IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Assess profitability of non-financial firms



Registered author(s):

    This paper defines first profitability and its measurement. Net operating return on assets is shown to be the only kind of profitability that can be derived from business accounting data - adequately reprocessed - and provide relevant economic information. This requires to estimate the length of life of equipment in order to quantify its depreciation independently of corporate tax rules and the corresponding evaluation of assets. Various ways of reevaluation of assets are compared. The length of life is estimated for each category of assets, defined by both their type and the industry using them, by means of cumulated flows of investment. Such estimates of profitability are closer to those provided by the national accounts than to the estimates usually derived from business data. However, noticeable discrepancies between the first two remain in particular between the estimates of capital stock. Throughout the years 1985 to 2001 the proposed estimates are stable at circa 8% except a peak at the end of the 90s. This stability is the result of the decrease in the apparent capital productivity compensated by the upturn of the margin ratio.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    File Function: Document de travail de la DESE numéro G2004-13
    Download Restriction: no

    Paper provided by Institut National de la Statistique et des Etudes Economiques, DESE in its series Documents de Travail de la DESE - Working Papers of the DESE with number g2004-13.

    in new window

    Date of creation: 2004
    Date of revision:
    Handle: RePEc:crs:wpdeee:g2004-13
    Contact details of provider: Postal: 15 Boulevard Gabriel Peri 92244 Malakoff Cedex
    Phone: 01 41 17 50 50
    Web page:

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:crs:wpdeee:g2004-13. 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: (D3E)

    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.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.