Research Article Open Access

Economic and Financial Flow Generation in Tomato Industry in Italy

Giuseppe Bonazzi1 and Mattia Iotti1
  • 1 Department of Civil Engineering, Environment, Territory and Architecture (DICATeA), University of Parma, Parma, Italy


In many Italian regions, firms operating in tomato industry have made significant investments in plants and machinery and often sell products to large food retail chains that require large stocks of inventory and have an average time of over 150 days for the payment of receivables. These management characteristics amplify capital requirements, in large part financed, increasing debt levels. Also, because of the increasing costs of raw materials in recent years, many firms in the tomato processing sector in Italy have suffered a corporate crisis and even bankruptcy. Therefore, tomato processing firms need to properly control management, particularly in applying indicators that express the sustainability of the financial cycle. To achieve this goal, the article analyzes the annual account data of a sample of 54 tomato processing firms in Italy across a five-year period, showing that economic margins traditionally applied to assess the sustainability of the management cycle differ significantly from financial margins. Moreover, the annual account data of the sample firms highlight the difficulties in credit access, expressed by applying a multiple regression model to analyze return on equity and flow on equity generation. To deepen the analysis, the considered methods could be applied to other agri-food firms, particularly if characterized by high capital intensity.

American Journal of Applied Sciences
Volume 12 No. 2, 2015, 99-111


Submitted On: 14 June 2014 Published On: 25 March 2015

How to Cite: Bonazzi, G. & Iotti, M. (2015). Economic and Financial Flow Generation in Tomato Industry in Italy. American Journal of Applied Sciences, 12(2), 99-111.

  • 6 Citations



  • Tomato Processing Firms
  • Italian Agri-Food Sector
  • Free Cash Flow to Equity
  • Flow on Equity