Dupont Analysis of Farms in V4 Countries

The paper deals with the analysis of factors that influence the change in return on equity (ROE) in farms of individual V4 countries – in Slovakia, Poland, Hungary and the Czech Republic. DuPont analysis denotes the decomposition of the ROE indicator and is classified as a basic pyramid decomposition. The pyramid system captures the relationship between indicators, where one synthetic indicator (ROE) is broken down into analytical indicators through linkages. In the case of a multiplicative link between indicators, the functional and logarithmic method is used. The source of data is the Farm Accountancy Data Network for the period 2009–2017. Comparing the first and last year we can conclude that the ROE indicator decreased in farms of all V4 countries (in Slovakia by 155%, in Czech Republic by 133%, in Hungary by 52% and in Poland by 19%). The predominantly positive or negative impact on its development was mainly influenced by two indicators: return on assets and return on sales in all countries.