterprises does not meet the requirements for development in agriculture, with the rate of TFA (tangible fixed assets) depreciation achieving 50% (of that, depreciation of machinery stands at 70%). The earnings are moderate even in profit making enterprises, with 75% of those enterprises making only up to SKK 1.5 million in earnings.