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Articles by Markku Penttinen

Category: Research article

article id 701, category Research article
Antrei Lausti, Markku Penttinen. (1998). The analysis of return and its components of non-industrial private forest ownership by forestry board districts in Finland. Silva Fennica vol. 32 no. 1 article id 701. https://doi.org/10.14214/sf.701
Non-industrial private forest ownership returns and risks in Finland are both estimated and disaggregated to local Forestry Board Districts (FBD) level. Additionally, the FBD level return is divided into price change, felling and change in the growing stock components, which are compared with the inflation rate. The results are based on a complete count of the stumpage prices, silvicultural costs and state subsidies as well as the National Forest Inventory (NFI) data. The influence of taxation is discussed as well. Although this database is excellent for economic studies as well, the estimation methodology is vitiated by a host of problems, the resolution of which is the major contribution of this study. The study period is 1972–1996. The results show that there have been fairly large differences in forest ownership returns and prices depending on the Forestry Board District. Results show that the price change component has been larger in Northern Forestry Board Districts, as much as 0.9% above the inflation rate in Lapland FBD, than in Southern Forestry Board Districts, 1.5% less than the inflation rate in southern Helsinki FBD. The net increase, however, has been larger in Southern Forestry Board Districts than in Northern Forestry Board Districts. Using the average net increment in Finland as a comparison base, the net increment in South Karelia exceeded it by 0.6%, but fell below it by 1.8% in Northeastern Finland. Finally, the return over the whole period is compared to the return on private housing and inflation in the case of North Savo. In all, the estimation methodology developed also serves as spin-off product development for the Forest Statistics Information Service (FSIS).
  • Lausti, Helsinki School of Economics and Business Administration, Centre for Doctoral Programme, Runeberginkatu 15 A, FIN-00100 Helsinki, Finland ORCID ID:E-mail:
  • Penttinen, Finnish Forest Research Institute, Helsinki Research Centre, Unioninkatu 40 A, FIN-00170 Helsinki, Finland ORCID ID:E-mail: markku.penttinen@metla.fi (email)

Category: Article

article id 5401, category Article
Akmal S. Hyder, Lars Lönnstedt, Markku Penttinen. (1994). Outline of accounting for non-industrial private woodlots. Silva Fennica vol. 28 no. 2 article id 5401. https://doi.org/10.14214/sf.a9167

For non-industrial private forest (NIPF) owners land with its timber production is an example of a capital asset. Developments in the asset’s value and yield depend not only on forest management but also on other factors that the owner cannot control, for example timber prices and the production circumstances, such as soil and climate. One important basis for decision making related to management strategy and, in the short run, to cutting and silvicultural activities is economic analysis and accounting. The owner has to decide whether to invest more in his property (planting, cleaning, building of forest roads) or disinvest (sell timber or the holding). He has to find ways to increase revenue and cut costs.

However, generally accepted accounting practices for NIPF owners are lacking. Applying business economic accounting principles and forestry accounting traditions, we outline a proposal for a profit and loss accounting and balance sheet for NIPF holdings with a view towards increasing economic awareness among private owners. Key concepts are net profit of the enterprise and calculated profit of the property. Other profit measurements that are used are gross margin, forestry margin, operating margin and operating profit. Calculated profit is based on adjusted net profit. The main concern, however, is to consider the change in the holding’s market value caused by changes in stock volume, quality and price. The contents of the accounting framework development here are applied to three management strategies. The return on investment (ROI) of forestry is compared with other investment alternatives.

  • Hyder, ORCID ID:E-mail:
  • Lönnstedt, ORCID ID:E-mail:
  • Penttinen, ORCID ID:E-mail:
article id 5489, category Article
Markku Penttinen, Matti Kinnunen. (1992). Profitability of forestry in jointly-owned forests of Northeastern Finland and Lapland. Silva Fennica vol. 26 no. 4 article id 5489. https://doi.org/10.14214/sf.a15650

The profitability of jointly owned forest holdings in the two northernmost forest board districts of Finland was studied by means of ratio analysis. A time series of profit and loss statements and balance sheets from 33 holdings covering the fiscal years ending 1981–1990 served as the database. The studied area was 348,038 ha, the allowable cut 304,300 m3 per year and the average turnover, deflated by the wholesale price index, FIM 57.6 million per year. The key result obtained was that the average annual profit was FIM 107 per hectare and FIM 110 per m3. The time series showed that the ratios had increased significantly over the calculation period.

The PDF includes an abstract in Finnish.

  • Penttinen, ORCID ID:E-mail:
  • Kinnunen, ORCID ID:E-mail:
article id 5448, category Article
Markku Penttinen. (1991). Metsäkirjanpidon ja kustannuslaskennan toteuttaminen - 20 vuotta metsätalouden kannattavuuden kenttätutkimusta Itävallassa. Silva Fennica vol. 25 no. 2 article id 5448. https://doi.org/10.14214/sf.a15602
English title: Implementing forestry bookkeeping and cost accounting – 20 years of field research on the profitability of forestry in Austria.

The profitability of forestry in the context of recent economic developments in Finland suggest a more systematic analysis of the profit and the cost structure of small-scale forestry than is normally made today. The domestic and international pressure on farming emphasizes the development of rural areas by means of other business than agriculture, in practice this may mean forestry. Financing in terms of the new law concerning agriculture requires projects to be profitable. Thus, the profitability of different lines of production, including forestry, needs to be reported more carefully than is the practice today.

A network of forestry bookkeeping farms covering the whole Austria has existed for 20 years. The organization and the operation of the forestry bookkeeping and the cost accounting system is based on the scientific cooperation and exchange of information between the organizations in charge. The practical experience and recommendations based thereon might be useful for Finland, when implementing a country-wide network of forestry bookkeeping and cost accounting.

The PDF includes an abstract in English.

  • Penttinen, ORCID ID:E-mail:

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