Financial performances of Romanian wood industry companies

• Author: Deari F., Dinca, G.
• Pages: 147-158

Bulletin of the Transilvania University of Braşov

Series V: Economic Sciences • Vol. 8 (57) No. 1 - 2015

Financial performances of Romanian wood industry

companies

Fitim DEARI1, Gheorghiţa DINC2

Abstract: The purpose of this study is to analyze financial performances of 40 selected

Romanian companies for the 2009-2013 period. The selected companies operate in the wood

industry and we have used panel type data to perform a quantitative analysis. We have found

that companies with higher total assets, current assets, average inventory and accounts

receivables have higher sales. It seems larger companies with higher total and current assets

(especially accounts receivable) are more profitable than their counterparties. Similarly,

larger companies with lower current assets, average inventory and accounts receivable have

lower assets turnover. Companies with lower average inventory have higher ROA and assets

turnover. Larger companies have more total and current assets, net profit, average inventory

and accounts receivable than their counterparties, however they seem to display lower assets

turnover and current to total assets ratio. Companies with higher current to total assets ratio

have higher assets turnover and ROA.

Key-words: ratios, correlation, financial performance, wood industry

1. Introduction

“Accounting “is not an end in itself,” (SFAC No.1), but an information system that

measures, processes, and communicates financial information about an identifiable

economic entity” (Needles and Powers, 2005, p. 4). Accounting prepares financial

statements to communicate them to internal and external users or to decision

makers. Furthermore, accounting information users employ financial statements to

analyze past or coming decisions. Financial statements are products of the

accounting process and serve as data source for financial analysts combined with

other data and information sources.

The balance sheet can be viewed as a photo, whereas the other three

statements (the income statement, the statement of owner’s equity and the statement

of cash flows) can be viewed as motion pictures. Balance sheet denotes the balance

1 Faculty of Business and Economics, South East European University Tetovo, Republic of

Macedonia, f.deari@seeu.edu.mk

2 Transilvania University of Brasov, gheorghita.dinca@unitbv.ro