Citation: Vukovi´c, B.; Peštovi´c, K.;
Mirovi´c, V.; Jakši´c, D.; Milutinovi´c, S.
The Analysis of Company Growth
Determinants Based on Financial
Statements of the European
Companies. Sustainability 2022, 14,
770. https://doi.org/10.3390/
su14020770
Academic Editor: Konstantinos
Polymeros
Received: 10 September 2021
Accepted: 9 January 2022
Published: 11 January 2022
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Article
The Analysis of Company Growth Determinants Based on
Financial Statements of the European Companies
Bojana Vukovi´c , Kristina Peštovi´c * , Vera Mirovi´c, Dejan Jakši´c and Sunˇcica Milutinovi´c
Faculty of Economics in Subotica, University of Novi Sad, 24000 Subotica, Serbia;
bojana.vukovic@ef.uns.ac.rs (B.V.); vera.mirovic@ef.uns.ac.rs (V.M.); dejan.jaksic@ef.uns.ac.rs (D.J.);
suncica.milutinovic@ef.uns.ac.rs (S.M.)
* Correspondence: kristina.pestovic@ef.uns.ac.rs; Tel.: +381-63-582-776
Abstract:
The primary aim of this paper is to determine the indicators that have an influence on
the company growth in the field of agriculture, forestry, and fisheries during the six-year period
(2014–2019). This sector is very important for sustainable development, bearing in mind the need to
preserve natural resources, i.e., land, water, plant, and animal resources. Sustainable development
of this sector is of satisfactory technical-technological development, economically sustainable, and
socially acceptable. The sample consists of 1333 observations of active companies on the European
market. Multiple regression analysis was used in order to thoroughly analyze the variables of
growth. The obtained results showed that company size has a negative impact on growth, while
return on assets and leverage have a positive impact on growth. The impact of these variables was
statistically significant. Along with the influence of observed determinants based on data from
financial statements, the future growth and development of companies in this sector will certainly
depend on the volume of investments, pricing policy, credit and natural conditions, agricultural
policy measures, and adequate institutional support through the provision of financial support
and encouragement of exports of products. Institutional incentives for more intensive integration
of the agriculture, forestry, and fisheries sector are aimed at achieving the concept of integrated
sustainable development.
Keywords: growth; agriculture; forestry and fisheries; European companies
1. Introduction
The growth of each company presupposes an increase in the size of the company
in a certain period of time. Businesses can expand while remaining within their regular
range of products or services, or they can expand their range to provide diversity. Business
diversity affects more stable business conditions and leads to a reduction in business risk.
The extent to which companies will diversify is determined by their size and financial
strength. Recognizing the importance of growth is aimed at creating conditions that will
lead to economic prosperity. Growth affects the increase of value and strengthening of the
company, as well as the increase in economic activity. Fast-growing companies contribute
to the growth of the world economy.
Potential growth shows how a company develops the ability or capacity for growth
and development in the near future. Growth rate indicates heterogeneity that exists between
companies and is difficult to predict [
1
]. A good growth rate is achieved in accordance
with economic development and there is no problem from the aspect of survival and
development of companies. There is no constraint from the aspect of company growth
if resources are used efficiently. The neoclassical theory assumes that companies should
achieve optimal size in order to maximize profits. So, there is an optimal size of the
company that all companies are approaching. When the optimal size is established, it is
assumed that companies do not grow above the optimal size. Company growth is based
Sustainability 2022, 14, 770. https://doi.org/10.3390/su14020770 https://www.mdpi.com/journal/sustainability
