Impact of the Influence Factors for the Operating Profit of Companies from Romanian Agri-Business Sector

Abstract

Abstract The objective of the study is to assess the impact of the influence factors for operating profit obtained by Romanian agriculture companies that have accessed bank loans in two consecutive years with major differences in results. The analysis was done for the year 2019 which was a very good one in term of production at national level and 2020 when the agriculture activity was affected by severe drought. The influence factors taken in consideration are turnover, equity and interest expenses. The purpose is to determine where a company is earning its profits or where is losing money and to predict the movement of the financial results considering that internal or external factors can change substantially. The research was carried out on a sample of 2220 companies from the Romanian agri-business sector. The size of the sample differentiates the study within the specialized literature. The relationship between variables was determined using a descriptive quantitative method and the multiple regression test using the SPSS software. The specialized literature is dominated by studies in which indicators are used in the form of rates, but the present study only uses indicators in absolute values. The operational income depends on the operational revenues and costs, but it is more important to observe the impact factors which can reflect the behavior of the shareholders as the level of equity or the interest expenses which can be influenced by external factors like inflation. According with the results obtained, the interest expenses have a significant influence on the operating profit and the negative effect can be amplified by decreases in turnover or equity. The effect of this relationship should be anticipated especially in the recession periods of the economy when the decrease in turnover can appear at the same time with the increase in interest cost.