FINANSIJSKA POLUGA I EFEKTI NJENOG KORIŠTENJA U PREHRAMBENOJ INDUSTRIJI BOSNE I HERCEGOVINE/FINANCIAL LEVERAGE AND EFFECTS OF ITS USE IN THE FOOD INDUSTRY OF BOSNIA AND HERZEGOVINA

Abstract

Financial leverage represents a situation in which a company borrows in order to have positive effects, to increase the profitability of its own capital, it is necessary not only to operate with profit but also to make the gross profitability of assets higher than the average cost of borrowed capital. Then the return on equity is higher than the return on total assets. This paper analyzed the effects of financial leverage on enterprises engaged in meat, milk, fruit and vegetable processing in Bosnia and Herzegovina in the period 2010-2014 with at least one employee. Despite the fact that the analyzed companies in B&H have the positive effect of the financial leverage, sectors cannot be considered as successful from the standpoint of the use of financial leverage because less than half of enterprises have a positive effect, on average 37.01% of enterprises have negative financial results or the loss of capital level from the previous period, on average 40.76% of enterprises that have positive effects are in charge over 75%, and 77.45% of enterprises are illiquid, while on average 20.41% of enterprises had blocked accounts in the period 2012-2014. At least positive tendencies were recorded where from 2011 the share of companies that have positive effects is continuously increasing and the share of companies that are overdue and illiquid is decreasing.