Trend in the financial structure and results of firms in 2005
Each year, the National Bank examines the situation regarding the annual accounts of Belgian non-financial corporations. By that time, the Central Balance Sheet Office has already collected a representative number of annual accounts for the preceding year. The article is in three parts. The first part describes the methodology used and the sample. The second part studies the main developments in the profit and loss account. Finally, the third part contains a financial analysis of Belgian companies ; this analysis is supplemented by the interpretation of the results of the failure prediction model developed by the Bank. In 2005, the total value added created by Belgian non financial corporations increased by 4 p.c., constituting a slowdown in comparison with 2004. At the same time, the operating costs (mainly personnel costs and depreciation) grew by 2.8 p.c. So, for the third year in a row, value added growth greatly exceeded the rise in operating costs. As a result, the net operating profit increased by 8.4 p.c., after having already produced an exceptional increase in 2003 and 2004. In three years, the operating profit gained 12 billion euro or 70 p.c. After taking into account the other elements of the results, and particularly the financial and exceptional results, non financial corporations made a net profit after tax of 41 billion euro, representing a strong increase in comparison with 2004. Return on equity increased significantly in 2005 in the largest companies. The slight decline in the leverage effect had a positive influence on financial independence and, due to historically low interest rates, the associated charges continued to fall. The net working capital of large companies and SMEs went up, while the working capital needs of the former tend to exceed their net working capital. Investments caught up in 2005 in the major companies, mainly in the non manufacturing sector, but in terms of the median value there was a slight decline, linked to lower use of production capacity. Rising amounts invested in R&D were concentrated on a smaller number of companies. As far as financial risks are concerned, they levelled off in 2005, after several years of decline.
Volume (Year): (2006)
Issue (Month): III (December)
|Contact details of provider:|| Postal: |
Phone: (+ 32) (0) 2 221 25 34
Fax: (+ 32) (0) 2 221 31 62
Web page: http://www.nbb.be/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:nbb:ecrart:y:2006:m:december:i:iii:p:31-53. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.