THE FINANCIAL SITUATION OF THE FOOD INDUSTRY IN POLAND IN COMPARISON WITH 2005 AND 2010

THE FINANCIAL STOWARZYSZENIE SITUATION OF THE EKONOMISTÓW FOOD INDUSTRY IN ROLNICTWA POLAND IN COMPARISON I AGROBIZNESU WITH 2005 IN 2010 Roczniki Naukowe tom XVII zeszyt 1 41 Joanna Florek, Joanna Stanisławska, Dorota Czerwińska-Kayzer Poznań University of Life Sciences THE FINANCIAL SITUATION OF THE FOOD INDUSTRY IN POLAND IN COMPARISON WITH 2005 AND 2010 PORÓWNANIE SYTUACJI FINANSOWEJ PRZEMYSŁU SPOŻYWCZEGO W LATACH 2005 I 2010 Key words: food industry, financial situation, financial ratios Słowa kluczowe: przemysł spożywczy, sytuacja finansowa, analiza wskaźnikowa Abstract. The aim of the article was to assess the financial situation of branches in the food industry in Poland in 2005 and 2010. This study was based on the unpublished statistics of the Central Statistical Office. The article used nine financial ratios to present and assess the financial situation of branches in the food industry sector. Their financial situation in comparison with 2005, slightly improved in 2010 both in terms of profitability and current asset management. The distribution of branches in the food industry indicated that a vast majority of them had a similar approach to the risk associated with borrowed capital used to finance their business activity and had a conservative trade credit strategy. Introduction The food industry is one of the major sectors of the national economy and industrial branches [Baourakis et al. 2002, Davies, Goldberg 1957]. Long-term transformations in the Polish food industry affected changes in production, property and entity structures, which favoured improvement in the competitive position of the industry on the Single European Market. Poland s accession to the European Union was a significant factor increasing the importance of the food industry. As a consequence, there was a remarkable boom in Polish foreign trade, which enabled Polish producers of agri-food products to gain a competitive advantage. As a result of market changes, the branch structure of the food industry was brought considerably closer to the structures of this industry in highly developed countries. This fact is also reflected by changes in the nutrition model and structure of the demand for food products. At present, the Polish food industry is a match for the producers of food and beverages from other countries of the European Union. Before accession, i.e. from 2000 to 2002, the rate of development in the food industry was slow, rising by 1.6% a year [Statistical Yearbook... 2001, 2003]. Poland s accession to EU structures created new possibilities for the food sector and simultaneously enforced the adjustment of mechanisms of the Polish food economy to the requirements of a common European market. According to the data of the Institute of Agricultural and Food Economics (National Research Institute), in 2003, the sold production of the sector increased by 7.7% on average and from 2004 to 2007 it increased by 6.3%. The gross added value generated by the Polish food industry is about EUR 7.5 billion, which constitutes more than 4% of GDP. This fact may also be confirmed by the share of the food industry in the sales value of the entire industry, which was nearly 24% in 2010. It is one of the highest shares in the industry among EU countries [Mroczek 2011]. The significant role of the food industry in Poland is also proved by its share in employment in 2005 nearly 417.6 thousand people were employed in the food industry. In spite of layoffs in 2010, 395 000 people were employed in the industry, i.e. 4.9% of all people employed in Poland. In 2005, 18 000 entities ran their businesses, whereas in 2010 there were 16 000 entities [Statistical Yearbook... 2005, 2011]. In the food industry, small entities, employing up to 9 people, accounted for about 65% of all entities in the food industry, whereas the percentage of large enterprises, employing 250 or more people, was

42 Joanna Florek, Joanna Stanisławska, Dorota Czerwińska-Kayzer systematically increasing. This trend was accompanied by an increasing scale of concentration. This is proved by the fact that more than 49% of the value from the sales of food and beverages came from large entities. The food industry feeds people and maintains market balance. Due to the huge importance of the food industry to the national economy, it is necessary to monitor the financial situation both in the entire sector and in its individual branches. Materials and Research method In order to assess the financial situation of the food industry, unpublished statistical data of the Central Statistical Office for 2005 and 2010 were used [Unpublished data 2006, 2011]. The source materials concerned the financial data from the branch system of the food industry sector according to the Polish Classification of Activities (PKD). The system enabled the assessment of 30 branches from the food industry sector altogether, including 25 branches of food production and 5 branches of beverage production. The article uses nine financial ratios to present and assess their financial situation. Table 1 shows the formulas of financial ratios applied in the study. Table 2 shows their values in the years under study. Table 1. The formulas of financial ratios applied in the study Tabela 1. Formuły wskaźników finansowych zastosowanych w pracy Name of ratio/nazwa wskaźnika Return on equity (ROE)/ Rentowność kapitału własnego(roe) [%] Return on sales (ROS)/ Rentowność sprzedaży (ROS) [%] Equity multiplier (ER)/Mnożnik kapitałowy (ER) Long-term debt ratio (LD)/ Wskaźnik zadłużenia długoterminowego (ZD) [%] Interest coverage ratio (ICR)/ Wskaźnik pokrycia odsetek (PO) Quick ratio (QR)/Wskaźnik płynności szybkiej (QR) Working capital cycle (WCC)/ Cykl kapitału obrotowego (CKO) Inventory cycle [days] (IC)/ Cykl zapasów (CZ) [dni] Accounts receivable cycle [days] (ARC)/Cykl należności (CN) [dni] Net profit Equity Net profit Sales income Total liabilities Equity Long-term liabilities Equity Net profit + Income tax + Credit interest Credit interest Current assets Inventory Short-term liabilities Working capital a Sales income Inventory Sales income Short-term receivables Sales income Formula/Formuła x 365 days x 365 days x 365 days Zysk netto Kapitał własny Zysk netto Przychody ze sprzedaży Pasywa ogółem Kapitał własny Zobowiązania długoterminowe Kapitał własny Zysk netto + Podatek dochodowy + Odsetki od kredytu Odsetki od kredytu Aktywa obrotowe Zapasy Zobowiązania krótkoterminowe Kapitał obrotowy a Przychody za sprzedaży Zapasy Przychody za sprzedaży Należności krótkoterminowe Przychody za sprzedaży x 365 dni x 365 dni x 365 dni a The working capital was calculated as the difference between current assets and short-term liabilities/kapitał obrotowy obliczono jako różnicę pomiędzy aktywami obrotowymi i zobowiązaniami krótkoterminowymi Source: own compilation based on [Gołębiowski, Tłaczała 2005, Sierpińska, Jachna 2004, Baourakis et al. 2002] Źródło: opracowanie własne na podstawie [Gołębiowski, Tłaczała 2005, Sierpińska, Jachna 2004, Baourakis i in. 2002]

THE FINANCIAL SITUATION OF THE FOOD INDUSTRY IN POLAND IN COMPARISON WITH 2005 IN 2010 43 Research results As results from the presented data, financial effectiveness measured both using the return on equity ratio (ROE) and the return on sales ratio (ROS), was higher in 2010 than in 2005. In the years under study, the return on equity in the branch system varied greatly 1. In 2005, in 50% of the branches, the ROE was equal or lower than 11.50% and in 2010 it was about 2% lower than in 2010. In 2005, enterprises producing beer and those producing malt had the highest return on equity - 37.80% and 27.65%, respectively. But in 2010, the highest return on equity could be observed in enterprises producing beer (55.61%) and in those producing prepared pet food (43.91%) see table 2. In 2005, a deficit was recorded only in one branch, i.e. in enterprises producing noodles and farinaceous products (-8.88%), but in 2010 in two branches, i.e. in enterprises producing prepared meals and dishes (-12.20%) and in those producing cider (1.90%). It is necessary to note that in the years under study, five branches, i.e. the enterprises producing beer, prepared feeds for farm animals 2, condiments and seasonings, bread, fresh pastry goods and cakes, meat and poultry meat products, were in the group of the most profitable branches, where the return on equity ratio was greater than the upper quartile (Tab. 2 and 3). As results from the correlation between the ratios, the return on equity is determined by return on sales, capital structure and asset turnover rate [Liesz 2002]. Of the above mentioned factors, this article included the following traits: return on sales and capital multiplier. As results from the data presented in Table 3, in both periods under study, both return on sales (ROS) and return on equity (ROE) exhibited a very high variation in the food industry. In 2005, in 25% of food industry branches, ROS was lower than or equal to 5.34%, whereas in 2010 it amounted to 2.72%. On the other hand, in 2005, in 25% of the branches, it was equal or greater than 5.34%, whereas in 2010 it was greater than 7.62%. As was observed in 2005, costs exceeded the sales income from the production of noodles and farinaceous products. The deficit was -3.80%. On the other hand, in 2010 the group of unprofitable branches included enterprises producing prepared meals and dishes (-1.41%) and those producing cider (-0.37%). By contrast, the highest return on sales could be observed in beer production (11.43%) in 2005 and in sugar production in 2010 (14.92%). Thus, it is possible to conclude that in the years under investigation, brewing and sugar industries led active price and cost control policies. This was particularly well visible in sugar factories, where in 2010 ROE was 21.00%, and ROS was 14.92%, whereas the capital multiplier amounted to 1.66. Another factor affecting the level of return on equity is financial leverage expressed with the capital multiplier. As results from the data presented in Table 3, in 2005 the ratio had medium variation and ranged between 1.73 and 3.34. On the other hand, in 2010 it ranged from 1.37 to 5.43. It is worth stressing that in 2005 in 25% of the branches, the capital multiplier was equal or greater than 2.54, and in 2010 it was equal or greater than 2.36. This means that in most branches of food industry, the debt level was not very high and in 2010, i.e. during the economic crisis, it was lower. This may point to the fact that Polish enterprises led a careful financial policy, which may have resulted from the experience of the 1990`s. This conclusion is also confirmed in the study conducted by Bieniasz et al. [2012], who claims that food enterprises in Poland have an optimal and safe share of liabilities in the financing of assets. In both years under study, i.e. in 2005 and 2010, the branch of processed and preserved potatoes had a low share of borrowed capital in the financial activity 1.78 and 1.49, respectively. In those years, the highest debt could be observed in branches producing prepared meals and dishes 3.34 and 5.43, respectively. The capital multiplier determines the level of long-term debt, which varied greatly in branches of the food industry during the periods under analysis. In 2005, debt of equity with long-term 1 The value of the coefficient of variation v < 10% means low variation, 10% v < 30% - medium variation, 30% v < 50% - high variation, and v > 50% - very high variation [Wysocki, Lira 2005]. 2 It is necessary to mention the fact that in 2007 the classification of branches in the Central Statistical Office changed and the branch of feeds production was divided into two categories, i.e production of pet feeds and production of feeds for farm animals. In 2010 the production of feeds for farm animals entered this class and the production of pet feeds was classified as Class I.

44 Joanna Florek, Joanna Stanisławska, Dorota Czerwińska-Kayzer Table 2. The ratios describing the financial situation in the branches of the food industry sector in Poland in 2005 and 2010 Tabela 2. Wskaźniki opisujące sytuację finansową branż sektora przemysłu spożywczego w Polsce w 2005 i 2010 roku Specification/Wyszczególnienie Ratios in 2005/Wskaźniki w 2005 roku Ratios in 2010/Wskaźniki w 2010 roku ROE ROS ER LD ICR QR WCC IC ARC ROE ROS ER LD ICR QR WCC IC ARC Processed and preserved meat/ Przetwarzanie i konserwowanie mięsa, 10.44 1.48 2.49 48.14 4.71 0.73-1.00 11.88 28.84 15.52 2.71 2.17 28.01 7.28 0.84 6.73 13.10 30.30 z wyłączeniem mięsa z drobiu Processed and preserved poultry meat/ Przetwarzanie i konserwowanie mięsa 12.12 1.27 2.96 52.93 4.39 0.72 1.09 14.58 30.88 13.06 1.58 2.61 35.03 5.00 0.90 10.04 13.22 34.81 z drobiu Meat and poultry meat products/ Produkcja wyrobów z mięsa, włączając 22.58 3.49 2.33 36.42 9.09 0.68-1.22 14.62 25.74 21.20 3.72 2.07 25.68 9.83 0.80 6.94 14.21 25.65 wyroby z mięsa drobiowego Processed and preserved fish, crustaceans and molluscs/ Przetwarzanie i konserwowanie 8.87 1.69 2.54 27.31 6.10 0.77 16.62 33.97 54.77 11.47 2.65 2.57 29.22 7.95 1.01 36.95 31.33 74.49 ryb, skorupiaków i mięczaków Processed and preserved potatoes/ Przetwarzanie i konserwowanie 15.19 5.43 1.78 11.74 9.87 1.39 64.35 28.74 49.53 7.99 4.91 1.49 3.00 9.45 1.30 70.67 31.45 79.47 ziemniaków Fruit and vegetable juices/produkcja soków z owoców i warzyw 7.59 3.04 2.05 15.87 5.52 0.60 21.62 63.35 56.00 7.93 3.13 2.81 53.01 5.07 0.58 10.60 79.57 77.42 Other processed and preserved fruit and vegetables/pozostałe przetwarzanie i 15.27 4.16 2.60 26.26 5.54 0.58 35.84 81.55 55.73 11.82 3.46 2.36 20.62 4.61 0.62 44.25 80.52 48.24 konserwowanie owoców i warzyw Oils and fats/produkcja olejów i pozostałych tłuszczów płynnych 20.49 4.90 2.90 4.04 3.53 0.33 22.84 118.30 42.65 0.00 0.00 2.30 20.81 2.45 0.49 25.65 68.54 31.41 Margarine and similar edible fats/ Produkcja margaryny i podobnych 11.56 3.26 1.92 4.87 6.53 0.74 47.14 66.38 46.61 15.84 7.19 1.37 6.08 546.68 1.47 106.42 78.86 33.07 tłuszczów jadalnych Dairy and cheese products/ Przetwórstwo mleka i wyrób serów 7.58 1.42 2.05 17.58 7.56 0.93 16.69 18.33 36.45 9.52 2.20 2.12 37.93 6.48 1.08 24.67 17.45 36.98 Ice cream/produkcja lodów 17.40 5.35 1.73 9.41 11.74 0.73 13.31 29.48 42.92 31.13 8.83 1.94 13.38 11.53 0.74 29.10 43.11 44.17 Grain mill products, starches and starch products/ Wytwarzanie produktów przemiału 11.45 3.88 1.89 14.35 5.61 0.63 23.05 50.24 46.74 14.48 4.01 2.15 18.93 5.40 0.71 13.57 36.67 45.30 zbóż, skrobi i wyrobów skrobiowych Bread; fresh pastry goods and cakes/ Produkcja pieczywa, produkcja świeżych 20.94 5.68 1.99 25.47 11.89 0.88 5.13 10.87 38.10 10.14 8.21 1.48 2.18 11.84 0.89 94.64 98.90 60.49 wyrobów ciastkarskich i ciastek Rusks and biscuits; preserved pastry goods and cakes/produkcja sucharów i herbatników, produkcja konserwowanych 19.26 5.84 2.17 15.38 8.98 0.78-1.10 20.30 56.04 27.19 7.38 1.89 29.07 12.38 0.99 13.00 9.96 28.29 wyrobów ciastkarskich i ciastek

THE FINANCIAL SITUATION OF THE FOOD INDUSTRY IN POLAND IN COMPARISON WITH 2005 IN 2010 45 Table 2. Cont./Tabela 2. Cd. Macaroni, noodles, couscous and similar farinaceous products/produkcja makaronów, klusek, kuskusu i podobnych wyrobów -8.88-3.80 2.12 41.77 3.79 0.73 12.07 38.63 61.20 20.52 6.66 1.90 13.47 16.72 1.12 32.15 20.35 58.60 mącznych Sugar/Produkcja cukru 0.28 0.11 2.36 8.40 2.79 0.50 69.39 136.78 45.77 24.74 9.31 1.88 12.30 13.40 0.87 23.20 32.79 63.77 Cocoa, chocolate and sugar confectionery/produkcja kakao, 7.14 3.17 1.74 9.11 8.46 1.13 51.47 34.60 75.58 21.00 14.92 1.66 25.40 16.64 1.58 147.80 95.70 39.99 czekolady i wyrobów cukierniczych Processed tea and coffee/przetwórstwo herbaty i kawy 11.16 4.30 2.06 30.77 6.36 1.01 53.72 47.72 75.97 11.89 6.74 1.55 4.16 17.45 1.33 59.58 27.70 78.54 Condiments and seasoning/produkcja przypraw 23.39 6.87 2.01 6.70 22.89 1.39 86.03 28.75 72.71 16.78 7.31 1.66 16.81 13.99 1.30 67.89 41.13 60.90 Prepared meals and dishes/ Wytwarzanie gotowych posiłków i dań 14.85 2.18 3.34 56.94 3.42 0.77 21.20 34.99 63.38 23.88 7.67 1.79 4.73 24.46 1.23 63.95 31.21 60.87 Homogenised food preparations and dietetic food/produkcja artkułów 8.30 2.90 2.10 31.10 4.29 0.82 32.11 46.40 61.78-12.20-1.41 5.43 82.72 2.33 0.75 9.53 39.43 29.58 homogenizowanych i żywności dietetycznej Other food products n.e.c./produkcja pozostałych artykułów spożywczych, 21.28 6.13 1.86 15.43 18.22 1.19 48.54 29.17 58.81 7.36 4.21 1.56 5.45 6.40 0.88 33.25 41.62 62.89 gdzie indziej niesklasyfikowana Prepared feeds for farm animals/ Produkcja gotowych paszy i i karmy dla 20.11 5.31 1.78 11.04 11.63 1.24 47.18 25.24 53.26 5.22 3.13 2.10 53.06 2.42 0.84 15.71 29.61 52.52 zwierząt Distilled alcoholic beverages/destylowanie, rektyfikowanie i mieszanie alkoholi 5.65 0.97 2.47 6.95 6.87 1.19 33.00 16.35 62.98 13.82 2.74 2.07 29.22 6.86 1.17 40.04 23.71 43.60 Wine from grape/produkcja win gronowych 7.18 3.37 2.08 21.53 5.21 1.45 136.60 50.14 172.94 43.91 9.04 1.96 10.18 70.30 0.98 25.17 22.27 31.38 Cider and other fruit wine/produkcja cydru i pozostałych win owocowych 6.06 0.74 3.32 23.99 2.76 0.54 2.66 41.52 37.35 8.72 1.08 3.65 75.70 4.31 0.99 11.82 11.84 60.07 Other non-distilled fermented beverages/ Produkcja pozostałych niedestylowanych 9.56 1.97 3.16 18.88 3.76 0.81 31.22 46.49 106.16 19.43 8.26 1.80 2.99 10.18 1.33 100.71 42.21 104.9 napojów fermentowanych Beer/Produkcja piwa 37.80 11.43 2.04 22.47 12.37 0.71-10.18 10.50 37.64-1.90-0.37 2.48 21.85 2.99 0.67 15.94 40.87 46.85 Malt/Produkcja słodu 27.65 6.26 3.00 61.22 4.27 0.38-0.09 67.30 32.64 55.61 9.43 2.77 23.43 14.67 0.62-18.82 13.30 44.92 Soft drinks; mineral waters and other bottled waters/produkcja napojów bezalkoholowych, produkcja wód mineralnych i pozostałych 2.75 0.85 2.52 37.70 3.26 0.70-10.85 23.37 53.05 9.11 5.16 1.80 43.97 6.38 1.56 56.43 20.07 45.44 wód butelkowanych Source: own study based on CSO data [Statystyczne sprawozdanie 2006, 2011] Źródło: opracowanie własne na podstawie danych GUS [Statystyczne sprawozdanie 2006, 2011]

46 Joanna Florek, Joanna Stanisławska, Dorota Czerwińska-Kayzer liabilities ranged from 4.04% to 61.22%, whereas in 2010 from 2.18% to 82.72%. In 2005, in 25% of branches of the food industry, the long-term debt was smaller than or equal to 11.22%, in 50% of branches it was equal to or lower than 20.20%, and in 75% of the branches it did not exceed 29.90%. On the other hand, in 2010 in 25% of branches it was smaller than or equal to 10.18%, in 50% of branches it was equal to or lower than 21.33%, and in 75% of branches it was not greater than 29.22%. These statistics show that in comparison with 2005, in 2010 enterprises reduced their level of long-term debt, which was probably a reaction to the threat of the economic crisis. It is also noteworthy that in 2010, branches with a high level of capital multiplier, i.e. production of prepared meals and dishes and distillation of alcoholic beverages, had a high level of long-term debt. As has been proved, the food industry is characterised by a strong diversification in debt level and in consequence, interest coverage ratio varied significantly. In 2005, in enterprises of food industry, the ratio fluctuated from 2.76 (cider production) to 22.89 (production of condiments and seasonings), whereas in 2010 it ranged from 2.33 (production of prepared meals and dishes) to 546.68 (production of margarine and similar edible fat). In 2005, the average value of the ratio was 5.86 and in 2010 it equalled 8.70. Thus, in the entire period under analysis, there was improvement in the capacity of Polish food industry enterprises to handle debt. It is worth stressing that in view of the lower quartile, in 2010 in 75% of the branches the profit covered the interest value at least 5.07 times and in 50% of branches it was greater than or equal to 8.70 times (Tab. 3). This proves that in the period under analysis, food industry enterprises did not incur problems covering the financial costs of incurred credits. This correlation may be disturbed in branches of production of prepared meals and dishes and cider production in 2011, where the deficit is accompanied by a low level of interest coverage ratio. Another area of assessment of the financial situation concerned financial liquidity. In the periods under analysis, the mean level of quick ratio was below the normative value, i.e. in 2005 it was 0.76, and in 2010 0.94. In view of the upper quartile, in the first period under analysis, 75% of branches of the food industry sector had a liquidity level lower than or equal to the lower limit of the normative interval. On the other hand, in 2010 much lower liquidity than 1.0 could be Table 3. The basic statistics characterising the ratios describing the financial situation in the branches of the food industry sector in Poland in 2005 and 2010 Tabela 3. Podstawowe statystyki charakteryzujące wskaźniki opisujące sytuację finansową branż sektora przemysłu spożywczego w Polsce w 2005 i 2010 roku Ratio/ Wskaźnik Min. Max. Lower quartile/ Dolny kwartyl Median/ Mediana Upper quartile/ Górny kwartyl Coefficient of variation/ Współczynnik zmienności 2005 2010 2005 2010 2005 2010 2005 2010 2005 2010 2005 2010 ROE -8.88-12.20 37.80 55.61 7.58 8.82 11.50 13.44 19.89 20.88 68.80 83.46 ROS -3.80 1.41 11.43 14.92 1.53 2.72 3.32 4.56 5.34 7.62 79.67 70.13 ER 1.73 1.37 3.34 5.43 2.00 1.79 2.11 2.02 2.54 2.36 20.73 35.82 LD 4.04 2.18 61.22 82.72 11.22 10.18 20.20 21.33 29.90 29.22 67.11 81.68 ICR 2.76 2.33 22.89 546.68 4.28 5.07 5.86 8.70 9.06 13.99 62.79 337.60 QR 0.33 0.49 1.45 1.58 0.69 0.75 0.76 0.94 0.99 1.23 35.08 30.08 WCC -10.85-18.82 136.60 147.80 3.28 13.14 22.23 27.38 47.17 58.79 110.56 92.91 IC 10.50 9.96 136.78 98.90 21.07 20.07 34.29 31.39 49.54 42.21 72.12 66.69 ARC 25.74 25.65 172.94 104.90 39.24 34.81 53.16 46.15 61.64 60.90 49.48 37.01 Source: see tab. 2 Źródło: jak w tab. 2

THE FINANCIAL SITUATION OF THE FOOD INDUSTRY IN POLAND IN COMPARISON WITH 2005 IN 2010 47 observed only in 50% of the branches. This indicates that in 2005 many more entities may have had problems settling their short-term liabilities on time. In 2010 the situation changed, which can be proved by the fact that in 25% of branches, quick liquidity was equal to or greater than 1.23. This may point to the fact that in those branches excessive cash was gathered or there was a high share of deferred payment sales. Thus, we can suppose that enterprises from those branches in question applied an aggressive strategy of trade credit, which is based on long deferred payments. This may also have been a consequence of the introduction of additional capital in the form of subsidies from EU funds to the Polish food industry. In both periods under analysis, the lowest quick liquidity could be observed in the production of oils and fats (0.33 and 0.49), whereas the highest liquidity could be seen in the production of wine from grapes (1.45) in 2005 and in the production of sugar (1.58) in 2010. The working capital cycle is another important ratio which characterises financial liquidity. In 2005 and in 2010, the average level of this ratio was 23 and 28 days, respectively, which means that food industry enterprises had enough capital for 23-28 days. In 2005, the shortest period of this cycle was 11 days and it applied to the production of soft drinks, mineral water and other bottled water, whereas in 2010 it amounted to 19 days, which applied to the branches of beer production. Thus, there could have been a situation in breweries where the need for timely settlement of short-term liabilities could have made it necessary to sell part of their fixed assets. In consequence, this might have contributed to higher financial costs, which would have increased the risk of financial liquidity. It is worth stressing that in 2005 a negative working capital cycle could be observed in six branches, but in 2010 it was only seen in beer production. Besides, in 2010 the working capital cycle lengthened. In 2005, in 25% of the branches it was equal to or longer than 48 days and in 2010 60 days. On the other hand, the longest working capital cycle could be seen in the production of wine from grapes (137 days) in 2005 and in the production of sugar (148 days) in 2010. The situation indicates an improvement in financial liquidity and a lower risk of business activity. The analysis of the financial liquidity ratio also confirms this conclusion. In the years under study the inventory cycle in the food industry was on average 35 days in 2005 and 32 days in 2010 and showed very high variation. In branches of the food industry under investigation in 2005, the length of inventory storage ranged from 11 days to 137 days. In 2010, this period shortened and ranged from 10 to 99 days. In 2005, in 25% of the branches the inventory storage period was shorter than or equal to 22 days and in 2010 21 days. On the other hand, in 50% of branches it was shorter than or equal to 35 days in 2005 and in 2010 32 days. In view of the upper quartile in the first period under analysis it was equal to or longer than 50 days and in 2010 43 days. In both periods under analysis, branches with a relatively short inventory cycle included: the production of bread, fresh pastry goods and cakes, beer production and meat processing and preservation. In 2005 the longest inventory storage period was in sugar production and in 2010 in starch production. Besides, in 2005 long inventory cycles could be seen in the following branches: the production of oils and fat, as well as in fruit and vegetable processing and preservation. On the other hand, in 2010 long inventory storage periods were noted in grain mill products, fruit and vegetable processing and preservation or in the production of fruit and vegetable juices. It is necessary to stress the fact that in the periods under investigation, the inventory cycle was reduced in the whole food industry. This fact is also confirmed in the study by Bieniasz et al. [2012], which proves that in 2010 the cycle was 32 days and from 2005 to 2009 it was 89 days on average. Another ratio in this analysis was the accounts receivable cycle, which assumed values ranging from 26 to 173 days in the food industry enterprises in 2005, whereas in 2010 it fluctuated from 26 to 105 days. In both periods it had a high variation. In the years under analysis, the shortest period of waiting for receivables, i.e. up to 30 days, was noted in enterprises producing and processing meat, whereas in 2010 it was also noted in enterprises producing bread and in those producing prepared meals and dishes. By contrast, during the period under analysis, enterprises producing wine from grapes had to wait the longest time for their receivables (in 2005 173 days and in 2010

48 Joanna Florek, Joanna Stanisławska, Dorota Czerwińska-Kayzer 105 days). In 2005, enterprises producing cocoa, chocolate and sugar confectionery and those processing tea and coffee, had to wait for their receivables relatively long (more than 70 days). In 2010, the groups of branches with a long accounts receivable cycle (more than 75 days) included: potato processing and preservation, the production of cocoa, chocolate and sugar confectionery, the production of fruit and vegetable juices and the processing and preservation of fish, crustaceans and molluscs. As results from the analysis, in 2005 and 2010 the accounts receivable cycle did not change significantly, which confirms other authors thesis that the accounts receivable cycle in the food industry is a permanent phenomenon. Conclusions The financial situation in branches of the food industry sector in comparison with 2005, slightly improved in 2010 both in terms of their profitability and management of current assets. The distribution of branches in the food industry indicated that the vast majority had a similar approach to the risk of engaging borrowed capital to finance their business activity and applied a conservative trade credit strategy. Bibliogarphy Baourakis G., Doumpos M., Kalogeras N., Zopounidis C. 2002: Multicriteria Analysis and Assessment of Financial Viability of Agribusinesses: The Case of Marketing Co-operatives and Juice-Producing Companies, Agribusiness, vol. 18(4), 543-558. Bieniasz A., Gołaś Z., Łuczak A. 2012: Ocena kondycji finansowej przemysłu spożywczego w Polsce w latach 2005-2010, Zesz. Teoretyczne Rachunkowości, 67(123), SKwP, Warszawa, 7-32. Davies J.H., Goldberg R.A. 1957: A Concept of agribusiness, Boston. Gołębiowski G., Tłaczała A. 2005: Analiza ekonomiczno-finansowa w ujęciu praktycznym, Difin, Warszawa. Liesz T. 2002: Really modified Du Pont analysis: five ways to improve return on equity [online], [www.sbaer. uca.edu/research/sbida/2002/19pdf], dostęp 25.02.2013. Mroczek R. 2011: Procesy dostosowawcze polskiego przemysłu spożywczego do zmieniającego się otoczenia rynkowego, IERiGŻ, Warszawa. Statystyczne sprawozdanie finansowe, produkcja artykułów spożywczych, produkcja napojów. F-02. 2006, 2011: Niepublikowane dane GUS, Warszawa. Rocznik statystyczny przemysłu [on line]: 2001, 2003, 2005, 2011: GUS, Warszawa, www.stat.gov.pl. Sierpińska M., Jachna T. 2004: Ocena przedsiębiorstw według standardów światowych, PWN, Warszawa. Wysocki F., Lira J. 2005: Statystyka opisowa, Wyd. Akademii Rolniczej im. Augusta Cieszkowskiego w Poznaniu, Poznań. Streszczenie Celem badań była ocena sytuacji finansowej branż sektora przemysłu spożywczego w Polsce w latach 2005 i 2010, której dokonano na podstawie niepublikowanych danych statystycznych, pochodzących z GUS. Do przedstawienia i oceny sytuacji finansowej branż sektora przemysłu spożywczego wykorzystano 9 wskaźników finansowych. Na podstawie przeprowadzonych badań można stwierdzić, że sytuacja finansowa w branżach sektora przemysłu spożywczego w 2010 roku nieznacznie poprawiła się w porównaniu do 2005 roku, zarówno pod względem rentowności, jak również gospodarowania majątkiem obrotowym. Rozkład branż przemysłu spożywczego wskazuje, że zdecydowana ich większość ma podobne podejście do ryzyka zaangażowania kapitałów obcych w finansowanie działalności oraz stosuje konserwatywną strategię udzielania kredytu kupieckiego. Correspondence address Dr Joanna Florek, dr Joanna Stanisławska, dr Dorota Czerwińska-Kayzer Poznań University of Life Sciences, Department of Finance and Accounting Wojska Polskiego St. 28, 61-641 Poznań e-mail: florek@up.poznan.pl stanislawska@up.poznan.pl dorotacz@up.poznan.pl