INPROFORUM 2016

Specifics and Financial Health Assessment in Agriculture
Kristýna Nývltová

Language: en
Last modified: 2017-03-13

Abstract


There are many methods for the financial health assessment of a company; the most utilized include statistical methods that evaluate the business from multiple perspectives simultaneously. Since each model has been formed under different conditions and on a different date, it may not be suitable for the assessment of all businesses. In this article six models are assessed, some designed for the field of agriculture. The selected models are IN99, IN05, the Gurčík-index, the CH-index, the Taffler index and the Řezbová OP model. In the analysis, their reliability in identifying healthy companies and businesses with financial problems are compared. None of the models have achieved good results in both analyses simultaneously, which leads to the question: Why is this so? The cause may be the specifics of agriculture that are not taken into account in the models and thus they can influence the outcome of the assessment. The specifics are the value of the land that is not determined by its quality, but by the locations, the value of the leased land, which is not included in the value of assets, as well as the work of nature, the value of the subsidies, which affects the amount of assets and the net profit or costs of fertilizer, which has an effect even for three years. Is there the ability to include these specifics into some of the methods of assessment and thus achieve greater reliability and the efficiency of allocation not only of private investors’ resources but also the subsidies? This will be the subject of the further analysis.

Keywords


Financial Health Assessment; Agriculture; Risk; Explanatory Power

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