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Abstract:
The commerce sector plays one of the most important roles in Croatian economy. 28% of the total number of registered economic entities in Croatia is in the sector of commerce. From all Croatian employees, this sector employs about 22% of them. The distributive commerce makes about 10% of Croatian gross domestic product. This data show the importance of commerce for Croatian economy in general. In this paper we analyze the determinants of profitability in commerce sector in the Republic of Croatia. The profitability is the key indicator of success of a company, so in the analysis we will especially look at the changes in the profitability of Croatian commerce through last decade.
Key words: Commerce, Croatia, Profitability
Track: Governance
Count: 3.547
(ProQuest: ... denotes formulae omitted.)
1. Introduction
Croatia is a small market, but plays an important role in the economic stability of Southeast Europe. As Croatia became fully integrated into the European Union, business opportunities have grown because of the common trade tariffs, policies and procedures. New opportunities emerged for franchisers, manufacturers of consumer goods, retailers, and travel and tourism marketers.
About one third of all Croatian companies come from the commerce sector. They are employers of about 22% of all Croatian employees, which is about 170 000. The retail in Croatia is today worth 51 billion kuna (6.8 billion euro). Besides the legal market, there is also the illegal market which is estimated to be 30 billion kuna (4 billion euro). So the total value of retail in Croatia is estimated on 81 billion kuna (10.8 billion euro) (Bilic, 2015). That is cca 2500 euro per capita. Because of very specific shape of the country (56000 km2 and 3000 km border) it is very expensive to organize the distribution. The total turnover in commerce per employee is slightly under 100 000 euro (Bilic, 2015). The turnover coefficient in Croatian commerce is estimated to 2.9.
Profitability is the set of indicators which show the success of economic activity. It compares the financial result to the invested money and can be analyzed as the profit margin or return on investment.
The production process consists of the real process and the income distribution process. The profitability of production is the share of the...