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9
Balcerak Marek1, Wojtyra Bozena1, Michal Gagucki2 ©
1Warsaw University of Life Sciences, Faculty of Animal Sciences Agricultural Market Agency
EFFECT OF THE RESTRUCTURING ON ECONOMIC RESULTS AND THE DEBT OF CHOSEN APA COMPANIES - WARSAW
Abstract
Basic aim of restructuring of state agricultural companies is an improvement of economic results and a reduction in the debt. In current study the assessment of changes of the profitability and debts were evaluated in 4 chosen Companies of the Animal Husbandry of an Agricultural Market Agency of the in 1997 - 2003. Analysis shown decrease of economic results of examined companies.
All companies are profitable but beneficial are changes happening only in 1 of examined companies. Results shown great increase of the debt at all examined objects. Level of obligations of companies in years 1997-2003 grows, what is supplying to the limitation of the participation of the shareholders' equity in estate financing even about 14.5 %.
Keywords: effectiveness, restructuring, economic results, debt.
Introduction
System changes in Poland in the end of the 80' of the last age contributed for the restructuring of enterprises of the public sector. The first years of free market mechanisms activity, the price unstability, growing charging interest credit led already in 1992 r to credit rating loss about 70 % functioning in this time farms of the public sector (Kulawik, Tkaczyk 1994). In most cases implementation of market economy principles contributed to liquidation of many households of the public sector which gain positive economic effects in conditions of the centrally planned economy.
Situation of state-owned farms current was complicated by the law rules. Structural transformations became possible just in 1991. when the act about managing agricultural fixed properties of treasury was passed. (Zi^tara 1993). When act on the power higher mentioned APA took over constructing enterprises among others to the source regarded as farm activity in a government order 11 April 2003 r. in the matter of determining state enterprises about special meaning for the economy, regarded for particularly important for biological progress (O. J. 1991 No. 107. pos. 464).
With possessions developing after state-owned farm from 1991 took Agricultural Property Agency. APA's actions, in most cases, were early restructurisation of seized companies and preparing them for the process of privatization (Guzewicz et al. 2006). In resources of the Agency were the best farm companies in Poland, which from the moment of seizing were functioning as companies of the APA.
© Balcerak Marek, Wojtyra Bozena, Michal Gagucki, 2008
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This article tries to determine the effectiveness of action of Agency in relation to beloveds of special companies in the animal production. The assessment of companies on the basic analysis of changes of the profitability and the debt was examined.
Task, the aim of the article
The aim of study was assessment of the effectiveness of the restructuring in chosen Centres of Breeding of APA specializing in the dairy cows.
On the basis of the numerical material reached from the Agricultural Property Agency - Warsaw changes of economic indicators and the debt in 1997-2003 was estimated.
Material and methods
In the basic analysis are:
- net result of PLN,
- participation of non-current obligations in liabilities %,
- participation of current obligations in liabilities %,
- profitability ratio of the estate % (profit net/value of assets),
- indicator of the total debts % (total obligations/assets),
- indicator of the participation of the shareholders' equity in financing the
estate % (capital + reserves/total assets with)
- indicator of the shareholders' equity debt % (total obligations+total
reserves/capital+ reserves).
According to conditions based on numerical material depicting the economic situation of examined companies names of companies were replaced by letters of the alphabet.
Results and researches
Analyzed companies are functioning as units of the treasury since 1993. Highly efficient dairy cattle were held in all examined objects. Examined individuals are performing the important part in fulfilling the domestic demand for breeding material and the realization of programs of improving breeding.
Analysis of economic results shows that all examined objects made a profit. However increase of the profit was observed in case of 2companies. Analysis of profitability ratios of resulted by decreasing of the economic situation. Guzewicz et al. (2006) analysing the economic-financial situation of 158 households observed similar tendencies.
In three companies decrease of the profitability ratio of estate was observed. According to Siudka (2004) if there is more beneficial maximum value of the indicator the situation of the company will be much profitable. Observed tendencies shows degeneration of the economic situation of examined companies. The discussed indicator decreased even about 6.3% (in company C).
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ROA indicator increase was observed only in the company D (from 3.28 upto 3.81). Results of remaining companies have to be interpretated as limitation of the company ability to generate income. The low level of the discussed indicator can attest to the incongruity of the estate in relation to size of activity (Table 1).
Table 1.
Change of economic-financial results of examined companies (Source: APA -
Warsaw)
Year Company A Company B Company C Company D
Balance sum PLN (in thousends)
1997 3 699,20 3 542,70 11 645,80 15 567,50
2003 8 947,30 8 213,70 25 862,04 32 286,64
Shareholders' equity and reserves PLN (in thousends)
1997 3 281,30 3 019,90 10 714,00 13 095,10
2003 7 092,71 5 804,40 23 276,64 25 601,55
Non-current obligations PLN (in thousends)
1997 - 180,80 200,00 1 346,10
2003 - 544,70 1 671,90 1 800,00
Current obligations PLN (in thousends)
1997 417,90 339,90 690,90 1 126,30
2003 1 854,59 1 677,00 913,48 3 966,58
Net profit PLN (in thousends)
1997 29,40 155,00 1 688,80 510,90
2003 28,87 34,50 2 119,60 1 231,20
Participation of non-current obligations in liabilities %
1997 - 5,10 1,72 8,65
2003 - 6,63 6,46 5,58
Participation of current obligations in liabilities %
1997 11,30 9,59 5,93 7,23
2003 20,73 20,42 3,53 12,29
Profitability ratio of the estate %
1997 0,79 4,38 14,50 3,28
2003 0,32 0,42 8,20 3,81
Indicator of the total debts %
1997 11,30 14,70 7,65 15,88
2003 20,73 27,05 10,00 17,86
Indicator of the partici] pation of the shareholders' equity in financing the estate %
1997 88,70 85,24 92,00 84,12
2003 79,27 70,67 90,00 79,29
Indicator of the shareholders' equity debt %
1997 12,74 17,24 8,32 18,88
2003 26,15 38,28 11,11 22,52
Analysis of changes of beloveds of companies confirms decreasing of the situation of discussed objects. In all examined companies a sum of obligations rose. Main risk for company are non-current liabilities. Only company A didn't own charges of this type. In the case of company B and C increase of the participation of debts in liabilities were observed. Analysis of changes of the indicator of the total
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debts allowed to determine the participation of other financing in the company's estate. The discussed indicator has increased in all examined individuals from 1.98% upto 12.35%. The great increase of the indicator might give evidence of risk of the business activity grow.
The reduction of indicator of the participation of the shareholders' equity in financing the estate can prove the degeneration of the economic situation in examined objects. Particularly the disadvantage is appearing in the company B where the rate decreased by 14.5%. Indicator of the shareholders' equity determined the relation of the invested outside capital in the attitude to the shareholders' equity. In spite of the increase of the participation of obligations to own sources of financing activity it is possible to prove that results are decreasing but it isn't a danger situation for financial credibility of companies. Siudek (2004) determined that the relation of obligations should take out into shareholders' equities and reserves in the case of large companies 1:1, so even 38 % indicator (company B) it is possible to recognized as relatively low.
Conclusions
1. Restructuring of withdrawn belongings Centres of Breeding of APA specializing in the dairy cows didn't contribute to the improvement of economic results and reduction of debts of companies.
2. In the examined period all companies made a profit. Increase of financial result in case of 2 companies was observed. In company C profits were increased from 1688.80 thousends PLN upto 2119.60 thousends PLN whereas in company D from 510 thousends PLN upto 1231.20 thousends PLN.
3. Company D achieved best economic results. The profitability ratio of the estate was in identical level. Reduction of value of the indicator even over 6% in remaining companies can prove the limitation of the ability of companies to generate profit.
4. Level of obligations in examined companies in years 1997-2003 grows, what is supplying to the limitation of the participation of the shareholders' equity in financing the estate even by 14.5%. Relations of the debt to shareholders' equities don't create credit credibility of companies.
References:
1. Dz.U.nr 107. poz 464, 1991 „Ustawa z dnia 19 pazdziernika 1991 o gospodarowaniu nieruchomosciami rolnymi Skarbu Panstwa"
2. Guzewicz W, Kagan A, Zdzieborska M, 2006: Procesy dostosowawcze w
wielkoobszarowych gospodarstwach popegeerowskich (lata 2002-2005), IERiGZ PIB Warszawa
3.Kulawik J. Tkaczyk E, 1994: „Analiza finansowa bylych gospodarstw panstwowych" IERiGZ Warszawa
4.Siudek T, 2004: „Analiza finansowa podmiotow gospodarczych" SGGW Warszawa
5.Zietara W 1993 Zasady restrukturyzacji mienia po PGR Wyd ODR w Boninie
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