Determinants of Profitability: Evidence from Russian Agricultural Firms

Abstract

The analysis of profitability and the factors that can influence it is of vital importance in business decision-making. Thus, the purpose of this study is to examine the relationship between profitability and working capital, leverage, and net trade credit. The study is developed based on a sample of Russian firms, which operate in the agricultural sector, for the period from 2013 to 2017. The result denoted that firms were both, profitable and liquid ones, and bought more than sold on credit. Among other results, the study showed that more profitable firms operated with higher liquidity. Onward, the study suggested that firms should decrease the financial leverage ratio in order to increase profitability.