In agricultural practice, gross margin is often used as the main performance indicator. However, the difference between gross margin and net profit can be significant.

Gross margin reflects the difference between revenues and direct costs. Net profit, however, includes financial expenses, depreciation, taxes, and administrative costs. According to European analyses, farms that do not integrate these elements into their economic calculations may overestimate their actual profitability.

In a context of still elevated interest rates and volatile operational costs, ignoring indirect costs can lead to risky investment decisions. Data from the National Bank of Romania indicate that the agricultural sector is sensitive to fluctuations in financing costs.

For 2026, economic sustainability is not measured only by production or turnover, but by the farm’s ability to generate consistent net profit. In the absence of a complete financial analysis, increased volume may conceal structural vulnerabilities.

(Photo: Freepik)