An analysis of financial statements of Virginia's retail farm equipment businesses

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Virginia Tech


Data obtained by mail questionnaire and financial statements of sixty-two firms permitted a partial description and analysis of Virginia's retail farm equipment industry.

The data were combined and analyzed according to sale. and profit groups. The primary analysis used was comparative analysis. Selected business ratios, sales per employee, and returns to management were computed for each sales group. Analysis of gross margin by departments was made for thirty-three firms by sales groups within and among departments.

Among and within analysis of variance was used to test whether statistically significant differences existed among sales groups. Separation of means was used to determine which means were significantly different.

The standard deviation and coefficient of variation were calculated to measure the variation among firms. The range, arithmetic mean, and median were also computed. Regression analysis was employed to measure the effects of selected factors on net profits.

Wide variations existed in net profits for the sample firms. Evidence of economies of scale was found. There were firms within each sales group which showed substantial profits. However, there were firms within four of the five sales groups which had severe 1osses.

Volume of sales, other income, gross margin, operating expenses, advertising, and inventory turnover were statistically significant in explaining the variation in net profits. However, advertising and inventory turnover did not affect net profits as hypothesized.



Retail farm equipment industry