Financial analysis in dairy farming

This study aimed to present a financial analysis of the activity in a dairy farming company looking for solutions to increase efficiency and profitability. The study presents. the evolution of assets and liabilities as well as costs, incomes and gross and net profit for Pantelimon Agroindustrial Joint Venture Commercial Company, the most important milk supplier for Bucharest market. It also comments the statement of financial performances in dairy farming by means of the specific financial ratios according to the modem methodology. The data were collected from Balance Sheet and Profit and Loss Account ended at December 31, the years 2000,2001 and 2002. The company is facing serious financial problems: a decrease of sales, a slight cash flow and solvency. In order to use more efficiently its assets and capital, the company has to increase milk production, to assure better, feeding conditions, to correlate better the inventory to the production level and to optimize production costs, mainly operating costs in close relationship to milk production and the number of dairy cows. Clients as well as suppliers have to be carefully selected so that cash flow to be continuously assured and the firm solvency to allow it to pay the debts.