ANALYSIS OF THE FINANCIAL STABILITY OF THE MANUFACTURING INDUSTRY OF THE REPUBLIC OF SRPSKA IN THE CONDITIONS OF GEOPOLITICAL CHANGES

Univerzitet u Istočnom Sarajevu, Fakultet poslovne ekonomije Bijelјina, Republika Srpska, Bosna i Hercegovina
Bosnia and Herzegovina

KPMG B-H d.o.o. Sarajevo, Republika Srpska, Bosna i Hercegovina
Bosnia and Herzegovina

Opština Osmaci, Republika Srpska, Bosna i Hercegovina
Bosnia and Herzegovina


Abstract

In this paper, the financial stability of the processing industry, specifically the meat processing and production sector, in the Republic of Srpska under the conditions of geopolitical changes is analyzed. The sample consists of a total of 11 companies whose activities include meat processing and preservation, meat processing and preservation for production of meat products, and meat production. The sample was formed using random selection according to the registry of legal entities and economic associations in the aforementioned activities provided by the APIF. The sample represents 21% of the population. The aim of the research is to examine how the newly emerged geopolitical changes have affected the food sector and the activities of meat processing, preservation, and production of meat products, and to determine whether the level of financial stability of the companies was higher before or during the geopolitical changes. The financial performance analyzed includes the financial stability coefficient, debt ratio, liquidity ratio, ROA, net and gross profit margin ratio and net business profit rate. The data was collected from the company's financial reports for the period 2017-2022. years. The methods used in the empirical research include descriptive analysis and comparative analysis of financial indicators before and during geopolitical changes. Current geopolitical changes can lead to restrictions on trade flows between countries, which could potentially impede the import and export of meat products to and from the Republic of Srpska. Such an environment can affect product availability and market competition. The geopolitical conflict between Russia and Ukraine has caused an energy crisis and slowed down supply chains, leading to economic instability, especially in Europe. Also, during 2020, 2021 and 2022, the current global pandemic of the corona virus represented a special challenge for the business and investment environment.

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