An Analysis of Financial Performance and Economy of Scale of Palm Oil Extraction Industry in Southern of Thailand

Abstract

This research aims to analyze the financial performance and economy of scale of the sample companies in the palm oil extraction industry in southern of Thailand. Financial statements of 30 companies from 2012 - 2015 were used to calculate financial ratios in order to analyze their performance and survivor technique was employed for the analysis of economy of scale. The results of financial performance analysis showed that most of the samplecompanies have good financial performance with high financial flexibility, low debt risk, and good profitability and asset management. Comparisons in the same industry found that large companies have higher financial performance than medium and small companies. The results of economy of scale analysis indicated that 20 companies have the ability to survive or have economy of scaleand they consisted of 2 small companies, 12 medium companies, and 6 large companies. In contrast, 10 companies have no ability to survive and were 3 small companies, 5 medium companies, and 2 large companies. Therefore, these companies should consider the cost-depth and defects of the company's management in order to improve the business more efficiently.