PROFITABILITY DETERMINANTS OF SERBIAN JOINT-STOCK COMPANIES

Teodora Tica, Bojana Vuković, Kristina Peštović and Ivana Medved

Faculty of Economics in Subotica, University of Novi Sad, The Republic of Serbia

The paper aims to analyze the influence of the selected financial determinants on profitability as a key determinant of corporate performance success. The sample includes 473 joint-stock companies in the Republic of Serbia that were actively operating in period 2017-2021. Panel data evaluation revealed the presence of a significant positive influence of the company size, growth, and cash flow on profitability, as well as a significant negative influence of the capital and asset structures. In contrast, the influence of liquidity and a tax shield on profitability is statistically insignificant. The obtained results primarily serve the management who can consider the indicators of the business done by joint-stock companies in order to improve profitability and ensure proper resource allocation. They are also useful for investors in planning investment and operational activities with the aim of a more effective and more efficient achievement of profitability goals. The results are also aimed at other stakeholders who want to create a profitability growth and corporate performance strategy directed towards ensuring long-term growth.

Keywords: profitability, ROA, joint-stock companies, panel analysis

JEL Classification: C58, L25