Financial analysis of the Parma PDO Ham firms

Abstract. The study aims to analyze the capacity of the firm operating in the Parma PDO Ham sector to produce profit and serve debt to finance investment. In this important agro-food sector for the territorial economy, processing firm have faced, in recent years, a market crisis. The crisis has caused a decreasing in ham prices; moreover, firm profit has decreased; in some cases firms have generated losses and many firm in the sector failed. Other firms made investment to improve a strategy aiming to reduce cost and to differentiate productions. The paper would examine a panel of firm in order to quantify the capacity to sustain investment and serve debt in different dimensional class of firm. In the paper are applied indices for assessing financial and sustainability ratio to measure sustainability of investments, in particular when firms use debt to complete investment. Expected results of the paper is a deepening of the method about ratio analysis and cash flows definition to be considered in the management efficiency evaluation in small agro-food firm. The paper has the purpose to analyze the capacity to produce cash and serve debt of firm operating in Parma PDO Ham sector. The method uses balance sheet analysis and financial statement analysis (Ratio, UFCF, DSCR) and to quantify the capacity to generate income and sustain financial cycle.