Return on Equity in Dairy Farms from Selected EU Countries: Assessment Based on the DuPont Model in Years 2004–2020
The European Union dairy sector plays a significant role in supplying dairy products to consumers all over the world. The aim of this study was to examine changes in the return on equity as one of the main financial indicators determining the economic viability of EU dairy farms in the years 2004–20...
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| Format: | Article |
| Language: | English |
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MDPI AG
2023-07-01
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| Series: | Agriculture |
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| Online Access: | https://www.mdpi.com/2077-0472/13/7/1403 |
| _version_ | 1797590647900733440 |
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| author | Andrzej Parzonko Anna Justyna Parzonko Piotr Bórawski Ludwik Wicki |
| author_facet | Andrzej Parzonko Anna Justyna Parzonko Piotr Bórawski Ludwik Wicki |
| author_sort | Andrzej Parzonko |
| collection | DOAJ |
| description | The European Union dairy sector plays a significant role in supplying dairy products to consumers all over the world. The aim of this study was to examine changes in the return on equity as one of the main financial indicators determining the economic viability of EU dairy farms in the years 2004–2020. The analysis based on the DuPont model was used to determine the main drivers of return on equity in dairy farms from the five studied EU countries. The research results show that (1) the lowest return on equity in the years 2004–2020 was calculated for average farms from the Netherlands, and the reason for this phenomenon was the use of significant assets in the production, mainly resources that are very expensive in the Netherlands—land and human labor; (2) the highest return on equity was characteristic of dairy farms from France, and the factor strongly determining the favorable value of this ratio was the high degree of financing assets with low-interest loans and credits; (3) despite the lowest production potential and small scale of milk production, average Polish farms in the years 2004–2020 were characterized by a relatively high return on equity, which ranged from 4.97% to 14.9%. |
| first_indexed | 2024-03-11T01:24:26Z |
| format | Article |
| id | doaj.art-5ce0e061886240e38f1f54e2f754ddac |
| institution | Directory Open Access Journal |
| issn | 2077-0472 |
| language | English |
| last_indexed | 2024-03-11T01:24:26Z |
| publishDate | 2023-07-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Agriculture |
| spelling | doaj.art-5ce0e061886240e38f1f54e2f754ddac2023-11-18T17:53:22ZengMDPI AGAgriculture2077-04722023-07-01137140310.3390/agriculture13071403Return on Equity in Dairy Farms from Selected EU Countries: Assessment Based on the DuPont Model in Years 2004–2020Andrzej Parzonko0Anna Justyna Parzonko1Piotr Bórawski2Ludwik Wicki3Department of Economics and Organization of Enterprises, Faculty of Economics, Institute of Economics and Finance, Warsaw University of Life Science SGGW-Warsaw, 02-787 Warszawa, PolandDepartment of Tourism, Social Communication and Consulting, Faculty of Economics, Institute of Economics and Finance, Warsaw University of Life Science SGGW-Warsaw, 02-787 Warszawa, PolandDepartment of Agrotechnology and Agribusiness, Faculty Agriculture and Forestry, University of Warmia and Mazury in Olsztyn, 10-719 Olsztyn, PolandDepartment of Economics and Organization of Enterprises, Faculty of Economics, Institute of Economics and Finance, Warsaw University of Life Science SGGW-Warsaw, 02-787 Warszawa, PolandThe European Union dairy sector plays a significant role in supplying dairy products to consumers all over the world. The aim of this study was to examine changes in the return on equity as one of the main financial indicators determining the economic viability of EU dairy farms in the years 2004–2020. The analysis based on the DuPont model was used to determine the main drivers of return on equity in dairy farms from the five studied EU countries. The research results show that (1) the lowest return on equity in the years 2004–2020 was calculated for average farms from the Netherlands, and the reason for this phenomenon was the use of significant assets in the production, mainly resources that are very expensive in the Netherlands—land and human labor; (2) the highest return on equity was characteristic of dairy farms from France, and the factor strongly determining the favorable value of this ratio was the high degree of financing assets with low-interest loans and credits; (3) despite the lowest production potential and small scale of milk production, average Polish farms in the years 2004–2020 were characterized by a relatively high return on equity, which ranged from 4.97% to 14.9%.https://www.mdpi.com/2077-0472/13/7/1403EU countriesdairy farmsreturn on equityDuPont model |
| spellingShingle | Andrzej Parzonko Anna Justyna Parzonko Piotr Bórawski Ludwik Wicki Return on Equity in Dairy Farms from Selected EU Countries: Assessment Based on the DuPont Model in Years 2004–2020 Agriculture EU countries dairy farms return on equity DuPont model |
| title | Return on Equity in Dairy Farms from Selected EU Countries: Assessment Based on the DuPont Model in Years 2004–2020 |
| title_full | Return on Equity in Dairy Farms from Selected EU Countries: Assessment Based on the DuPont Model in Years 2004–2020 |
| title_fullStr | Return on Equity in Dairy Farms from Selected EU Countries: Assessment Based on the DuPont Model in Years 2004–2020 |
| title_full_unstemmed | Return on Equity in Dairy Farms from Selected EU Countries: Assessment Based on the DuPont Model in Years 2004–2020 |
| title_short | Return on Equity in Dairy Farms from Selected EU Countries: Assessment Based on the DuPont Model in Years 2004–2020 |
| title_sort | return on equity in dairy farms from selected eu countries assessment based on the dupont model in years 2004 2020 |
| topic | EU countries dairy farms return on equity DuPont model |
| url | https://www.mdpi.com/2077-0472/13/7/1403 |
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