WHAT DETERMINES THE PROFITABILITY OF COMPANIES: CASE OF CROATIAN FOOD AND BEVERAGE INDUSTRY

A company's profitability has always attracted the attention of academics and practitioners interested in revealing the main factors that determine business success. Although profitability has been widely investigated in manufacturing industry as a whole, studies related to the individual sectors within this industry are fairly rare. This is especially true for the food and beverage industry. Accordingly, the aim of this paper was to investigate the factors that determine companies' profitability in the Croatian food and beverage industry during the period from 1999 to 2009. The results of the conducted dynamic panel analysis revealed negative and significant influence of company's debt ratio on profitability; and significant positive influence of company's size, concentration ratio and past performance on current profitability. Additionally, MES, risk, and asset turnover had no significant role in determining profitability.