Evaluating The Profitability of Non-Financial Firms
AbstractMany figures ranging from 6% to 20% have been put forward on the average profitability of non-financial firms. These deviations are due to differences in concept, coverage and sources. For example, the estimates based on corporate data are hard to reconcile, in both level and growth, with the national accounts estimates. Over the 1985-2001 period, the proposed estimates show that the earning capacity of non-financial firms was relatively stable at approximately 8% aside from a peak in the late 1980s. This stability was due to a decrease in apparent capital productivity, which was offset by the upturn in the margin rate. This did not prevent shorter run fluctuations: deterioration in profitability from 1990 to 1993 and improvement from 1993 to 2000, wherein the sharp drop in real interest rates starting in the mid-1990s triggered an increase in profitability.
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Bibliographic InfoArticle provided by Institut National de la Statistique et des Etudes Economiques in its journal Economie et Statistique.
Volume (Year): 372 (2005)
Issue (Month): (February)
Profitability; Value of Assets; Length of Life of Equipment;
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