E-Commerce in Czech Republic: A Strategic Reference, 2007
Edited by
Philip M. Parker, Ph.D. Eli Lilly Chair Professor of Innovation, Business and Society INSEAD (Fontainebleau & Singapore)
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About Icon Group International, Inc. Icon Group International, Inc.’s primary mission is to assist managers with their international information needs. U.S.-owned and operated, Icon Group has field offices in Paris, Hong Kong, and Lomé, Togo (West Africa). Created in 1994, Icon Group has published hundreds of multi-client databases, and global/regional market data, industry and country publications. Global/Regional Management Studies: Summarizing over 190 countries, management studies are generally organized into regional volumes and cover key management functions. The human resource series covers minimum wages, child labor, unionization and collective bargaining. The international law series covers media control and censorship, search and seizure, and trial justice and punishment. The diversity management series covers a variety of environmental context drivers that effect global operations. These include women’s rights, children’s rights, discrimination/racism, and religious forces and risks. Global strategic planning studies cover economic risk assessments, political risk assessments, foreign direct investment strategy, intellectual property strategy, and export strategies. Financial management studies cover taxes and tariffs. Global marketing studies focus on target segments (e.g. seniors, children, women) and strategic marketing planning. Country Studies: Often managers need an in-depth, yet broad and up-to-date understanding of a country’s strategic market potential and situation before the first field trip or investment proposal. There are over 190 country studies available. Each study consists of analysis, statistics, forecasts, and information of relevance to managers. The studies are continually updated to insure that the reports have the most relevant information available. In addition to raw information, the reports provide relevant analyses which put a more general perspective on a country (seen in the context of relative performance vis-à-vis benchmarks). Industry Studies: Companies are racing to become more international, if not global in their strategies. For over 2000 product/industry categories, these reports give the reader a concise summary of latent market forecasts, pro-forma financials, import competition profiles, contacts, key references and trends across 200 countries of the world. Some reports focus on a particular product and region (up to four regions per product), while others focus on a product within a particular country.
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Table of Contents 1
INTRODUCTION & METHODOLOGY.............................................................................1
1.1
What Does This Report Cover?
1
1.2
How to Strategically Evaluate Czech Republic
1
1.3
Latent Demand and Accessibility in Czech Republic
3
2
E-COMMERCE IN CZECH REPUBLIC ............................................................................5
2.1
Latent Demand and Accessibility: Background
5
2.2
Latent Demand: Market Composition
5
2.3
Latent Demand: Dynamics
5
2.4
Latent Demand: Leading Segments
6
2.5
Accessibility: The Structure of Competition
6
2.6
Latent Demand: Target Buyers
7
2.7
Accessibility: Key Factors
7
2.8
Accessibility: Market Entry
7
2.9
Key Contacts
7
2.10
Accessibility: Trade Event
8
3
FINANCIAL INDICATORS: COMPUTER PROGRAMMING SERVICES ..................9
3.1 Overview 9 3.1.1 Financial Returns and Gaps in Czech Republic ....................................................................................... 10 3.1.2 Labor Productivity Gaps in Czech Republic ............................................................................................ 13 3.1.3 Limitations and Extensions ...................................................................................................................... 13 3.2 Financial Returns in Czech Republic: Asset Structure Ratios 14 3.2.1 Overview .................................................................................................................................................. 14 3.2.2 Assets – Definitions of Terms .................................................................................................................. 14 3.2.3 Asset Structure: Outlook .......................................................................................................................... 17 3.2.4 Large Variances: Assets ........................................................................................................................... 18 3.2.5 Key Percentiles and Rankings .................................................................................................................. 21 3.3 Financial Returns in Czech Republic: Liability Structure Ratios 36 3.3.1 Overview .................................................................................................................................................. 36 3.3.2 Liabilities and Equity – Definitions of Terms .......................................................................................... 36 3.3.3 Liability Structure: Outlook ..................................................................................................................... 38 3.3.4 Large Variances: Liabilities ..................................................................................................................... 39 3.3.5 Key Percentiles and Rankings .................................................................................................................. 42 3.4 Financial Returns in Czech Republic: Income Structure Ratios 51 3.4.1 Overview .................................................................................................................................................. 51 www.icongrouponline.com
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Income Statements – Definitions of Terms .............................................................................................. 51 Income Structure: Outlook ....................................................................................................................... 53 Large Variances: Income.......................................................................................................................... 54 Key Percentiles and Rankings .................................................................................................................. 57
3.5 Financial Returns in Czech Republic: Profitability Ratios 70 3.5.1 Overview .................................................................................................................................................. 70 3.5.2 Ratios – Definitions of Terms .................................................................................................................. 70 3.5.3 Ratio Structure: Outlook .......................................................................................................................... 73 3.5.4 Large Variances: Ratios ........................................................................................................................... 74 3.5.5 Key Percentiles and Rankings .................................................................................................................. 77 3.6 Productivity in Czech Republic: Asset-Labor Ratios 92 3.6.1 Overview .................................................................................................................................................. 92 3.6.2 Asset to Labor: Outlook ........................................................................................................................... 93 3.6.3 Asset to Labor: International Gaps........................................................................................................... 94 3.6.4 Key Percentiles and Rankings .................................................................................................................. 97 3.7 Productivity in Czech Republic: Liability-Labor Ratios 112 3.7.1 Overview ................................................................................................................................................ 112 3.7.2 Liability to Labor: Outlook .................................................................................................................... 112 3.7.3 Liability and Equity to Labor: International Gaps.................................................................................. 113 3.7.4 Key Percentiles and Rankings ................................................................................................................ 116 3.8 Productivity in Czech Republic: Income-Labor Ratios 125 3.8.1 Overview ................................................................................................................................................ 125 3.8.2 Income to Labor: Outlook ...................................................................................................................... 126 3.8.3 Income to Labor: Gaps ........................................................................................................................... 127 3.8.4 Key Percentiles and Rankings ................................................................................................................ 130
4 4.1
MACRO-ACCESSIBILITY IN CZECH REPUBLIC.....................................................143 Executive Summary
143
4.2 Economic Fundamentals and Dynamics 143 4.2.1 Government Intervention Risks.............................................................................................................. 143 4.2.2 Infrastructure Development.................................................................................................................... 143 4.2.3 European Union Accession .................................................................................................................... 144 4.3 Political Risks 144 4.3.1 Economic Relationship with the United States ...................................................................................... 144 4.3.2 Politics and the Business Environment .................................................................................................. 144 4.3.3 The New Regional Governments ........................................................................................................... 144 4.4 Marketing Strategies 144 4.4.1 Agents and Distributors.......................................................................................................................... 145 4.4.2 Checking Bona Fides.............................................................................................................................. 145 4.4.3 Distribution Channel Options................................................................................................................. 145 4.4.4 Advertising and Trade Promotion .......................................................................................................... 146 4.4.5 Pricing Issues.......................................................................................................................................... 146 4.4.6 Public Sector Marketing......................................................................................................................... 147 4.4.7 Other Market Entry Strategies................................................................................................................ 147 4.4.8 Direct Marketing Options....................................................................................................................... 147 4.4.9 Joint Ventures and Licensing Options.................................................................................................... 147
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Establishing a Representative Office...................................................................................................... 148 Franchising Activities............................................................................................................................. 148 Key Marketing Contacts......................................................................................................................... 148
4.5 Import and Export Regulation Risks 151 4.5.1 Adherence to Free Trade Agreements .................................................................................................... 151 4.5.2 Customs Regulations and Tariff Rates ................................................................................................... 151 4.5.3 Documentation Required for Trade........................................................................................................ 152 4.5.4 Labeling Issues....................................................................................................................................... 152 4.5.5 Licensing Requirements ......................................................................................................................... 153 4.5.6 Restrictions on Imports .......................................................................................................................... 153 4.5.7 Controls on Exports................................................................................................................................ 153 4.5.8 Entering Temporary Imports .................................................................................................................. 153 4.5.9 Free Trade Zone Options........................................................................................................................ 153 4.5.10 Local Standards ...................................................................................................................................... 154 4.6 The Investment Climate 155 4.6.1 Openness to Foreign Investment ............................................................................................................ 156 4.6.2 Conversion and Transfer Policies........................................................................................................... 157 4.6.3 Expropriation and Compensation ........................................................................................................... 157 4.6.4 Dispute Settlement ................................................................................................................................. 157 4.6.5 Investment Incentives............................................................................................................................. 158 4.6.6 Right to Private Ownership and Establishment ...................................................................................... 159 4.6.7 Intellectual Property Risks ..................................................................................................................... 159 4.7 Transparency of the Regulatory System 159 4.7.1 Capital Market Risks .............................................................................................................................. 160 4.7.2 Political Violence ................................................................................................................................... 160 4.7.3 Corruption .............................................................................................................................................. 160 4.7.4 Bilateral Investment Agreements ........................................................................................................... 161 4.7.5 OPIC and Other Investment Insurance................................................................................................... 161 4.7.6 Labor ...................................................................................................................................................... 161 4.7.7 Free Trade Zone Options........................................................................................................................ 162 4.8 Trade and Project Financing 162 4.8.1 Trade Finance......................................................................................................................................... 162 4.8.2 Methods of Payment............................................................................................................................... 162 4.8.3 Financing Projects .................................................................................................................................. 162 4.8.4 Foreign Exchange Control Risks............................................................................................................ 163 4.8.5 The Banking System .............................................................................................................................. 163 4.8.6 Financial Contact Information................................................................................................................ 163 4.9 Travel Risks 166 4.9.1 Local Business Practices ........................................................................................................................ 167 4.9.2 Travel Issues........................................................................................................................................... 168 4.9.3 Holidays ................................................................................................................................................. 168 4.9.4 Country Data .......................................................................................................................................... 169 4.10 Key Contacts 169 4.10.1 U.S. Contacts.......................................................................................................................................... 169 4.10.2 Czech Investment Contacts .................................................................................................................... 171 4.10.3 Czech Government Contacts .................................................................................................................. 172
5
DISCLAIMERS, WARRANTEES, AND USER AGREEMENT PROVISIONS .........174
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5.1
Disclaimers & Safe Harbor
174
5.2
Icon Group International, Inc. User Agreement Provisions
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1 1.1
INTRODUCTION & METHODOLOGY WHAT DOES THIS REPORT COVER?
The primary audience for this report is managers involved with the highest levels of the strategic planning process and consultants who help their clients with this task. The user will not only benefit from the hundreds of hours that went into the methodology and its application, but also from its alternative perspective on strategic planning relating to e-commerce in Czech Republic. As the editor of this report, I am drawing on a methodology developed at INSEAD, an international business school (www.insead.edu). For any given industry or sector, including ecommerce, the methodology decomposes a country’s strategic potential along four key dimensions: (1) latent demand, (2) micro-accessibility, (3) proxy operating pro-forma financials, and (4) macro-accessibility. A country may have very high latent demand, yet have low accessibility, making it a less attractive market than many smaller potential countries having higher levels of accessibility. With this perspective, this report provides both a micro and a macro strategic profile of ecommerce in Czech Republic. It does so by compiling published information that directly relates to latent demand and accessibility, either at the micro or macro level. The reader new to Czech Republic can quickly understand where Czech Republic fits into a firm’s strategic perspective. In Chapter 2, the report investigates latent demand and micro-accessibility for e-commerce in Czech Republic. In Chapters 3 and 4, the report covers proxy operating pro-forma financials and macroaccessibility in Czech Republic. Macro-accessibility is a general evaluation of investment and business conditions in Czech Republic.
1.2
HOW TO STRATEGICALLY EVALUATE CZECH REPUBLIC
Perhaps the most efficient way of evaluating Czech Republic is to consider key dimensions which themselves are composites of multiple factors. Composite portfolio approaches have long been used by strategic planners. The biggest challenge in this approach is to choose the appropriate factors that are the most relevant to international planning. The two measures of greatest relevance to e-commerce are “latent demand” and “market accessibility”. The figure below summarizes the key dimensions and recommendations of such an approach. Using these two composites, one can prioritize all countries of the world. Countries of high latent demand and high relative accessibility (e.g. easier entry for one firm compared to other firms) are given highest priority. The figure below shows two different scenarios. Accessibility is defined as a firm’s ease of entering or supplying from or to a market (the “supply side”), and latent demand is an indicator of the potential in serving from or to the market (the “demand side”).
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Framework for Prioritizing Countries Demand/Market Potential Driven Firm
High
Highest Priority
High Priority Latent Demand
Moderate Priority Low Priority
Low
Lowest Priority Low
High Relative Accessibility
Accessibility/Supply Averse Firm High Highest Priority High Priority Latent Demand
Moderate Priority Low Priority Lowest Priority
Low High
Low Relative Accessibility
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Introduction & Methodology
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In the top figure, the firm is driven by market potential, whereas the bottom figure represents a firm that is driven by costs or by an aversion to difficult markets. This report treats the reader as coming from a “generic firm” approaching the global market – neither a market-driven nor a costdriven company. Planners must therefore augment this report with their own company-specific factors that might change the priorities (e.g. a Canadian firm may have higher accessibility in Canada than a German firm).
1.3
LATENT DEMAND AND ACCESSIBILITY IN CZECH REPUBLIC
This report provides a detailed overview of factors driving latent demand and accessibility for ecommerce in Czech Republic. Latent demand is largely driven by economic fundamentals specific to e-commerce. This topic is discussed in Chapter 2 using work carried out in Czech Republic on behalf of American firms and authored by the United States government (typically commercial attachés or similar persons in local offices of the U.S. Department of State). I have included a number of edits to clarify the information provided. Latent demand only represents half of the picture. Chapter 2 also deals with micro-accessibility for e-commerce in Czech Republic. I use the term “micro” since the discussion is focused specifically on e-commerce. Chapter 3 is also a stand-alone report that I have authored. It covers proxy pro-forma financial indicators of firms operating in Czech Republic. I use the word “proxy” because the provided figures only cover a “what if” scenario, based on actual operating results for firms in Czech Republic. The numbers are only indicative of an average firm whose primary activity is in Czech Republic. It covers a vertical analysis of the maximum likelihood balance sheet, income statement, and financial ratios of firms operating in Czech Republic. It does so for a particular Standard Industrial Classification (SIC) code. That code covers “computer programming services”, as defined in Chapter 3. Again, while “computer programming services” does not exactly equate to “e-commerce”, it nevertheless gives an indicator of how Czech Republic compares to other countries for a proxy adjacent category along various dimensions. Chapter 4 deals with macro-accessibility and covers factors that go beyond e-commerce. A country may at first sight appear to be attractive due to a high latent demand, but it is often less attractive when one considers at the macro level how easy it might be to serve that entire potential and/or general business risks. While accessibility will always vary from one company to another for a given country, the following domains are typically considered when evaluating macroaccessibility in Czech Republic: •
Openness to Trade in Czech Republic
•
Openness to Direct Investment in Czech Republic
•
Local Marketing and Entry Strategy Alternatives
•
Local Human Resources
•
Local Risks
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Introduction & Methodology
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Across these domains, a number of not-so-obvious factors can affect accessibility and risk. These are covered in the Chapter 4, which is a general overview of investment and business conditions in Czech Republic. Chapter 4 is also presented from the perspective of an American firm, though is equally applicable to most firms entering Czech Republic. This chapter is also authored by local offices of the U.S. government, as is Chapter 2. Likewise, I have included a number of edits to clarify the provided information as it relates to the general strategic framework mentioned earlier.
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2
E-COMMERCE IN CZECH REPUBLIC
2.1
LATENT DEMAND AND ACCESSIBILITY: BACKGROUND
E-Commerce, part of IT industry in the Czech Republic, is experiencing growth of 12.6, to 14% this year, almost twice the growth rate of the country’s economy overall. In comparison to domestic information technology investments and GDP, the Czech Republic averages the same rates of growth as Western Europe. The market is highly competitive, with high standards U.S. and European firms, and increasingly competitive Czech firms. Strong competitive and low Czech purchasing power mean that companies must keep prices low to win business. The recent decline of U.S. dollar makes U.S. companies more competitive than European competitors. Czech EU accession gives the Europeans slight edge in tariff rates. U.S. companies with niche products and services will continue to find good opportunities and few market access barriers. The best market entry strategy continues to be working with a local partner, either an agent or OEM. Selling to Czech government is possible, even though it takes a long time for the process to be completed. Google, the world’s largest Internet firm is present in the Czech Republic. The company acquired Google.cz domain, where it posted advertisement, looking for personnel to head the engineering center in this country. The company is planning to build a customer support center and sales call center for Central and Eastern Europe.
2.2
LATENT DEMAND: MARKET COMPOSITION
E-business development is strongly effected by access to the Web, telecommunication tariffs and the legal environment. Access to the Internet is very well developed. The Internet Service Provider (ISP) is very competitive with the largest IPSs offering free Internet connection. The e-Commerce sector has developed rapidly over the last few years. The lower prices and new sales strategies for PCs, especially the installment payment plans for computers with Internet access, has led to an increase in the number of home PCs. The need to ‘keep in touch’ also plays a major role. The Czech government is pursuing ‘Computer Literacy’ strategy for the fifth year now. Use of Internet is more developed in the entrepreneurial sector. The vast majority of Czech companies have access to the Internet. The following three factors are influencing the growth of e-commerce: •
High speed.
•
High quality access to the Internet.
•
A good legal environment.
•
Well developed payment and goods delivery systems.
2.3
LATENT DEMAND: DYNAMICS
The most important e-business market segments are B2B and B2C e-business. Implementing B2B strategy enables a company to become part of the ‘new economy’. While most Czech consumers still do not regularly shop online, interest in e-commerce is growing and in increasing numbers of Czechs are surfing and buying on the Web. During 2006, e-commerce in the Czech Republic grew by www.icongrouponline.com
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E-Commerce
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more than 13%, reaching almost USD 464.3 million in B2C sales and 351.2 million in B2B. The number of Internet users with e-shopping experience currently exceeds 431,705 and rose steadily in 2006. The gap between end-use procurement and process-use-e-commerce narrowed significantly last year, and the former is now only slightly ahead. Another important trend having positive effect on e-business in the Czech Republic is the strong growth of electronic banking. A number of factors have supported this growth. Credit card use is on rise, and lower telecommunication tariffs have prompted more Czech consumers to get online. During 2004, Ceska Sporitelna, a major Czech bank, began providing secure e-commerce transactions to online retailers, Finally, at the end of 2005 the Ministry of Informatics introduced anti-Spam legislation (further information at www.micr.cz), which has been a benefit to legitimate online business.
2.4
LATENT DEMAND: LEADING SEGMENTS
Best prospect include: •
Software system solutions.
•
Electronic signature products.
•
E-Banking.
•
E-government products.
•
Multimedia applications/training, entertainment.
•
Complex IT solutions supporting the Internet.
•
Application service providing.
Imports and Exports, 2005-2007 (USD Millions) Total Market Size Total Exports Total Imports Imports from U.S.
2005 295 109 201 79
2006 372 117 220 86
2007 (Est.) 395 128 258 112
Source: Czech Statistical Office, CS Prague unofficial estimates
2.5
ACCESSIBILITY: THE STRUCTURE OF COMPETITION
Germany is the Czech Republic’s largest trading partner and the country trades with European countries. United States, as the third largest trading partner has a strong positions and U.S. products are highly thought of. American companies are very competitive in this sector. U.S. companies present on the Czech market include Microsoft, IBM, Hewlet-Packard, Accenture, Logica, Sun Microsystems, Oracle, Auto-Cont and Dell.
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E-Commerce
2.6
LATENT DEMAND: TARGET BUYERS
•
Operators of public networks.
•
Private businesses.
•
Banks.
•
Large production companies.
2.7
7
ACCESSIBILITY: KEY FACTORS
The Czech Republic, as a member of EU since 2004, harmonized its customs and market access conditions with EU. CR has adopted a tariff code wit an average IT rate 4.6%. Czech Republic adheres to WTO rules on custom’s valuation, therefore, applies the same rules as used by U.S. customs for imports into the United States. Czech Republic takes part in international agreements, addressing protection of intellectual property rights. The Czech Republic has one of the lowest software piracy in Europe. Industrial applications are governed by quality norms, e.g. ISO 9000. Although the norms are not laws, they are considered as standards used for use in foreign markets.
2.8
ACCESSIBILITY: MARKET ENTRY
The Czech Republic is geographically small, with 10.1% of the population and most decision makers concentrated in the capital city of Prague. The country has a well developed, European style distribution system and a strong network of professional sales agents and distributors. It is a market, where good personal relationships are crucial and everyone seems to know everyone else. U.S. firms should concentrate first on building a close network of contacts and relationships; this requires face-to-face meetings with the goal of finding and supporting a Czech partner, agent, or distributor. A distributor with existing distribution system and good network can offer coverage of the entire country. In general, agents or distributors will expect exclusivity.
2.9
KEY CONTACTS
•
American Chamber of Commerce in the Czech Republic (AmCham): www.amcham.cz
•
General Director of Customs: www.cs.mfcr.cz
•
Czech Certification Office: www.unmz.cz
•
Ministry of Finance: www.mfcr.cz
•
Ministry of Informatics: www.micr.cz
•
E-commerce Section Director: Mr Martin Plisek:
[email protected]
•
Telecommunicaton Office (Government appointed ‘watchdog’): www.ctu.cz
•
The Associaton for Electronic Commerce: www.apek.cz
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E-Commerce •
Center for Electronic Commerce: www.e-commerce.cz
•
Czech Association of Competitive Communications: www.cakk.cz
•
Information System: www.usiscr.cz
2.10
8
ACCESSIBILITY: TRADE EVENT
INVEX – DIGITEX October 23-27, 2007 International Fair of Information and Communication Technologies Invex is the largest IT Show in Central/Eastern Europe. It’s ranked one of the top four worldwide fairs in the branch. It includes 600 exhibitors from 19 countries, with almost 138,000 visitors.
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3 3.1
FINANCIAL INDICATORS: COMPUTER PROGRAMMING SERVICES OVERVIEW
Is Czech Republic competitive? With the globalization of markets, the increased mobility of corporate assets, and the need for productive human resources, this question has become all the more complex to answer. The financial indicators section was prepared to tackle this question by focusing on certain fundamentals: financial performance and labor productivity. Rather than focus on the economy as a whole, the analysis presented here considers only one sector: computer programming services. We are essentially interested in the degree to which firms operating in Czech Republic have fundamentally different financial structures and performance compared to firms located elsewhere. With respect to this view of competitiveness, if one were to invest or operate in Czech Republic, how would the firm’s asset structure likely vary compared to a firm operating in some other country in Europe or average location in the world? In Czech Republic, do firms typically hold more cash and other short term assets, or do they concentrate their assets in physical plant and equipment? On the liability side, do firms operating in Czech Republic have a higher percent of payables compared to other firms operating in Europe, or do they hold a higher concentration of long term debt? The structure of the income statement is also telling. Do firms operating in Czech Republic have relatively higher costs of goods sold, operating costs, or income taxes compared to firms located elsewhere in the region or the world in general? Are returns on equity higher in Czech Republic? Are profit margins greater? Are inventories held longer? The financial indicators section was designed to answer these and similar questions that naturally affect one’s decision to invest or operate in Czech Republic. Again, we are particularly interested in computer programming services, and not the economy as a whole. In many instances, people make all the difference. In addition to financial competitiveness, we consider the extent to which labor deployment and productivity in Czech Republic differs from regional and global benchmarks. In this case, we are interested in the amount of labor required to operate a typical business in Czech Republic and the likely returns on this human investment. What is the typical ratio of short-term and long-term assets to employee (employed in computer programming services operations)? What are typical capital-labor ratios? How different are these ratios to those in Europe in general and the world as a whole? What are the average sales and net profits per employee in Czech Republic compared to regional benchmarks? The goal of this section is to assist managers in gauging the competitive performance of Czech Republic at the global level for computer programming services. With the globalization of markets, greater foreign competition, and the reduction of entry barriers, it becomes all the more important to benchmark Czech Republic against other countries on a worldwide basis. Doing so, however, is not an obvious task. This report generates international benchmarks and measures gaps that might be revealed from such an exercise. First, data is collected from companies across all regions of the world. For each of these firms, data are standardized into comparable categories (assets, liabilities, income and ratios), by country, region and on a worldwide basis. From there, we eliminate all currency effects by standardizing within each category. Global benchmarks are then compared to those estimated for computer programming services in Czech Republic. Though we heavily rely on historical performance, the figures reported are not historical but are forecasts and projections for the coming fiscal year.
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Financial Indicators
3.1.1
10
Financial Returns and Gaps in Czech Republic
The approach used in this report to evaluate operating performance for computer programming services in Czech Republic is called "vertical analysis." For those unfamiliar with this type of analysis, frequently taught in graduate schools of business, the reader is recommended Jae K. Shim and Joel G. Siegel’s recent book titled Financial Management.1 In their discussion of financial statement analysis and ratios, Skim and Siegel (p. 42-43), describe common-size statement (vertical analysis) as follows: A common-size statement is one that shows each item in percentage terms. Preparation of common-size statements is known as vertical analysis, in which a material financial statement item is used as a base value and all other accounts on the financial statement are compared to it. In the balance sheet, for example, total assets equal 100 percent, and each individual asset is stated as a percentage of total assets. Similarly, total liabilities and stockholders’ equity are assigned a value of 100 percent and each liability or equity account is then stated as a percentage of total liabilities and stockholders’ equity, respectively. … For the income statement, a value of 100 percent is assigned to net sales, and all other revenues and expense accounts are related to it. It is possible to see at a glance how each dollar of sales is distributed among various costs, expenses, and profits. The authors suggest that vertical analyses involve industry-based comparisons. Such a comparison “allows you to answer the question, ‘How does a business fare in the industry?’ You must compare the company’s ratios to… industry norms.” (p. 43-44) This approach is extended to country competitiveness (in this case Czech Republic) for a particular sector (in this case computer programming services). This involves calculating country, regional and global norms. This introduction will describe the seven-stage methodology used to perform this analysis. Each stage should be seen as a working assumption behind the numbers presented in later chapters. Stage 1. Industry Classification. This stage begins by classifying the company into an industry. For this, we have relied on a combination of the North American Industry Classification System (NAICS pronounced “Nakes”), a relatively new system for classifying business establishments, and the older Standard Industrial Classification (SIC) system. Adopted in 1997, NAICS codes are the new industry classification codes used by statistical agencies of the United States. NAICS was developed jointly by the U.S., Canada, and Mexico to provide comparability in statistics about business activity across North America. After 60 years of service, the outdated SIC system was retired on October 1, 2000, leaving only the NAICS codes for official use. The NAICS classification system adds some 350 new industries and represents a revision to over 60% of the previous SIC industries. Despite its official retirement, the SIC system is still commonly used (and often reported in firm’s financial statements). For most companies in the world, classification within either the new NAICS or older SIC systems is a rather straight forward exercise. For some, however, it can be problematic. This is true for several reasons. The first being that the SIC or NAICS classification systems are rather broad for many product and industry categories (a firm’s products or services may be only a minor aspect of the classification’s definition). The second is that some firms’ activities span multiple codes. Finally, it is possible that a firm is classified by one source using its SIC code, and by another using its NAICS code, and by a third using both. Furthermore, some sources do not report either code, but instead use qualitative statements of the firm’s activities. Nevertheless, if one wishes to pursue a vertical analysis, some classification needs to take place which selects a peer group. In making this classification, one can rely on a number of sources. In some countries, firms must “self” classify in official periodic reports (e.g. annular reports, 10Ks, etc.) to public authorities (such as the Securities and Exchange Commission). These reports are then open for public scrutiny (e.g. EDGAR filings). In other cases, commercial data vendors or private research firms provide SIC/NAICS codes for specific companies. These include: •
Bloomberg - www.bloomberg.com
•
Datastream (Thomson Financial) - www.datastream.com
1
Skim and Siegel (2000), Financial Management published by Barron’s Educational Series, Inc. (BARON’S BUSINESS LIBRARY Series), ISBN: 0-7641-1402-6. www.icongrouponline.com
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Financial Indicators •
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Dun & Bradstreet - www.dnb.com
•
Hoovers - www.hoovers.com
•
HarrisInfoSource - www.HarrisInfo.com
•
InfoUSA - www.infousa.com
•
Investext (Thomson Financial) - www.investext.com
•
Kompass International Neuenschwander SA. – www.kompass.com
•
Moody's Investors Service - www.moodys.com
•
Primark (Thomson Financial) - www.primark.com
•
Profound (The Dialog Corporation – A Thomson Company) - www.profound.com
•
Reuters - www.reuters.com
•
Standard & Poor's - www.standardandpoors.com
It is interesting to note that commercial vendors often report different qualitative descriptions and industrial classifications from one to another. These descriptions and classifications may also be different from those reported by the firm itself. Anyone hoping to perform a benchmarking study, therefore, has to make a judgment call across these various sources in order to determine a reasonable classification. In this report, we have decided a metaanalytic process, by combining various sources (including linking a classification’s keywords to qualitative descriptions of the firm’s product line). In cases of inconsistency, the most recent or globally comparable available is chosen. Again, the overall goal is to classify firms, which either produce similar products, offer similar services, or are in the same stage of the value chain for a particular industrial classification. In the case of this report, the SIC code selected is: 7371 which is defined as “computer programming services”. This classification should be seen as a working assumption. In order to obtain a more detailed discussion of this classification, the reader is referred to the Web sites developed by the U.S. Census Bureau: http://www.census.gov/epcd/www/naics.html. Basic definitions and descriptions are provided at: http://www.census.gov/epcd/www/drnaics.htm#q1. A full correspondence table between SIC and NAICS codes, and detailed definitions are given at http://www.census.gov/epcd/www/naicstab.htm. Stage 2. Firm-Level Data Collection. A global search was conducted across over 20,000 companies in over 40 major economies, including Czech Republic, for those that report financials (balance sheet and income statements) and that are involved in computer programming services. It should be noted that the public-domain financials can be either historic or projections. It should also be noted that even historic figures can be modified in the future and often represent “estimates” of performance. Stage 3. Standardization. Once collected, public domain financial figures of firms identified in Stage 2 are standardize into comparable categories (assets, liabilities, and income). Again, these are limited to firms involved in some aspect of computer programming services (i.e. are members of the value chain). From there, we eliminate all currency effects by standardizing within each category (creating ratios). In order to maintain comparability over time and across countries, vertical analysis is used. In the case of a firm’s assets, we treat the total assets as equaling 100, irrespective of the value of the local currency. All other assets are then calculated as a percent of total assets. In this way, the structure of the firm’s assets can be easily interpreted and compared with international benchmarks. For liabilities, total liabilities and equity are indexed to equal to 100. For the income statement, total revenue is indexed to equal 100, and all other figures are calculated as a percent of these figures. Stage 4. Filtering. Not all the firms selected in Stage 2 or the ratios calculated in Stage 3 are used for the country, regional or global benchmarks, as a number of companies are purposely dropped from the analysis. This is justified by the “outlier” phenomenon that plagues such analysis. The problem lies in that any given company in the benchmarking pool may be facing some exceptional event or may be organized in an exceptional way so as to make its ratios vastly different from the norm. By including such firms, the global benchmarks can be overly skewed. In many countries, firms are organized into holding groups. These groups nominally have very few employees (e.g. 4
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12
to 25 employees), but have extremely large assets, liabilities, or revenues. As such, the inclusion or exclusion of firms having this form of management can affect the ratios and benchmarks reported. Likewise, some firms have no net sales, no assets, no liabilities, or ratios. Others have ratios that appear implausible for a normal or viable company. In order to not allow these firms to affect the global benchmarks, only those firms with reasonable financials have been chosen. Finally, in some countries, detailed financials are not available or are not comparable to either the company in question or the global norm (e.g. various forms of depreciation). In this case, only those which exist and are comparable are reported. The details, therefore, that comprise a given ratio or set of ratios may not be reported. This may lead to the addition of several ratios, not summing to the whole. Stage 5. Calculation of Global Norms. Once the filtering process has eliminated outliers, a final list of companies included is compiled. Based on this list, the ratios discussed in Stage 3 are calculated for every firm, and then averaged to create country, regional and global benchmarks. The world average is calculated using each country’s population as a weight. Stage 6. Projection of Deviations. The goal of this report is not only to estimate raw ratios or averages, but also to present the difference between Czech Republic and projected global averages for that same ratio. Furthermore, it can be insightful to know the location of each ratio within the distribution of the countries represented in Stage 5. These deviations, in fact, can be seen as projections or likely scenarios for the future. This is often true for two reasons. First, while a company’s financials change from year to year, its ratios are often stable. This is especially true for the country, regional and global benchmarks which represent averages across companies. From a purely Bayesian sense, the difference between the company’s recent ratios and the benchmarks are a reasonable prior for future deviations. This is true, even if the entire industry is hit by an external or exogenous shock, such as an oil crisis or economic slowdown. In other words, we assume that the structure of the variance in the industry’s financials remains stable. Second, many of the data are based on preliminary reports that might be changed in future filings. As forecasts, therefore, the numbers derived from these are also forecasts of past and future performance (with associated uncertainties). The calculation of the difference between a country’s ratios and the global benchmarks is meant to yield roughly approximate forecasts, or "useful measures". Within Europe, the reliability of estimates varies from one country to another for those ratios given in tables that report national averages. This is true because reliable source statistics are not available for all countries in Europe. Countries with the highest reliability, or sample sizes after filtering in Stage 4, include Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Italy, Luxembourg, Spain, Sweden, and United Kingdom. Others are generally econometrically extrapolated using models that use country characteristics (e.g. income per capita) as independent variables (i.e. countries having similar economic structures are assumed to have similar operating ratios). Again, the forecasts are based on the assumption of relative stability. This assumption has proven extremely robust in previous applications of this methodology (i.e. today’s weather is a good predictor of tomorrow’s weather, but not the weather three years from now). The results reported should be viewed as those for a “proto-typical” firm operating in Czech Republic whose primary activity is computer programming services. Stage 7. Projection of Ranks and Percentiles. Based on the calculation of deviations, relative ranks and percentiles are calculated across the firms used in the benchmarks. The percentile estimates the percent of a representative sample of countries in the world having values of the ratio lower than Czech Republic. It is important to note that a percentile being high (or low) does not mean good (or bad) past, present or future financial performance. The reader must draw this conclusion on their own. The estimates provided were created to provide managerial insight, and not a recommendation with respect to particular investments within any country. We graphically report, for each part of the financial statement, the larger structural differences between Czech Republic and the regional and global benchmarks, and provide a summary table of ranks and percentiles. These are estimates for firm which would be involved in computer programming services. A deviation from the global norm need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or perhaps signal a country's relative strength or weakness for the coming fiscal year.
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3.1.2
13
Labor Productivity Gaps in Czech Republic
In the case of labor productivity measures, this report maintains comparability over time and across countries by using a common currency (the US dollar) and relates each measure to a “per employee basis”. Ratios are projected using raw financial statistics and, as ratios, are therefore comparable. Given a country’s human resource ratios, the resulting figures are benchmarked across regional and global averages. The seven stage approach given above is used in a similar manner. We then report, for each part of the financial statement, the larger labor productivity gaps that Czech Republic has vis-à-vis the worldwide average (for computer programming services). Again, a gap need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or signal a firm’s relative incentive to invest locally. All figures are projections, so due caution is required.
3.1.3
Limitations and Extensions
Shim and Siegal (p. 60) stress that “while ratio analysis is an effective tool for assessing a company’s financial condition,” operating Czech Republic or any other country, “its limitations must be recognized.” They find that (p. 59) “no single ratio or group of ratios is adequate for assessing all aspects of a company’s financial condition” operating in a particular country. The authors note the following limitations associated with ratio analyses which apply to the global benchmarking and vertical analysis presented here (p.60): •
Accounting standards or policies may limit useful comparisons across companies
•
Management accounting practices across companies and countries may not be performed in the same style
•
Ratios are static and do not reveal future trends
•
Ratios do not indicate the quality of the components used to calculate the ratios (i.e. ratios have ambiguous interpretations)
•
Reported ratios may not reflect real values
•
Companies may be highly diversified, limiting the comparability of their ratios to others
•
Industry averages or norms are approximate; finer industry definitions may be required for certain interpretations or comparisons
•
Financial statements and resulting ratios often mean different things to different people depending on their points of view or motivations.
Again, all figures reported here are estimates, so due caution is required. The above caveats, and the fact that statements made in this report are forward-looking, requires that this point be emphasized. A number of intervening factors can have material effect on the ratios and variances forecasted. These include changes in a company's management style, exchange rate volatility, changes in accounting standards, the lack of oversight or comparability in accounting standards, changes in economic conditions, changes in competition, changes in the global economy, changes in source data quality, and similar factors.
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Financial Indicators
3.2 3.2.1
14
FINANCIAL RETURNS IN CZECH REPUBLIC: ASSET STRUCTURE RATIOS Overview
In this chapter we consider the asset structure of companies involved in computer programming services operating in Czech Republic benchmarked against global averages. The chapter begins by defining relevant terms. A commonsize statement, or vertical analysis of assets is then presented for companies operating in Czech Republic and the average global benchmarks (total assets = 100 percent). For ratios where there are large deviations between Czech Republic and the benchmarks, graphics are provided (sometimes referred to as a financial “gap” analysis). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key vertical analysis asset ratios are highlighted across countries in the comparison group.
3.2.2
Assets – Definitions of Terms
The following definitions are provided for those less familiar with the asset-side of financial statement analysis. As this chapter deals with the vertical analysis and global benchmarking of assets, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •
Accumulated Depreciation - Buildings. Accumulated depreciation is commonly understood as a contra asset account used to report the accumulation of periodic credits to reflect the use of the estimated service life of a fixed asset. Buildings are fixed assets which represent the acquisition and improvement costs of permanent structures owned or held by the company. Such structures typically include office buildings, storage quarters, or other facilities and also associated items such as loading docks, heating and airconditioning equipment, refrigeration equipment, and all other property permanently attached to or forming an integral part of the structure. However, it generally does not include furniture, fixtures, or other equipment which are not an integral part of the building.
•
Accumulated Depreciation - Land. Accumulated depreciation of land is commonly understood as a contra asset account used to report the accumulation of periodic credits to reflect the use of the estimated service life of land as a fixed asset. If land is purchased, its capitalized value typically includes the purchase price plus costs such as legal fees, filling and excavation costs which are incurred to put the land in condition for its intended use. If land is acquired by gift, its capitalized value typically reflects its appraised value at time of acquisition. Land does not typically include depletable resources.
•
Accumulated Depreciation - Transportation Equipment. Accumulated depreciation of transportation equipment is commonly understood to be contra asset account used to report the accumulation of periodic credits to reflect the use of the estimated service life of transportation equipment.
•
Accumulated Depreciation -Machinery & Equipment. Accumulated depreciation of machinery and equipment is commonly understood to be contra asset account used to report the accumulation of periodic credits to reflect the use of the estimated service life of machinery and equipment.
•
Buildings. Buildings are defined as fixed assets which represent the acquisition and improvement costs of permanent structures owned or held by the company. Such structures include office buildings, storage quarters, or other facilities and also associated items such as loading docks, heating and air-conditioning
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equipment, refrigeration equipment, and all other property permanently attached to or forming an integral part of the structure. However, it does not include furniture, fixtures, or other equipment which are not an integral part of the building. •
Cash. Cash is typically defined as money on hand, on deposit with chartered bank, or held in the form of eligible securities.
•
Current Assets. Current assets are generally defined to be resources which are available, or can readily be made available, to meet the cost of operations or to pay current liabilities.
•
Intangible Other Assets. Intangible assets are generally understood to be nonphysical assets such as legal rights (patents and trademarks) recorded at their historical cost then reduced by systematic amortization.
•
Investments in Unconsolidated Subsidiaries. Investments in unconsolidated subsidiaries are typically defined as investments for the purpose of generating revenue in subsidiaries whose financial statements are not combined with the company's.
•
land. Land is generally considered to be a fixed asset. If land is purchased, its capitalized value typically includes the purchase price plus costs such as legal fees, filling and excavation costs which are incurred to put the land in condition for its intended use. If land is acquired by gift, its capitalized value typically reflects its appraised value at the time of acquisition. Land typically does not include depletable resources.
•
long Term Receivables. Long-term receivables are commonly defined as amounts due within a period exceeding one year from private persons, businesses, agencies, funds, or governmental units which are expected to be collected in the form of moneys, goods, and/or services.
•
Machinery & Equipment. Machinery and equipment is commonly defined as a fixed asset classification which typically includes tangible property (other than land, buildings, and improvements other than buildings) with a life of more than one year. Such assets typically include office equipment, furniture, machine tools, and motor vehicles. Equipment may be attached to a structure for purposes of securing the item, but unless it is permanently attached to an integral part of the building or structure, it will generally be classified as equipment and not buildings. Equipment is generally defined as tangible property other than land, buildings, or improvements other than buildings, which is used in operations. Examples include machinery, tools, trucks, cars, furniture, and furnishings.
•
Prepaid Expenses. Prepaid expenses are typically defined as those supplies and/or services (not inventory) acquired or purchased but not consumed or used at the end of the accounting period.
•
Property Plant and Equipment - Gross. Gross property, plant and equipment generally consists of the gross book value (rather than the more commonly-used measures of fixed capital stocks in current or real value), of all commercial buildings, associated land and equipment used therein that are owned by the company and that are either used or operated by the company or leased or rented to others.
•
Property Plant and Equipment - Net. Net PP&E equals the original cost of property, plant, and equipment (PP&E), less accumulated depreciation, depletion and amortization (DD&A).
•
Receivables (Net). Net receivables are defined as the net amount due to the company from private persons, businesses, agencies, funds, or governmental units which is expected to be collected in the form of moneys, goods, and/or services.
•
Short Term Investments. Short-term investments are investments which can be typically liquidated in less than one year.
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•
Total Assets. Total assets are defined as the financial representation of economic resources, the beneficial interest in which is legally or equitably secured to a particular organization as a result of a past transaction or event.
•
Total Inventories. Total inventories are defined as the total amount of goods on hand.
•
Transportation Equipment. Transportation equipment is equipment used for the transportation of goods for sale.
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3.2.3
17
Asset Structure: Outlook
Using the methodology described in the introduction, the following table summarizes asset structure benchmarks for firms involved in computer programming services in Czech Republic. To allow comparable benchmarking, a common index of Total Assets = 100 is used. All figures are current-year projections for companies operating in Czech Republic based on latest financial results available. Asset Structure Czech Republic Europe World Avg. _________________________________________________________________________________________________________
Cash & Short Term Investments Cash Receivables (Net) Total Inventories Prepaid Expenses Other Current Assets Current Assets - Total Long Term Receivables Investments in Unconsolidated Subsidiaries Property Plant and Equipment - Net Property Plant and Equipment - Gross Land Buildings Machinery & Equipment Transportation Equipment Other Property Plant & Equipment Accumulated Depreciation - Total Accumulated Depreciation - Land Accumulated Depreciation - Buildings Accumulated Depreciation -Machinery & Equipment Accumulated Depreciation - Transportation Equipment Accumulated Depreciation - Other Prop & Equip Other Assets Intangible Other Assets Total Assets
29.89 24.51 17.03 1.04 1.58 0.36 49.12 2.45 4.34 44.62 76.98 2.71 55.57 8.84 2.96 6.89 31.96 0.12 20.39 7.38 1.58 2.48 2.87 1.48 100.00
18.36 11.91 32.42 5.30 1.04 4.81 61.66 1.22 3.92 18.52 35.27 1.96 10.23 20.03 3.06 6.41 15.73 0.14 2.97 7.55 0.95 3.84 11.86 10.12 100.00
19.43 9.28 24.30 6.66 1.28 3.28 54.42 1.18 4.34 20.33 36.43 1.69 6.92 14.77 1.58 10.71 15.09 0.01 1.16 4.85 0.39 4.74 10.81 7.06 100.00
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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3.2.4
18
Large Variances: Assets
The following graphics summarize for computer programming services the large asset structure gaps between firms operating in Czech Republic and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.
Gap: Cash & Short Term Investments 30
29.89
25
19.43
18.36
20 15
10.46
10 5 0 Czech Republic
Europe
World Average
Gap
Gap: Cash 25
24.51
20
15.23
15
11.91
10
9.28
5 0 Czech Republic
Europe
World Average
Gap
Gap: Receivables (Net) 40
32.42
30 20
24.3 17.03
10 0 -7.27
-10 Czech Republic
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World Average
Gap
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Financial Indicators
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Gap: Total Inventories 10 5
5.3
6.66
1.04
0 -5
-5.62
-10 Czech Republic
Europe
World Average
Gap
Gap: Property Plant and Equipment - Net 50
44.62
40 30 18.52
20
20.33
24.29
10 0 Czech Republic
Europe
World Average
Gap
Gap: Property Plant and Equipment - Gross 80
76.98
60 35.27
40
36.43
40.55
20 0 Czech Republic
Europe
World Average
Gap
Gap: Buildings 60
55.57
48.65
50 40 30 20
10.23
10
6.92
0 Czech Republic
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World Average
Gap
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Gap: Machinery & Equipment 25 20 15 10 5 0 -5 -10
20.03 14.77 8.84
-5.93 Czech Republic
Europe
World Average
Gap
Gap: Accumulated Depreciation - Total 40
31.96
30 15.73
20
15.09
16.87
10 0 Czech Republic
Europe
World Average
Gap
Gap: Accumulated Depreciation - Buildings 25
20.39
19.23
20 15 10 2.97
5
1.16
0 Czech Republic
Europe
World Average
Gap
Gap: Other Assets 15
11.86
10.81
10 5
2.87
0 -5
-7.94
-10 Czech Republic
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Europe
World Average
Gap
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Financial Indicators
3.2.5
21
Key Percentiles and Rankings
We now consider the distribution of asset ratios for computer programming services using ranks and percentiles. What percent of countries have a value lower or higher than Czech Republic (what is the ratio's rank or percentile)? The table below answers this question with respect to the vertical analysis of asset structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key vertical asset ratios are highlighted in additional tables. Asset Structure
Czech Republic
Rank of Total
Percentile
29.89 24.51 17.03 1.04 1.58 0.36 49.12 2.45 4.34 44.62 76.98 2.71 55.57 8.84 2.96 6.89 31.96 0.12 20.39 7.38 1.58 2.48 2.87 1.48 100.00
5 of 53 2 of 50 47 of 53 44 of 49 10 of 39 44 of 47 46 of 52 8 of 41 9 of 43 4 of 53 4 of 50 13 of 30 1 of 47 34 of 45 11 of 41 28 of 50 8 of 48 3 of 8 1 of 40 20 of 39 6 of 35 31 of 44 48 of 53 38 of 44
90.57 96.00 11.32 10.20 74.36 6.38 11.54 80.49 79.07 92.45 92.00 56.67 97.87 24.44 73.17 44.00 83.33 62.50 97.50 48.72 82.86 29.55 9.43 13.64
_________________________________________________________________________________________________________
Cash & Short Term Investments Cash Receivables (Net) Total Inventories Prepaid Expenses Other Current Assets Current Assets - Total Long Term Receivables Investments in Unconsolidated Subsidiaries Property Plant and Equipment - Net Property Plant and Equipment - Gross Land Buildings Machinery & Equipment Transportation Equipment Other Property Plant & Equipment Accumulated Depreciation - Total Accumulated Depreciation - Land Accumulated Depreciation - Buildings Accumulated Depreciation -Machinery & Equipment Accumulated Depreciation - Transportation Equipment Accumulated Depreciation - Other Prop & Equip Other Assets Intangible Other Assets Total Assets
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Cash & Short Term Investments Countries
Value (total assets = 100)
Rank
Percentile
49.18 35.01 32.34 31.75 29.89 29.77 29.66 29.43 28.70 28.40 28.31 28.00 27.75 26.29 25.43 25.24 24.20 24.12 22.75 21.40 21.08 20.49 19.51 19.26 19.18 18.42 18.07 17.94 16.95 16.68 16.33 15.89 14.56 12.92 12.51 12.42 12.28 6.96 6.86 6.84 4.84 4.73 3.86 3.75 1.02
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 20 22 23 24 25 26 27 28 29 30 32 33 34 35 36 39 40 41 42 44 45 46 48 49 50 51 53
98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 62.26 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 39.62 37.74 35.85 33.96 32.08 26.42 24.53 22.64 20.75 16.98 15.09 13.21 9.43 7.55 5.66 3.77 0.00
Region
_________________________________________________________________________________________________________
New Zealand Israel Denmark Sweden Czech Republic Hong Kong Japan Brazil Germany Canada Singapore Chile USA China Norway South Korea Poland Indonesia Russia Greece Finland Australia Italy Malaysia India Netherlands the United Kingdom South Africa Thailand France Switzerland Ireland Belgium Philippines Luxembourg Hungary Austria Portugal Turkey Mexico Spain Peru Pakistan Taiwan Argentina
Oceana the Middle East Europe Europe Europe Asia Asia Latin America Europe North America Asia Latin America North America Asia Europe Asia Europe Asia Europe Europe Europe Oceana Europe Asia Asia Europe Europe Africa Asia Europe Europe Europe Europe Asia Europe Europe Europe Europe the Middle East Latin America Europe Latin America the Middle East Asia Latin America
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Cash & Short Term Investments (Computer Programming Services) Countries in Europe
Value (total assets = 100)
Rank
Percentile
50.93 32.34 31.75 29.89 28.70 28.55 28.37 28.36 28.03 27.45 25.43 24.33 24.20 23.22 23.17 22.75 22.69 21.76 21.40 21.08 20.94 20.90 19.83 19.67 19.57 19.51 18.42 18.07 16.68 16.33 15.89 15.23 14.56 12.51 12.42 12.28 12.16 11.86 11.86 11.17 10.62 10.45 6.96 6.66 6.52 5.98 5.81 5.61 4.84 4.55 4.13
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Andorra Denmark Sweden Czech Republic Germany Faroe Islands Latvia Croatia Iceland Monaco Norway Estonia Poland Belarus Slovakia Russia Lithuania Moldova Greece Finland Kazakhstan Bulgaria Malta Vatican City Isle of Man Italy Netherlands the United Kingdom France Switzerland Ireland Liechtenstein Belgium Luxembourg Hungary Austria San Marino Guernsey Jersey Ukraine Gibraltar Georgia Portugal Cyprus Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Spain Slovenia Albania
_________________________________________________________________________________________________________
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Financial Indicators
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Receivables (Net) Countries
Value (total assets = 100)
Rank
Percentile
51.67 45.98 45.01 44.19 43.58 43.49 42.95 40.69 39.67 39.52 38.11 36.90 36.78 35.54 34.44 33.63 32.75 31.84 31.78 31.14 30.90 30.43 29.19 28.59 28.48 28.15 27.94 27.87 27.49 26.64 26.02 25.47 25.23 23.84 21.93 21.49 21.28 19.22 18.71 18.48 17.81 17.03 15.91 13.33 4.97
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 32 34 35 37 38 40 41 43 44 45 46 47 49 51 53
98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 39.62 35.85 33.96 30.19 28.30 24.53 22.64 18.87 16.98 15.09 13.21 11.32 7.55 3.77 0.00
Region
_________________________________________________________________________________________________________
Austria Netherlands Portugal Spain France Hungary Ireland Taiwan Greece Belgium Argentina Italy South Africa Poland Norway Singapore Hong Kong the United Kingdom Thailand India Finland Malaysia Sweden Australia Denmark Germany Turkey Mexico Canada Luxembourg Japan USA Switzerland South Korea China Russia Indonesia Philippines Brazil Israel Chile Czech Republic New Zealand Peru Pakistan
Europe Europe Europe Europe Europe Europe Europe Asia Europe Europe Latin America Europe Africa Europe Europe Asia Asia Europe Asia Asia Europe Asia Europe Oceana Europe Europe the Middle East Latin America North America Europe Asia North America Europe Asia Asia Europe Asia Asia Latin America the Middle East Latin America Europe Oceana Latin America the Middle East
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Receivables (Net) (Computer Programming Services) Countries in Europe
Value (total assets = 100)
Rank
Percentile
51.67 51.18 49.90 49.90 45.98 45.01 44.19 43.58 43.49 43.09 42.95 41.49 39.67 39.52 39.11 37.20 37.18 36.90 36.77 36.61 36.28 35.54 34.44 32.61 31.95 31.84 31.41 30.90 30.75 30.69 29.19 28.48 28.15 26.64 26.55 25.73 25.23 24.36 23.68 23.54 22.99 22.84 21.94 21.89 21.49 21.44 17.03 16.47 16.16 16.16 11.63
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Austria San Marino Guernsey Jersey Netherlands Portugal Spain France Hungary Cyprus Ireland Slovenia Greece Belgium Ukraine Vatican City Gibraltar Italy Malta Georgia Isle of Man Poland Norway Monaco Moldova the United Kingdom Faroe Islands Finland Kazakhstan Bulgaria Sweden Denmark Germany Luxembourg Romania Iceland Switzerland Bosnia & Herzegovina Macedonia Liechtenstein Estonia Serbia & Montenegro Belarus Slovakia Russia Lithuania Czech Republic Andorra Latvia Croatia Albania
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
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Financial Indicators
26
Total Inventories Countries
Value (total assets = 100)
Rank
Percentile
34.66 24.37 23.19 12.21 10.75 9.59 9.55 9.42 8.92 8.29 7.77 7.51 7.38 6.76 6.65 6.59 6.53 6.27 5.84 5.74 5.50 5.24 5.13 5.12 5.10 5.05 4.75 4.68 4.67 4.49 4.10 3.97 3.40 2.89 2.46 1.09 1.04 0.79 0.54 0.43 0.16 0.12
1 3 4 5 6 7 8 9 10 12 14 15 16 18 19 20 21 23 24 25 27 28 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49
97.96 93.88 91.84 89.80 87.76 85.71 83.67 81.63 79.59 75.51 71.43 69.39 67.35 63.27 61.22 59.18 57.14 53.06 51.02 48.98 44.90 42.86 38.78 36.73 34.69 32.65 30.61 28.57 26.53 24.49 22.45 20.41 18.37 16.33 14.29 12.24 10.20 8.16 6.12 4.08 2.04 0.00
Region
_________________________________________________________________________________________________________
Peru Brazil Chile South Africa China Hungary Philippines Switzerland Indonesia Norway Greece Spain South Korea Thailand Russia Taiwan Singapore Netherlands Hong Kong Germany Denmark France Malaysia Portugal Sweden Japan Austria Canada Belgium Italy the United Kingdom Poland USA Argentina Australia India Czech Republic Finland Luxembourg Israel Pakistan Ireland
Latin America Latin America Latin America Africa Asia Europe Asia Europe Asia Europe Europe Europe Asia Asia Europe Asia Asia Europe Asia Europe Europe Europe Asia Europe Europe Asia Europe North America Europe Europe Europe Europe North America Latin America Oceana Asia Europe Europe Europe the Middle East the Middle East Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
27
Total Inventories (Computer Programming Services) Countries in Europe
Value (total assets = 100)
Rank
Percentile
30.25 9.59 9.42 8.79 8.63 8.29 8.20 8.08 7.77 7.51 7.20 7.11 7.10 7.05 6.79 6.78 6.65 6.64 6.34 6.27 5.74 5.60 5.50 5.24 5.12 5.10 4.90 4.75 4.71 4.67 4.59 4.59 4.52 4.49 4.10 3.97 3.57 3.44 3.43 3.43 1.04 0.99 0.99 0.79 0.54 0.12
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46
97.83 95.65 93.48 91.30 89.13 86.96 84.78 82.61 80.43 78.26 76.09 73.91 71.74 69.57 67.39 65.22 63.04 60.87 58.70 56.52 54.35 52.17 50.00 47.83 45.65 43.48 41.30 39.13 36.96 34.78 32.61 30.43 28.26 26.09 23.91 21.74 19.57 17.39 15.22 13.04 10.87 8.70 6.52 4.35 2.17 0.00
_________________________________________________________________________________________________________
Albania Hungary Switzerland Liechtenstein Ukraine Norway Gibraltar Georgia Greece Spain Malta Estonia Isle of Man Slovenia Belarus Slovakia Russia Lithuania Monaco Netherlands Germany Faroe Islands Denmark France Portugal Sweden Cyprus Austria San Marino Belgium Jersey Guernsey Vatican City Italy the United Kingdom Poland Moldova Kazakhstan Iceland Bulgaria Czech Republic Latvia Croatia Finland Luxembourg Ireland
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
28
Current Assets - Total Countries
Value (total assets = 100)
Rank
Percentile
79.78 75.99 73.83 73.48 73.46 73.17 73.13 72.48 71.98 70.56 69.91 68.27 67.66 67.63 67.57 67.21 66.37 66.26 66.13 65.09 62.87 62.42 61.66 61.54 60.74 60.57 60.27 60.22 59.55 58.74 58.16 57.59 56.54 55.54 55.46 54.42 54.30 53.58 53.44 53.34 49.12 44.65 42.45 42.37
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 35 37 38 39 40 41 42 46 47 48 49
98.08 96.15 94.23 92.31 90.38 88.46 86.54 84.62 82.69 80.77 78.85 76.92 75.00 73.08 71.15 69.23 67.31 65.38 63.46 61.54 59.62 57.69 55.77 53.85 51.92 50.00 48.08 46.15 44.23 42.31 40.38 38.46 36.54 32.69 28.85 26.92 25.00 23.08 21.15 19.23 11.54 9.62 7.69 5.77
Region
_________________________________________________________________________________________________________
Greece Norway Austria Brazil Denmark Hungary Netherlands Hong Kong Singapore Sweden Chile France Germany Finland Japan South Africa Thailand Poland Italy New Zealand Canada USA Switzerland South Korea Taiwan the United Kingdom China Portugal Belgium Malaysia India Spain Indonesia Ireland Russia Israel Australia Turkey Mexico Peru Czech Republic Philippines Argentina Luxembourg
Europe Europe Europe Latin America Europe Europe Europe Asia Asia Europe Latin America Europe Europe Europe Asia Africa Asia Europe Europe Oceana North America North America Europe Asia Asia Europe Asia Europe Europe Asia Asia Europe Asia Europe Europe the Middle East Oceana the Middle East Latin America Latin America Europe Asia Latin America Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
29
Current Assets - Total (Computer Programming Services) Countries in Europe
Value (total assets = 100)
Rank
Percentile
79.78 75.99 73.94 73.83 73.46 73.17 73.13 73.13 72.97 71.30 71.30 70.56 69.80 69.50 68.27 67.66 67.63 67.40 66.66 66.26 66.13 65.80 63.06 62.56 61.66 61.59 60.57 60.22 59.58 59.55 59.33 57.65 57.59 57.54 57.33 57.23 56.62 56.50 55.54 55.46 55.33 54.06 50.91 49.12 46.72 46.62 46.60 46.56 45.41 43.80 42.37
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Greece Norway Malta Austria Denmark Hungary Netherlands San Marino Isle of Man Guernsey Jersey Sweden Monaco Faroe Islands France Germany Finland Andorra Vatican City Poland Italy Ukraine Iceland Gibraltar Switzerland Georgia the United Kingdom Portugal Moldova Belgium Estonia Cyprus Spain Liechtenstein Kazakhstan Bulgaria Belarus Slovakia Ireland Russia Lithuania Slovenia Romania Czech Republic Bosnia & Herzegovina Latvia Croatia Albania Macedonia Serbia & Montenegro Luxembourg
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
30
Property Plant and Equipment - Net Countries
Value (total assets = 100)
Rank
Percentile
45.92 45.73 45.60 44.62 35.48 35.35 31.26 31.12 29.84 28.00 26.77 25.19 24.97 23.49 20.94 20.85 20.39 19.89 19.79 19.65 18.69 18.26 18.20 17.67 17.31 16.50 15.70 14.61 14.04 14.01 13.97 13.93 13.86 13.50 12.75 12.59 11.74 11.10 9.73 8.92 7.79 7.49 7.39 6.99 6.34
1 2 3 4 6 7 8 9 10 12 13 17 18 20 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 43 44 45 46 47 48 49 50 51 52 53
98.11 96.23 94.34 92.45 88.68 86.79 84.91 83.02 81.13 77.36 75.47 67.92 66.04 62.26 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Pakistan Turkey Mexico Czech Republic Argentina Peru Indonesia Thailand Philippines Malaysia Taiwan Luxembourg Switzerland Greece Singapore Italy India New Zealand the United Kingdom Hong Kong Japan Hungary Brazil Australia Chile China Norway USA Poland South Africa South Korea Spain Canada Finland Germany Russia Netherlands Belgium Denmark France Ireland Austria Sweden Israel Portugal
the Middle East the Middle East Latin America Europe Latin America Latin America Asia Asia Asia Asia Asia Europe Europe Europe Asia Europe Asia Oceana Europe Asia Asia Europe Latin America Oceana Latin America Asia Europe North America Europe Africa Asia Europe North America Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe the Middle East Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
31
Property Plant and Equipment - Net (Computer Programming Services) Countries in Europe
Value (total assets = 100)
Rank
Percentile
44.62 43.45 42.35 42.33 39.87 38.75 37.38 30.86 25.19 24.97 23.49 23.30 21.77 21.48 21.02 20.85 20.59 20.30 19.79 18.84 18.26 16.42 15.70 15.61 15.37 14.75 14.04 13.93 13.50 13.47 13.08 12.86 12.83 12.75 12.62 12.59 12.56 12.15 12.13 11.74 11.10 9.73 8.92 7.79 7.49 7.42 7.39 7.24 7.24 6.34 6.07
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Czech Republic Romania Latvia Croatia Bosnia & Herzegovina Macedonia Serbia & Montenegro Albania Luxembourg Switzerland Greece Liechtenstein Malta Isle of Man Vatican City Italy Andorra Monaco the United Kingdom Faroe Islands Hungary Ukraine Norway Gibraltar Georgia Iceland Poland Spain Finland Estonia Slovenia Belarus Slovakia Germany Moldova Russia Lithuania Kazakhstan Bulgaria Netherlands Belgium Denmark France Ireland Austria San Marino Sweden Guernsey Jersey Portugal Cyprus
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
32
Accumulated Depreciation - Total Countries
Value (total assets = 100)
Rank
Percentile
58.56 36.04 36.01 35.94 34.84 31.96 24.64 21.21 19.88 18.74 18.07 17.83 17.28 17.05 16.96 16.95 16.09 14.89 14.50 13.83 13.43 12.56 12.17 12.08 11.86 11.79 11.77 11.14 10.45 10.00 9.95 9.41 9.31 9.18 7.73 6.94 6.39 5.66 3.84 3.82
1 2 3 4 5 8 10 11 13 14 15 16 17 18 19 20 21 24 26 27 28 29 30 31 32 33 34 35 36 37 38 40 41 42 43 44 45 46 47 48
97.92 95.83 93.75 91.67 89.58 83.33 79.17 77.08 72.92 70.83 68.75 66.67 64.58 62.50 60.42 58.33 56.25 50.00 45.83 43.75 41.67 39.58 37.50 35.42 33.33 31.25 29.17 27.08 25.00 22.92 20.83 16.67 14.58 12.50 10.42 8.33 6.25 4.17 2.08 0.00
Region
_________________________________________________________________________________________________________
Pakistan Turkey Indonesia Mexico Switzerland Czech Republic Philippines Peru Malaysia Thailand Greece Brazil the United Kingdom Japan Chile Netherlands USA India Spain Australia Singapore France Belgium Finland Denmark Canada Germany Italy South Korea Norway Hong Kong Russia Sweden New Zealand Poland South Africa Portugal China Ireland Israel
the Middle East the Middle East Asia Latin America Europe Europe Asia Latin America Asia Asia Europe Latin America Europe Asia Latin America Europe North America Asia Europe Oceana Asia Europe Europe Europe Europe North America Europe Europe Asia Europe Asia Europe Europe Oceana Europe Africa Europe Asia Europe the Middle East
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
33
Accumulated Depreciation - Total (Computer Programming Services) Countries in Europe
Value (total assets = 100)
Rank
Percentile
34.84 34.25 32.51 31.96 31.43 30.54 30.34 30.32 29.46 18.51 18.07 17.28 16.95 16.74 16.52 16.25 14.50 13.61 13.02 12.56 12.17 12.08 11.86 11.77 11.23 11.14 10.07 10.00 9.61 9.59 9.54 9.51 9.41 9.39 9.31 7.73 6.95 6.69 6.68 6.39 6.12 3.84
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42
97.62 95.24 92.86 90.48 88.10 85.71 83.33 80.95 78.57 76.19 73.81 71.43 69.05 66.67 64.29 61.90 59.52 57.14 54.76 52.38 50.00 47.62 45.24 42.86 40.48 38.10 35.71 33.33 30.95 28.57 26.19 23.81 21.43 19.05 16.67 14.29 11.90 9.52 7.14 4.76 2.38 0.00
_________________________________________________________________________________________________________
Switzerland Romania Liechtenstein Czech Republic Bosnia & Herzegovina Macedonia Latvia Croatia Serbia & Montenegro Albania Greece the United Kingdom Netherlands Malta Isle of Man Iceland Spain Slovenia Monaco France Belgium Finland Denmark Germany Vatican City Italy Estonia Norway Belarus Slovakia Faroe Islands Andorra Russia Lithuania Sweden Poland Moldova Kazakhstan Bulgaria Portugal Cyprus Ireland
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
34
Intangible Other Assets Countries
Value (total assets = 100)
Rank
Percentile
30.98 25.20 24.49 23.73 21.29 20.92 20.61 20.13 19.88 18.85 18.53 18.50 18.37 18.14 17.80 17.66 14.59 13.40 13.09 11.10 9.62 9.19 9.12 8.45 8.24 7.32 6.47 5.91 5.83 5.19 5.08 4.35 3.76 3.25 3.05 1.48 0.62 0.03 0.03
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 18 19 20 21 22 23 24 25 26 27 28 30 31 32 33 34 35 36 37 38 39 42 43
97.73 95.45 93.18 90.91 88.64 86.36 84.09 81.82 79.55 77.27 75.00 72.73 70.45 68.18 65.91 63.64 59.09 56.82 54.55 52.27 50.00 47.73 45.45 43.18 40.91 38.64 36.36 31.82 29.55 27.27 25.00 22.73 20.45 18.18 15.91 13.64 11.36 4.55 2.27
Region
_________________________________________________________________________________________________________
Luxembourg Belgium Ireland Australia Canada Israel Spain Sweden USA Philippines France the United Kingdom Germany Argentina Austria Finland Norway Netherlands Denmark Italy Switzerland India Portugal Hungary South Africa Poland South Korea Malaysia Russia China Hong Kong Singapore Japan Greece New Zealand Czech Republic Thailand Turkey Mexico
Europe Europe Europe Oceana North America the Middle East Europe Europe North America Asia Europe Europe Europe Latin America Europe Europe Europe Europe Europe Europe Europe Asia Europe Europe Africa Europe Asia Asia Europe Asia Asia Asia Asia Europe Oceana Europe Asia the Middle East Latin America
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
35
Intangible Other Assets (Computer Programming Services) Countries in Europe
Value (total assets = 100)
Rank
Percentile
30.98 25.20 24.49 20.61 20.13 20.09 19.35 18.53 18.50 18.37 17.80 17.66 17.63 17.19 17.19 14.59 13.40 13.09 11.19 11.10 9.62 9.12 8.98 8.73 8.45 7.60 7.32 7.22 7.11 6.58 6.34 6.32 6.24 5.96 5.94 5.83 5.82 4.87 4.22 3.25 3.16 3.01 2.97 1.48 1.40 1.40 0.03 0.02 0.02 0.02
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50
98.00 96.00 94.00 92.00 90.00 88.00 86.00 84.00 82.00 80.00 78.00 76.00 74.00 72.00 70.00 68.00 66.00 64.00 62.00 60.00 58.00 56.00 54.00 52.00 50.00 48.00 46.00 44.00 42.00 40.00 38.00 36.00 34.00 32.00 30.00 28.00 26.00 24.00 22.00 20.00 18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00
_________________________________________________________________________________________________________
Luxembourg Belgium Ireland Spain Sweden Iceland Slovenia France the United Kingdom Germany Austria Finland San Marino Jersey Guernsey Norway Netherlands Denmark Vatican City Italy Switzerland Portugal Liechtenstein Cyprus Hungary Ukraine Poland Gibraltar Georgia Moldova Kazakhstan Bulgaria Estonia Belarus Slovakia Russia Lithuania Faroe Islands Monaco Greece Andorra Malta Isle of Man Czech Republic Latvia Croatia Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.3 3.3.1
36
FINANCIAL RETURNS IN CZECH REPUBLIC: LIABILITY STRUCTURE RATIOS Overview
In this chapter we consider the liability structure of firms operating in Czech Republic benchmarked against global averages. The chapter begins by defining relevant terms. A common-size statement, or vertical analysis of liabilities and shareholder equity is then presented for the proto-typical firm operating in Czech Republic and the average global benchmarks (sometimes referred to as a financial “gap” analysis). The figure reflect firms involved in computer programming services in Czech Republic. For ratios where there are large deviations between Czech Republic and the benchmarks, graphics are provided (total liabilities and equity = 100 percent). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key vertical analysis liability ratios are highlighted.
3.3.2
Liabilities and Equity – Definitions of Terms
The following definitions are provided for those less familiar with the liability-side of financial statement analysis. As this chapter deals with the vertical analysis and global benchmarking of liabilities and equity, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •
Common Equity. Common equity is defined to equal the company's net worth. It typically comprises capital stock, capital surplus, retained earnings, and, in some cases, net worth reserves. Common equity is the portion of total net worth belonging to the common stockholders. Synonyms which are often used for common equity are “common stock” and “net worth”.
•
Common Stock. Common stock is defined as the securities which represent the company's ownership interest. Common stockholders typically assume greater risk than preferred stockholders; although common stockholders maintain greater control and generally greater dividends and capital appreciation. Common stock can be used interchangeably with the term capital stock when the company has no preferred stock.
•
Current Liabilities - Total. Total current liabilities are defined as the total amount of obligations which would require the use of current assets or other current liabilities to pay.
•
Current Portion of Long Term Debt. The current proportion of long term debt is typically defined as debt which is payable in more than one year.
•
Deferred Income. Deferred income is commonly defined as the amount for services rendered that has not yet been received.
•
Retained Earnings. proprietary funds.
•
Shareholders Equity. Shareholders equity is commonly defined to be the amount of total equity reserved for common and preferred shareholders.
•
Short Term Debt. Short term debt is generally defined as debt payable within one year.
www.icongrouponline.com
Retained earnings is an equity account reflecting the accumulated earnings of
©2007 Icon Group International, Inc.
Financial Indicators •
37
Total Liabilities. Total liabilities are generally defined to include all the claims against a corporation. Liabilities include accounts and wages and salaries payable, dividends declared payable, accrued taxes payable, fixed or long-term liabilities such as mortgage bonds, debentures, and bank loans.
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©2007 Icon Group International, Inc.
Financial Indicators
3.3.3
38
Liability Structure: Outlook
Using the methodology described in the introduction, the following table summarizes liability and equity structure benchmarks for firms involved in computer programming services in Czech Republic. To allow comparable benchmarking, a common index of Total Liabilities & Shareholders Equity = 100 is used. All figures are current-year projections for companies operating in Czech Republic based on latest financial results available. Liability Structure Czech Republic Europe World Avg. _________________________________________________________________________________________________________
Short Term Debt & Current Portion of Long Term Debt Other Current Liabilities Current Liabilities - Total Provision For Risks and Charges Deferred Income Other Liabilities Total Liabilities Common Equity Common Stock Other Appropriated Reserves Unappropriated Reserves Retained Earnings Treasury Stock Total Liabilities & Shareholders Equity
0.98 32.11 24.77 7.65 2.80 0.23 30.23 69.77 15.68 15.82 32.93 14.62 0.37 100.00
8.31 18.22 35.50 2.12 0.95 2.12 46.42 47.67 11.70 8.82 5.84 9.80 0.76 100.00
8.65 9.50 26.76 0.97 0.21 1.60 34.81 56.89 20.59 3.58 11.10 10.82 1.00 100.00
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.3.4
39
Large Variances: Liabilities
The following graphics summarize for computer programming services the large liability structure gaps between firms operating in Czech Republic and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.
Gap: Short Term Debt & Current Portion of Long Term Debt 8.31
10 5
8.65
0.98
0 -5 -7.67
-10 Czech Republic
Europe
World Average
Gap
Gap: Other Current Liabilities 40
32.11
30
22.61
18.22
20
9.5
10 0 Czech Republic
Europe
World Average
Gap
Gap: Current Liabilities - Total 35.5
40 30
26.76
24.77
20 10 0
-1.99
-10 Czech Republic
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Europe
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
40
Gap: Provision For Risks and Charges 8
7.65
6.68
6 4 2.12 2
0.97
0 Czech Republic
Europe
World Average
Gap
Gap: Deferred Income 2.8
3
2.59
2.5 2 1.5
0.95
1
0.21
0.5 0 Czech Republic
Europe
World Average
Gap
Gap: Total Liabilities 46.42
50 40 30
34.81
30.23
20 10 0
-4.58
-10 Czech Republic
Europe
World Average
Gap
Gap: Common Equity 80
69.77
60
47.67
56.89
40 12.88
20 0 Czech Republic
www.icongrouponline.com
Europe
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
41
Gap: Common Stock 25 20
20.59 15.68
15
11.7
10 5 0 -5 Czech Republic
Europe
-4.91 Gap
World Average
Gap: Other Appropriated Reserves 20
15.82
15
12.24 8.82
10
3.58
5 0 Czech Republic
Europe
World Average
Gap
Gap: Unappropriated Reserves 40
32.93
30
21.83
20
11.1 5.84
10 0 Czech Republic
Europe
World Average
Gap
Gap: Retained Earnings 15
14.62 9.8
10
10.82
3.8
5 0 Czech Republic
www.icongrouponline.com
Europe
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
3.3.5
42
Key Percentiles and Rankings
We now consider the distribution of liability ratios for computer programming services using ranks and percentiles. What percent of countries have a value lower or higher than Czech Republic (what is the ratio's rank or percentile)? The table below answers this question with respect to the vertical analysis of liability structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key vertical liability ratios are highlighted in additional tables. Liability Structure
Czech Republic
Rank of Total
Percentile
0.98 32.11 24.77 7.65 2.80 0.23 30.23 69.77 15.68 15.82 32.93 14.62 0.37 100.00
50 of 52 4 of 52 43 of 52 1 of 33 3 of 21 45 of 48 47 of 53 4 of 53 25 of 50 5 of 50 2 of 33 17 of 51 15 of 22
3.85 92.31 17.31 96.97 85.71 6.25 11.32 92.45 50.00 90.00 93.94 66.67 31.82
_________________________________________________________________________________________________________
Short Term Debt & Current Portion of Long Term Debt Other Current Liabilities Current Liabilities - Total Provision For Risks and Charges Deferred Income Other Liabilities Total Liabilities Common Equity Common Stock Other Appropriated Reserves Unappropriated Reserves Retained Earnings Treasury Stock Total Liabilities & Shareholders Equity
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
43
Current Liabilities - Total Countries
Value (total liabilities & equity = 100)
Rank
Percentile
57.84 52.26 49.72 48.30 47.94 47.58 47.44 47.30 47.00 44.19 41.60 40.74 40.51 40.28 39.42 38.42 37.57 36.72 36.62 35.86 34.55 34.10 33.72 33.70 33.37 33.04 31.91 31.27 31.26 30.01 29.94 29.63 29.09 29.00 27.98 27.05 27.01 24.77 24.70 24.34 20.78 18.33 18.28 6.28
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 19 20 21 22 24 26 27 28 29 30 31 32 34 35 36 37 38 39 41 42 43 44 46 47 48 49 52
98.08 96.15 94.23 92.31 90.38 88.46 86.54 84.62 82.69 80.77 78.85 76.92 75.00 73.08 71.15 69.23 67.31 63.46 61.54 59.62 57.69 53.85 50.00 48.08 46.15 44.23 42.31 40.38 38.46 34.62 32.69 30.77 28.85 26.92 25.00 21.15 19.23 17.31 15.38 11.54 9.62 7.69 5.77 0.00
Region
_________________________________________________________________________________________________________
Austria Brazil Chile South Africa France Greece Spain Taiwan Portugal Thailand Norway Peru Netherlands the United Kingdom Belgium Hungary Argentina Turkey Mexico Sweden Switzerland Poland Denmark Singapore Italy Japan Luxembourg Hong Kong Australia South Korea Finland Ireland Philippines China Germany Russia USA Czech Republic Canada Malaysia India Israel Indonesia New Zealand
Europe Latin America Latin America Africa Europe Europe Europe Asia Europe Asia Europe Latin America Europe Europe Europe Europe Latin America the Middle East Latin America Europe Europe Europe Europe Asia Europe Asia Europe Asia Oceana Asia Europe Europe Asia Asia Europe Europe North America Europe North America Asia Asia the Middle East Asia Oceana
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
44
Current Liabilities - Total (Computer Programming Services) Countries in Europe
Value (total liabilities & equity = 100)
Rank
Percentile
57.84 57.29 55.86 55.86 47.94 47.58 47.44 47.00 44.99 44.54 44.10 43.52 41.60 40.51 40.28 39.42 38.42 35.86 35.56 34.88 34.55 34.55 34.10 33.72 33.64 33.37 32.85 32.68 32.35 32.24 32.01 31.91 31.11 30.66 30.01 29.98 29.94 29.63 29.50 29.45 28.93 27.98 27.62 27.55 27.29 27.05 26.98 24.77 23.52 23.51 6.50
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Austria San Marino Jersey Guernsey France Greece Spain Portugal Cyprus Slovenia Malta Isle of Man Norway Netherlands the United Kingdom Belgium Hungary Sweden Albania Romania Ukraine Switzerland Poland Denmark Vatican City Italy Gibraltar Monaco Georgia Liechtenstein Bosnia & Herzegovina Luxembourg Macedonia Moldova Serbia & Montenegro Faroe Islands Finland Ireland Kazakhstan Bulgaria Estonia Germany Belarus Slovakia Iceland Russia Lithuania Czech Republic Latvia Croatia Andorra
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
45
Total Liabilities Countries
Value (total liabilities & equity = 100)
Rank
Percentile
72.50 68.91 66.89 66.88 64.50 63.63 61.75 60.52 60.36 56.68 54.77 52.25 51.97 51.96 51.61 51.48 51.34 50.71 50.57 49.27 48.76 47.65 47.29 47.06 46.11 45.47 44.68 44.41 41.24 39.10 38.64 38.44 38.11 37.41 37.03 34.52 34.13 33.37 30.54 30.43 30.23 30.05 22.30 21.58 17.22
1 2 3 4 5 6 7 8 9 10 12 13 14 15 16 17 18 20 21 22 23 24 25 26 27 28 29 30 32 34 35 37 38 39 40 41 42 44 45 46 47 48 50 52 53
98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 77.36 75.47 73.58 71.70 69.81 67.92 66.04 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 39.62 35.85 33.96 30.19 28.30 26.42 24.53 22.64 20.75 16.98 15.09 13.21 11.32 9.43 5.66 1.89 0.00
Region
_________________________________________________________________________________________________________
Portugal Peru Spain Brazil Austria Chile France Turkey Mexico South Africa Pakistan Taiwan Belgium the United Kingdom Argentina Italy Poland Thailand Netherlands Greece Luxembourg Denmark Norway Ireland Switzerland Philippines Sweden Japan Australia Hungary Germany USA Finland Singapore South Korea Hong Kong Canada Russia China Indonesia Czech Republic Malaysia Israel India New Zealand
Europe Latin America Europe Latin America Europe Latin America Europe the Middle East Latin America Africa the Middle East Asia Europe Europe Latin America Europe Europe Asia Europe Europe Europe Europe Europe Europe Europe Asia Europe Asia Oceana Europe Europe North America Europe Asia Asia Asia North America Europe Asia Asia Europe Asia the Middle East Asia Oceana
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
46
Total Liabilities (Computer Programming Services) Countries in Europe
Value (total liabilities & equity = 100)
Rank
Percentile
72.50 69.40 66.89 64.50 63.89 62.79 62.29 62.29 61.75 60.15 57.50 52.77 51.97 51.96 51.89 51.48 51.34 51.29 50.57 49.47 49.27 48.76 47.65 47.29 47.06 46.16 46.11 45.67 45.07 44.68 44.42 44.34 43.03 39.10 38.83 38.64 38.11 36.27 35.70 35.16 34.07 33.99 33.43 33.37 33.29 33.11 32.91 30.23 28.70 28.69 17.83
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Portugal Cyprus Spain Austria San Marino Slovenia Guernsey Jersey France Albania Romania Bosnia & Herzegovina Belgium the United Kingdom Vatican City Italy Poland Macedonia Netherlands Serbia & Montenegro Greece Luxembourg Denmark Norway Ireland Moldova Switzerland Malta Isle of Man Sweden Kazakhstan Bulgaria Liechtenstein Hungary Iceland Germany Finland Monaco Estonia Ukraine Belarus Slovakia Gibraltar Russia Lithuania Faroe Islands Georgia Czech Republic Latvia Croatia Andorra
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
47
Common Equity Countries
Value (total liabilities & equity = 100)
Rank
Percentile
83.03 77.88 73.83 69.77 69.50 69.41 65.87 64.55 64.05 60.95 60.81 60.73 60.67 59.69 59.57 57.92 55.20 54.99 54.72 54.46 52.84 51.95 51.95 51.04 51.00 48.65 47.84 47.83 47.68 46.41 46.22 45.26 45.23 45.08 40.74 39.48 39.37 37.40 36.63 35.50 33.01 31.72 31.40 31.09 26.19
1 2 3 4 5 6 7 9 10 11 12 13 14 15 16 17 19 20 21 22 23 24 25 26 27 29 30 31 32 33 35 36 37 38 39 41 42 43 45 47 48 49 50 51 52
98.11 96.23 94.34 92.45 90.57 88.68 86.79 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 45.28 43.40 41.51 39.62 37.74 33.96 32.08 30.19 28.30 26.42 22.64 20.75 18.87 15.09 11.32 9.43 7.55 5.66 3.77 1.89
Region
_________________________________________________________________________________________________________
New Zealand India Israel Czech Republic Indonesia Malaysia Canada Hong Kong China USA Germany South Korea Singapore Hungary Finland Australia Sweden Japan Russia Philippines Ireland Denmark Norway Switzerland Luxembourg Netherlands the United Kingdom Thailand Belgium Greece Taiwan Italy Pakistan Poland South Africa Turkey Mexico France Argentina Austria Brazil Spain Chile Peru Portugal
Oceana Asia the Middle East Europe Asia Asia North America Asia Asia North America Europe Asia Asia Europe Europe Oceana Europe Asia Europe Asia Europe Europe Europe Europe Europe Europe Europe Asia Europe Europe Asia Europe the Middle East Europe Africa the Middle East Latin America Europe Latin America Europe Latin America Europe Latin America Latin America Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
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Financial Indicators
48
Common Equity (Computer Programming Services) Countries in Europe
Value (total liabilities & equity = 100)
Rank
Percentile
85.98 69.77 66.22 66.19 61.90 61.58 60.81 59.69 59.57 58.83 58.54 55.87 55.75 55.20 54.72 54.59 53.68 52.84 51.95 51.95 51.04 51.04 51.00 50.25 48.65 47.84 47.68 47.63 46.41 45.63 45.26 45.08 43.01 42.45 40.53 39.00 38.93 37.51 37.40 35.50 35.16 34.42 34.28 34.28 33.45 32.27 31.72 29.78 27.14 26.19 25.07
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Andorra Czech Republic Latvia Croatia Faroe Islands Iceland Germany Hungary Finland Monaco Estonia Belarus Slovakia Sweden Russia Lithuania Ukraine Ireland Denmark Norway Switzerland Gibraltar Luxembourg Georgia Netherlands the United Kingdom Belgium Liechtenstein Greece Vatican City Italy Poland Malta Isle of Man Moldova Kazakhstan Bulgaria Romania France Austria San Marino Bosnia & Herzegovina Jersey Guernsey Macedonia Serbia & Montenegro Spain Slovenia Albania Portugal Cyprus
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
49
Retained Earnings Countries
Value (total liabilities & equity = 100)
Rank
Percentile
29.85 28.00 27.50 22.90 22.66 22.48 20.43 19.99 19.71 18.98 18.96 18.33 17.75 17.55 15.35 15.17 14.62 14.40 13.44 13.04 12.17 11.24 11.17 9.39 9.36 8.61 8.48 8.26 8.20 7.76 7.32 6.61 6.05 5.62 5.61 5.23 4.84 4.04 2.66 1.95 1.54 0.27 0.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 22 23 24 25 27 29 30 31 32 34 35 36 38 39 40 41 42 45 46 47 48 49 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 56.86 54.90 52.94 50.98 47.06 43.14 41.18 39.22 37.25 33.33 31.37 29.41 25.49 23.53 21.57 19.61 17.65 11.76 9.80 7.84 5.88 3.92 0.00
Region
_________________________________________________________________________________________________________
Israel Norway Hong Kong USA Japan India Canada South Africa the United Kingdom Denmark Switzerland Singapore Finland New Zealand Malaysia Ireland Czech Republic Netherlands Australia Indonesia Germany Spain Belgium Turkey Mexico South Korea Austria Sweden Taiwan Russia Philippines Luxembourg France Argentina Poland Thailand Italy Portugal China Hungary Greece Peru Pakistan
the Middle East Europe Asia North America Asia Asia North America Africa Europe Europe Europe Asia Europe Oceana Asia Europe Europe Europe Oceana Asia Europe Europe Europe the Middle East Latin America Asia Europe Europe Asia Europe Asia Europe Europe Latin America Europe Asia Europe Europe Asia Europe Europe Latin America the Middle East
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
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Financial Indicators
50
Retained Earnings (Computer Programming Services) Countries in Europe
Value (total liabilities & equity = 100)
Rank
Percentile
28.00 26.37 23.13 19.71 18.98 18.96 18.18 17.78 17.75 17.69 15.17 14.62 14.40 13.88 13.87 12.17 11.24 11.17 10.55 8.92 8.48 8.40 8.30 8.26 8.19 8.19 8.18 7.95 7.92 7.90 7.76 7.74 7.67 6.61 6.05 5.61 5.05 4.88 4.86 4.85 4.84 4.04 3.87 1.95 1.75 1.67 1.64 1.54 1.42 1.41 0.24
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Norway Faroe Islands Iceland the United Kingdom Denmark Switzerland Andorra Monaco Finland Liechtenstein Ireland Czech Republic Netherlands Latvia Croatia Germany Spain Belgium Slovenia Romania Austria San Marino Estonia Sweden Guernsey Jersey Bosnia & Herzegovina Macedonia Belarus Slovakia Russia Lithuania Serbia & Montenegro Luxembourg France Poland Moldova Vatican City Kazakhstan Bulgaria Italy Portugal Cyprus Hungary Ukraine Gibraltar Georgia Greece Malta Isle of Man Albania
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.4 3.4.1
51
FINANCIAL RETURNS IN CZECH REPUBLIC: INCOME STRUCTURE RATIOS Overview
In this chapter we consider the income structure of companies operating in Czech Republic benchmarked against global averages. The chapter begins by defining relevant terms. A common-size statement, or vertical analysis of income is then presented for the proto-typical firm involved in computer programming services operating in Czech Republic and the average global benchmarks (total revenue = 100 percent). For ratios where there are large deviations between Czech Republic and the benchmarks, graphics are provided. Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key vertical analysis income ratios are highlighted across countries in the comparison group.
3.4.2
Income Statements – Definitions of Terms
The following definitions are provided for those less familiar with the income-side of financial statement analysis. As this chapter deals with the vertical analysis and global benchmarking of income, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •
Amortization. Amortization generally refers to the depreciation, depletion, or charge-off to expense of intangible and tangible assets over a period of time. Amortization is commonly understood to be the taking as an expense (writing off) of the loss of value of an intangible asset such as a copyright, a patent, or a mailing list, in an accounting period.
•
Cost of Goods Sold (excluding depreciation). For retail companies, cost of goods sold is generally defined as the equivalent of starting inventory plus purchases minus ending inventory. In manufacturing, cost of goods sold is defined to equal the starting inventory plus the cost of goods manufactured minus ending inventory. Most pure service firms do not generally have cost of goods sold.
•
Current Domestic Income Tax. Current domestic income taxes are commonly defined as compulsory charges levied by the government where the company is located on current income.
•
Deferred Domestic Income Tax. Deferred domestic income tax is defined as a compulsory charge from a previous accounting period which is yet unpaid to the government where the company is located on current income.
•
Depletion. Depletion is commonly defined to be included as one of the elements of amortization, and is understood to be the portion of the carrying value (other than the portion associated with tangible assets) prorated in each accounting period for financial reporting purposes.
•
Depreciation. Depreciation generally is defined as the expiration in the service life of fixed assets, other than depletable assets, attributable to wear and tear, deterioration, action of the physical elements, inadequacy and obsolescence. Depreciation is commonly defined as the portion of the cost of a fixed asset charged as an expense during a particular period. In accounting for depreciation, the cost of a fixed asset, less any salvage value, is prorated over the estimated service life of such an asset, and each period is
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Financial Indicators
52
charged with a portion of such cost. Through this process, the cost of the asset is ultimately charged off as an expense. •
Earnings Before Interest and Taxes (EBIT). EBIT is a financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and non-operating profit before the deduction of interest and income taxes.
•
Gross Income. Gross income is commonly defined as all the money, goods, and property received by the company that must be included as taxable income.
•
Income Taxes. Income taxes are defined to include those taxes levied by state, federal, and local governments on the company's reported accounting profit. Income taxes generally include both deferred and paid taxes. They are generally determined after the interest expense has been deducted.
•
Interest Expense on Debt. Interest expenses on debt are those which are spent on current debt and added to the net income so avoid underestimating interest coverage.
•
Net Income Available to Common. Net income available to common is defined as the net income available to common stockholders.
•
Net Income Before Preferred Dividends. Net income before preferred dividends is generally calculated as the difference between total revenues and total expense prior to the granting of preferred dividends.
•
Net Sales or Revenues. Revenues or net sales are defined as payments made to and received by an entity. May take the form of taxes, user fees, fines, fees for service, and so on.
•
Non-Operating Interest Income. Non-operating interest income is generally understood to be any interest received (e.g., royalty, production payment, net profits interest) that does not involve the operation of the company.
•
Operating Expenses. Operating expenses are generally defined as those incurred in paying for the company’s day-to-day activities.
•
Operating Income. Operating income is generally defined to equal operating revenues less operating expenses. It typically excludes items of other revenue and expense such as equity in earnings of unconsolidated companies, dividends, interest income and expense, income taxes, extraordinary items, and cumulative effect of accounting changes.
•
Pretax Income. Pretax income is generally defined as income before tax deductions.
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Financial Indicators
3.4.3
53
Income Structure: Outlook
Using the methodology described in the introduction, the following table summarizes income structure benchmarks for firms involved in computer programming services in Czech Republic. To allow comparable benchmarking, a common index of Net Sales or Revenues = 100 is used. All figures are current-year projections for companies operating in Czech Republic based on latest financial results available. Income Structure Czech Republic Europe World Avg. _________________________________________________________________________________________________________
Net Sales or Revenues Cost of Goods Sold (Excluding Depreciation) Depreciation, Depletion & Amortization Gross Income Other Operating Expenses Operating Expenses - Total Operating Income Extraordinary Credit - Pretax Extraordinary Charge - Pretax Non-Operating Interest Income Other Income/Expense Net Earnings Before Interest and Taxes (EBIT) Interest Expense on Debt Pretax Income Income Taxes Current Domestic Income Tax Deferred Domestic Income Tax Income Tax Credits Net Income Before Extra Items/Prefer Dividends Net Income Before Preferred Dividends Net Income Available to Common
100.00 84.36 6.88 8.75 74.57 -7.51 11.33 0.48 13.86 4.57 10.49 17.41 0.98 16.43 7.61 14.52 0.76 0.27 8.82 8.82 8.82
100.00 58.13 7.67 29.02 82.09 3.72 9.85 1.11 2.22 1.80 1.90 14.04 3.62 10.53 3.67 4.44 -0.10 0.03 6.58 6.60 6.58
100.00 55.68 7.59 29.38 78.97 2.66 12.16 0.17 0.47 1.79 1.49 16.24 3.42 12.89 2.91 1.90 0.00 0.00 9.64 9.53 9.63
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.4.4
54
Large Variances: Income
The following graphics summarize for computer programming services the large income structure gaps between firms operating in Czech Republic and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.
Gap: Cost of Goods Sold (Excluding Depreciation) 100
84.36
80
58.13
60
55.68
40
28.68
20 0 Czech Republic
Europe
World Average
Gap
Gap: Gross Income 29.02
30 20 10
29.38
8.75
0 -10 -20
-20.63
-30 Czech Republic
Europe
World Average
Gap
Gap: Other Operating Expenses 100 80
74.57
82.09
78.97
60 40 20 0
-4.4
-20 Czech Republic
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Europe
World Average
Gap
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Financial Indicators
55
Gap: Operating Expenses - Total 8
7.51
6
4.85 3.72
4
2.66
2 0 Czech Republic
Europe
World Average
Gap
Gap: Extraordinary Charge - Pretax 15
13.86
13.39
10 5
2.22
0.47
0 Czech Republic
Europe
World Average
Gap
Gap: Non-Operating Interest Income 5
4.57
4 2.78
3 1.8
2
1.79
1 0 Czech Republic
Europe
World Average
Gap
Gap: Other Income/Expense Net 12
10.49 9
10 8 6 4
1.9
2
1.49
0 Czech Republic
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Europe
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
56
Gap: Interest Expense on Debt 3.62
4 2
3.42
0.98
0 -2
-2.44
-4 Czech Republic
Europe
World Average
Gap
Gap: Pretax Income 20
16.43 12.89
15 10.53 10
3.54
5 0 Czech Republic
Europe
World Average
Gap
Gap: Income Taxes 8
7.61
6
4.7 3.67
4
2.91
2 0 Czech Republic
Europe
World Average
Gap
Gap: Current Domestic Income Tax 15
14.52 12.62
10 4.44
5
1.9
0 Czech Republic
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Europe
World Average
Gap
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Financial Indicators
3.4.5
57
Key Percentiles and Rankings
We now consider the distribution of income ratios for computer programming services using ranks and percentiles. What percent of countries have a value lower or higher than Czech Republic (what is the ratio's rank or percentile)? The table below answers this question with respect to the vertical analysis of income structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key vertical income ratios are highlighted in additional tables. Income Structure
Czech Republic
Rank of Total
Percentile
100.00 84.36 6.88 8.75 74.57 -7.51 11.33 0.48 13.86 4.57 10.49 17.41 0.98 16.43 7.61 14.52 0.76 0.27 8.82 8.82 8.82
4 of 48 20 of 53 49 of 51 41 of 50 43 of 43 18 of 53 12 of 29 1 of 32 7 of 48 1 of 53 15 of 53 41 of 53 11 of 53 6 of 53 1 of 41 5 of 37 2 of 7 18 of 53 18 of 53 18 of 53
91.67 62.26 3.92 18.00 0.00 66.04 58.62 96.88 85.42 98.11 71.70 22.64 79.25 88.68 97.56 86.49 71.43 66.04 66.04 66.04
_________________________________________________________________________________________________________
Net Sales or Revenues Cost of Goods Sold (Excluding Depreciation) Depreciation, Depletion & Amortization Gross Income Other Operating Expenses Operating Expenses - Total Operating Income Extraordinary Credit - Pretax Extraordinary Charge - Pretax Non-Operating Interest Income Other Income/Expense Net Earnings Before Interest and Taxes (EBIT) Interest Expense on Debt Pretax Income Income Taxes Current Domestic Income Tax Deferred Domestic Income Tax Income Tax Credits Net Income Before Extra Items/Prefer Dividends Net Income Before Preferred Dividends Net Income Available to Common
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Financial Indicators
58
Cost of Goods Sold (Excluding Depreciation) Countries
Value (total revenue = 100)
Rank
Percentile
89.70 87.06 84.48 84.36 83.71 76.96 75.28 72.71 71.43 71.26 71.23 70.16 69.96 69.18 68.01 65.99 65.44 64.52 63.17 62.65 62.51 62.12 61.28 58.79 58.74 58.44 57.73 57.24 55.56 54.04 52.06 51.51 51.02 50.82 50.36 49.81 46.30 44.50 32.98 19.75 3.27
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 23 24 25 26 27 28 29 30 31 33 34 35 36 37 38 40 41 44 47 48
97.92 95.83 93.75 91.67 89.58 87.50 85.42 83.33 81.25 79.17 77.08 75.00 72.92 70.83 68.75 66.67 64.58 62.50 60.42 58.33 56.25 52.08 50.00 47.92 45.83 43.75 41.67 39.58 37.50 35.42 31.25 29.17 27.08 25.00 22.92 20.83 16.67 14.58 8.33 2.08 0.00
Region
_________________________________________________________________________________________________________
Luxembourg Hungary Belgium Czech Republic Sweden France South Africa Brazil Spain Peru India Norway Netherlands Chile South Korea China Japan Malaysia Switzerland Poland Finland Ireland Russia Denmark Singapore the United Kingdom Philippines Germany Argentina Portugal Thailand Australia New Zealand Hong Kong Canada Italy USA Greece Indonesia Israel Pakistan
Europe Europe Europe Europe Europe Europe Africa Latin America Europe Latin America Asia Europe Europe Latin America Asia Asia Asia Asia Europe Europe Europe Europe Europe Europe Asia Europe Asia Europe Latin America Europe Asia Oceana Oceana Asia North America Europe North America Europe Asia the Middle East the Middle East
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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©2007 Icon Group International, Inc.
Financial Indicators
59
Cost of Goods Sold (Excluding Depreciation) (Computer Programming Services) Countries in Europe
Value (total revenue = 100)
Rank
Percentile
89.70 87.06 84.48 84.36 83.71 80.08 80.04 78.29 76.96 74.44 73.29 71.43 70.16 69.96 67.06 65.56 63.17 62.65 62.57 62.51 62.43 62.21 62.12 61.28 61.14 58.95 58.79 58.44 57.24 56.96 56.33 54.20 54.11 54.04 52.83 51.73 50.21 49.81 48.73 46.77 44.50 41.24 40.70
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43
97.67 95.35 93.02 90.70 88.37 86.05 83.72 81.40 79.07 76.74 74.42 72.09 69.77 67.44 65.12 62.79 60.47 58.14 55.81 53.49 51.16 48.84 46.51 44.19 41.86 39.53 37.21 34.88 32.56 30.23 27.91 25.58 23.26 20.93 18.60 16.28 13.95 11.63 9.30 6.98 4.65 2.33 0.00
_________________________________________________________________________________________________________
Luxembourg Hungary Belgium Czech Republic Sweden Latvia Croatia Ukraine France Gibraltar Georgia Spain Norway Netherlands Slovenia Estonia Switzerland Poland Belarus Finland Slovakia Albania Ireland Russia Lithuania Liechtenstein Denmark the United Kingdom Germany Monaco Moldova Kazakhstan Bulgaria Portugal Andorra Cyprus Vatican City Italy Faroe Islands Iceland Greece Malta Isle of Man
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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©2007 Icon Group International, Inc.
Financial Indicators
60
Operating Expenses - Total Countries
Value (total revenue = 100)
Rank
Percentile
23.14 18.15 16.61 13.94 13.33 12.50 12.03 11.95 10.21 9.13 7.33 7.16 5.63 4.89 4.37 3.98 3.56 3.18 3.11 2.28 1.70 1.48 1.25 0.97 0.90 0.76 0.55 0.53 0.51 0.49 0.48 0.46 0.20 0.05 0.04 -0.14 -0.17 -7.51
1 2 3 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 23 25 26 27 28 29 30 31 32 33 35 36 37 38 39 40 41 42 43
97.67 95.35 93.02 88.37 86.05 83.72 81.40 79.07 76.74 74.42 72.09 69.77 67.44 65.12 62.79 60.47 58.14 55.81 53.49 46.51 41.86 39.53 37.21 34.88 32.56 30.23 27.91 25.58 23.26 18.60 16.28 13.95 11.63 9.30 6.98 4.65 2.33 0.00
Region
_________________________________________________________________________________________________________
Finland Australia Philippines Netherlands Germany Spain Switzerland Ireland Norway Portugal Singapore France South Africa Denmark the United Kingdom Sweden India Peru Indonesia Hong Kong Malaysia USA Poland China Italy Belgium South Korea Luxembourg Argentina Russia Brazil Chile Israel Pakistan Japan Canada Greece Czech Republic
Europe Oceana Asia Europe Europe Europe Europe Europe Europe Europe Asia Europe Africa Europe Europe Europe Asia Latin America Asia Asia Asia North America Europe Asia Europe Europe Asia Europe Latin America Europe Latin America Latin America the Middle East the Middle East Asia North America Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Financial Indicators
61
Operating Expenses - Total (Computer Programming Services) Countries in Europe
Value (total revenue = 100)
Rank
Percentile
23.14 13.94 13.33 12.50 12.03 11.95 11.73 11.22 10.21 9.13 8.74 7.16 7.11 4.89 4.37 3.98 2.78 2.19 1.50 1.25 1.13 1.08 1.08 0.91 0.90 0.76 0.53 0.53 0.50 0.50 0.49 0.49 -0.16 -0.16 -0.17 -7.12 -7.13 -7.51
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38
97.37 94.74 92.11 89.47 86.84 84.21 81.58 78.95 76.32 73.68 71.05 68.42 65.79 63.16 60.53 57.89 55.26 52.63 50.00 47.37 44.74 42.11 39.47 36.84 34.21 31.58 28.95 26.32 23.68 21.05 18.42 15.79 13.16 10.53 7.89 5.26 2.63 0.00
_________________________________________________________________________________________________________
Finland Netherlands Germany Spain Switzerland Ireland Slovenia Liechtenstein Norway Portugal Cyprus France Monaco Denmark the United Kingdom Sweden Albania Faroe Islands Iceland Poland Moldova Kazakhstan Bulgaria Vatican City Italy Belgium Luxembourg Estonia Belarus Slovakia Russia Lithuania Isle of Man Malta Greece Croatia Latvia Czech Republic
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
62
Operating Income Countries
Value (total revenue = 100)
Rank
Percentile
44.13 42.82 42.71 22.13 21.70 20.11 18.94 15.51 15.01 14.89 14.41 12.94 12.42 11.66 11.46 11.33 10.30 10.05 9.33 8.23 7.67 7.58 7.42 7.22 7.20 7.06 6.91 6.79 6.72 6.71 6.42 6.34 5.88 5.59 5.48 5.02 4.58 4.55 3.91 3.82 3.49 2.36 0.12 -0.10 -4.06
1 2 3 5 6 7 8 10 11 12 13 14 15 16 17 18 20 21 22 24 25 26 28 29 30 31 32 33 34 35 36 37 38 40 41 43 44 45 47 48 49 50 51 52 53
98.11 96.23 94.34 90.57 88.68 86.79 84.91 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 62.26 60.38 58.49 54.72 52.83 50.94 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 24.53 22.64 18.87 16.98 15.09 11.32 9.43 7.55 5.66 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
New Zealand Turkey Mexico Philippines Hong Kong Israel Greece Argentina India Portugal Singapore Australia China Pakistan Indonesia Czech Republic USA Spain Japan South Korea Malaysia the United Kingdom Russia Canada Poland Brazil Denmark Thailand Chile France South Africa Netherlands Germany Italy Peru Belgium Switzerland Sweden Finland Taiwan Ireland Norway Luxembourg Austria Hungary
Oceana the Middle East Latin America Asia Asia the Middle East Europe Latin America Asia Europe Asia Oceana Asia the Middle East Asia Europe North America Europe Asia Asia Asia Europe Europe North America Europe Latin America Europe Asia Latin America Europe Africa Europe Europe Europe Latin America Europe Europe Europe Europe Asia Europe Europe Europe Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
63
Operating Income (Computer Programming Services) Countries in Europe
Value (total revenue = 100)
Rank
Percentile
45.70 40.69 37.34 36.29 35.01 20.81 18.94 17.56 17.33 14.89 14.25 13.97 11.33 10.75 10.75 10.41 10.05 9.44 7.94 7.58 7.57 7.56 7.42 7.40 7.20 6.91 6.71 6.47 6.34 6.23 6.22 5.88 5.63 5.59 5.02 4.78 4.58 4.55 4.27 3.91 3.49 2.36 0.12 -0.10 -0.10 -0.10 -0.10 -3.42 -3.47 -3.65 -4.06
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Andorra Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Faroe Islands Greece Malta Isle of Man Portugal Cyprus Monaco Czech Republic Latvia Croatia Iceland Spain Slovenia Estonia the United Kingdom Belarus Slovakia Russia Lithuania Poland Denmark France Moldova Netherlands Kazakhstan Bulgaria Germany Vatican City Italy Belgium Albania Switzerland Sweden Liechtenstein Finland Ireland Norway Luxembourg Guernsey Jersey San Marino Austria Georgia Gibraltar Ukraine Hungary
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
64
Earnings Before Interest and Taxes (EBIT) Countries
Value (total revenue = 100)
Rank
Percentile
56.35 55.88 55.73 42.24 39.12 26.28 23.20 23.02 22.37 20.54 18.11 17.90 17.41 17.26 17.12 16.42 16.16 16.12 14.48 11.97 11.40 11.10 11.03 10.71 9.67 9.37 9.14 9.14 9.09 8.88 8.30 8.19 8.15 8.15 7.93 7.53 7.35 6.46 5.67 5.07 4.88 4.41 1.52 1.24 0.68
1 2 3 5 6 7 8 9 10 11 13 14 15 16 18 19 20 21 24 26 27 28 29 30 31 32 33 34 35 36 38 39 40 41 42 43 44 46 47 48 49 50 51 52 53
98.11 96.23 94.34 90.57 88.68 86.79 84.91 83.02 81.13 79.25 75.47 73.58 71.70 69.81 66.04 64.15 62.26 60.38 54.72 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 28.30 26.42 24.53 22.64 20.75 18.87 16.98 13.21 11.32 9.43 7.55 5.66 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
New Zealand Turkey Mexico Pakistan Portugal Israel Philippines Hong Kong Greece Thailand India Argentina Czech Republic Brazil Indonesia Chile Australia Singapore China Ireland Denmark Spain Germany USA Malaysia Japan Poland Peru South Korea Italy South Africa Russia the United Kingdom Taiwan France Netherlands Finland Switzerland Canada Sweden Belgium Norway Hungary Luxembourg Austria
Oceana the Middle East Latin America the Middle East Europe the Middle East Asia Asia Europe Asia Asia Latin America Europe Latin America Asia Latin America Oceana Asia Asia Europe Europe Europe Europe North America Asia Asia Europe Latin America Asia Europe Africa Europe Europe Asia Europe Europe Europe Europe North America Europe Europe Europe Europe Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
65
Earnings Before Interest and Taxes (EBIT) (Computer Programming Services) Countries in Europe
Value (total revenue = 100)
Rank
Percentile
58.35 53.10 48.73 47.36 45.68 39.12 37.45 22.37 22.07 20.74 20.46 17.41 16.52 16.52 15.63 11.97 11.40 11.10 11.03 10.82 10.42 9.14 8.95 8.88 8.76 8.36 8.35 8.22 8.19 8.17 8.15 7.98 7.93 7.91 7.89 7.53 7.35 6.46 6.02 5.07 4.88 4.41 1.52 1.36 1.30 1.28 1.24 0.68 0.67 0.65 0.65
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Andorra Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Portugal Cyprus Greece Faroe Islands Malta Isle of Man Czech Republic Latvia Croatia Monaco Ireland Denmark Spain Germany Iceland Slovenia Poland Vatican City Italy Estonia Belarus Slovakia Moldova Russia Lithuania the United Kingdom Albania France Kazakhstan Bulgaria Netherlands Finland Switzerland Liechtenstein Sweden Belgium Norway Hungary Ukraine Gibraltar Georgia Luxembourg Austria San Marino Jersey Guernsey
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
66
Pretax Income Countries
Value (total revenue = 100)
Rank
Percentile
55.18 34.67 34.58 25.27 22.35 21.85 20.54 17.89 16.43 16.14 15.60 15.51 15.02 14.14 12.67 12.16 10.64 9.69 9.69 9.27 9.21 8.79 8.52 8.34 8.30 7.13 6.87 6.76 6.60 6.53 5.69 5.62 5.60 5.41 5.24 5.15 4.51 4.21 4.21 3.65 3.47 2.21 1.22 0.54 0.08
1 2 3 5 6 7 8 10 11 12 13 14 15 17 18 20 23 24 25 26 27 28 29 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 51 52 53
98.11 96.23 94.34 90.57 88.68 86.79 84.91 81.13 79.25 77.36 75.47 73.58 71.70 67.92 66.04 62.26 56.60 54.72 52.83 50.94 49.06 47.17 45.28 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
New Zealand Turkey Mexico Israel Hong Kong Philippines Greece India Czech Republic Portugal Singapore Indonesia Thailand Australia China Argentina Pakistan USA Spain Germany South Korea Malaysia Denmark Japan Russia the United Kingdom Taiwan France Italy Poland Switzerland Netherlands Finland Brazil South Africa Chile Sweden Ireland Canada Belgium Norway Peru Hungary Luxembourg Austria
Oceana the Middle East Latin America the Middle East Asia Asia Europe Asia Europe Europe Asia Asia Asia Oceana Asia Latin America the Middle East North America Europe Europe Asia Asia Europe Asia Europe Europe Asia Europe Europe Europe Europe Europe Europe Latin America Africa Latin America Europe Europe North America Europe Europe Latin America Europe Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
67
Pretax Income (Computer Programming Services) Countries in Europe
Value (total revenue = 100)
Rank
Percentile
57.14 32.94 30.23 29.38 28.34 21.44 20.54 19.03 18.78 16.43 16.14 15.59 15.59 15.45 15.13 9.79 9.69 9.27 9.10 8.87 8.52 8.47 8.45 8.30 8.28 7.13 6.76 6.65 6.60 6.53 5.87 5.69 5.65 5.64 5.62 5.60 5.31 4.51 4.21 3.65 3.47 1.93 1.22 1.09 1.04 1.02 0.54 0.08 0.08 0.08 0.08
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Andorra Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Faroe Islands Greece Malta Isle of Man Czech Republic Portugal Latvia Croatia Cyprus Monaco Iceland Spain Germany Slovenia Estonia Denmark Belarus Slovakia Russia Lithuania the United Kingdom France Vatican City Italy Poland Moldova Switzerland Kazakhstan Bulgaria Netherlands Finland Liechtenstein Sweden Ireland Belgium Norway Albania Hungary Ukraine Gibraltar Georgia Luxembourg Austria San Marino Jersey Guernsey
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
68
Income Taxes Countries
Value (total revenue = 100)
Rank
Percentile
15.37 15.32 14.16 8.12 7.61 6.08 5.71 5.25 4.55 4.13 4.09 3.86 3.85 3.55 3.55 3.38 3.09 2.64 2.54 2.53 2.49 2.45 2.35 2.22 2.12 2.05 2.03 1.99 1.98 1.96 1.93 1.85 1.81 1.74 1.40 1.38 1.33 1.22 0.96 0.86 0.68 0.57 0.30 0.17 -0.22
1 2 4 5 6 7 8 9 12 14 15 16 18 19 20 21 22 24 25 26 27 28 29 30 31 32 33 34 35 36 37 39 40 41 42 43 44 45 46 47 49 50 51 52 53
98.11 96.23 92.45 90.57 88.68 86.79 84.91 83.02 77.36 73.58 71.70 69.81 66.04 64.15 62.26 60.38 58.49 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 11.32 7.55 5.66 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Turkey Mexico New Zealand Greece Czech Republic Philippines Thailand Portugal Japan Argentina Indonesia Italy Israel Australia Germany USA Denmark Singapore India South Africa France Belgium Malaysia the United Kingdom Hong Kong South Korea Finland Netherlands Poland Sweden Canada Russia Spain China Brazil Switzerland Chile Ireland Peru Taiwan Norway Hungary Pakistan Austria Luxembourg
the Middle East Latin America Oceana Europe Europe Asia Asia Europe Asia Latin America Asia Europe the Middle East Oceana Europe North America Europe Asia Asia Africa Europe Europe Asia Europe Asia Asia Europe Europe Europe Europe North America Europe Europe Asia Latin America Europe Latin America Europe Latin America Asia Europe Europe the Middle East Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
69
Income Taxes (Computer Programming Services) Countries in Europe
Value (total revenue = 100)
Rank
Percentile
14.67 14.60 13.40 13.02 12.56 8.12 7.61 7.53 7.43 7.22 7.22 5.25 5.03 3.89 3.86 3.55 3.41 3.09 2.56 2.49 2.45 2.22 2.03 2.03 1.99 1.98 1.97 1.96 1.88 1.88 1.85 1.84 1.81 1.78 1.71 1.71 1.70 1.38 1.29 1.22 0.83 0.68 0.57 0.51 0.48 0.48 0.17 0.17 0.16 0.16 -0.22
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Andorra Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Greece Czech Republic Malta Isle of Man Latvia Croatia Portugal Cyprus Vatican City Italy Germany Iceland Denmark Monaco France Belgium the United Kingdom Faroe Islands Finland Netherlands Poland Estonia Sweden Belarus Slovakia Russia Lithuania Spain Moldova Kazakhstan Bulgaria Slovenia Switzerland Liechtenstein Ireland Albania Norway Hungary Ukraine Gibraltar Georgia Austria San Marino Jersey Guernsey Luxembourg
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.5 3.5.1
70
FINANCIAL RETURNS IN CZECH REPUBLIC: PROFITABILITY RATIOS Overview
In this chapter we consider additional financial ratios estimated for firms involved in computer programming services operating in Czech Republic benchmarked against global averages. The chapter begins by defining relevant terms. Estimates are then presented for the proto-typical firm operating in Czech Republic compared to average global benchmarks. For ratios where there are large deviations between the average firm in Czech Republic and the benchmarks, graphics are provided. Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key ratios are highlighted across countries in the comparison group.
3.5.2
Ratios – Definitions of Terms
The following definitions are provided for those less familiar with financial ratio analysis. As this chapter deals with the global benchmarking of ratios, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •
Accounts Receivables Days. The number of days' receivable sales generally correlates to the amount of the accounts receivables to the average daily sales on account. Accounts receivables days is often determined by dividing the gross receivables by (net sales/365).
•
Cash Earnings Return On Equity (%). Cash earnings return on equity generally measures the return of revenues to the shareholders. This ratio is generally calculated by dividing (net income before nonrecurring items minus preferred dividends) by the average common equity.
•
Cash Flow. Cash flow is generally defined as being equal to the company's net income plus the charge-off amounts for depreciation, depletion, amortization, extraordinary charges to reserves. These are bookkeeping deductions which are not paid out as cash.
•
Current Ratio. The current ratio is generally defined as a ratio of liquidity measuring the ability of a business to pay its current obligations when due. The current ratio is generally calculated by dividing total current assets by total current liabilities. Managers and lenders often want the current ratio to be 2.00 or greater. This ratio is often seen as an indication of short-term debt-paying ability. The higher the ratio, the more liquid the company.
•
Dividend Payout (% Earnings) - Total Dividends (%). The dividend payout ratio is generally used to measure the amount of current earnings per common share which are paid out in dividends. This ratio is generally determined by dividing dividends per common share by diluted earnings per share.
•
Fixed Charge Coverage Ratio. The fixed charge coverage ratio is generally seen as an indication of the company's ability to cover its fixed charges. This ratio is typically determined by dividing recurring earnings excluding interest expense, tax expense, equity earnings, and minority earnings plus interest from rentals by interest expense including capitalized interest and interest from rentals.
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Financial Indicators • •
71
Gross Profit Margin (%). The gross profit margin is typically defined to equals the difference, in percent, between net sales revenue and the cost of goods sold. Inventories (# of Days) Held. Inventory days held is generally determined by dividing the ending inventory by (the cost of goods held/365). The number of days held results in the average daily cost of goods held.
•
Inventory Turnover (%). Inventory turnover is used as a measure of the balance of inventory. It generally compares the amount of inventory with the total sales for the year. The ratio can reflect both on the quality of the inventory and the efficiency of management. Typically, the higher the turnover rate, the greater the likelihood that profits would be larger and less working capital bound up in inventory.
•
Net Margin (%). The net margin is the ratio of net income dollars generated by each dollar of sales.
•
Operating Profit Margin (%). Operating profit margin percent is the ratio of operating profit to net sales. Operating profit (loss) is income or loss before taxes calculated by the difference between total revenues and total expense disregarding the effects of any extraordinary transactions.
•
Quick Ratio. The quick ratio, also commonly known as the “acid test ratio”, is a refined current ratio and is often seen as a more conservative measure of liquidity. The quick ratio is generally determined by dividing cash and equivalents plus trade receivables by total current liabilities. The ratio shows the degree to which a company's current liabilities can be covered by the most liquid current assets. Financial management texts generally conclude that any value of less than 1 to 1 implies a reciprocal dependency on inventory or other current assets to liquidate short-term debt.
•
Reinvestment Rate - Total (%). The reinvestment rate is typically defined as the rate at which an investor assumes interest payments made on a debt security can be reinvested over the life of that security.
•
Return on Assets (%). Return on assets is generally used to measure a company's ability to use assets to create profit.
•
Return on Equity - Total (%). The return on total equity ratio is often seen to reflect the profitability of the company's operations after income taxes. Return on equity is often considered to be a good measure of the company's profitability. Tax laws and tax loss carryovers can affect the net income and therefore can also affect the return on equity.
•
Return on Invested Capital (%). The ratio of return on invested capital is typically defined as an evaluation of earnings performance without regard to the method of financing. This ratio measures the earnings on investment and is an indication of how well the company utilizes its asset base. Return on investment is a type of return on capital, therefore this ratio can be an indication of the company’s ability to reward investors who provide long-term funds and to attract future investors.
•
Tax Rate (%). The tax rate is typically defined as the average rate of domestic tax owed to government by the company.
•
Working Capital. Net working capital equals the difference between total current assets and total current liabilities. Working capital often reflects a company's ability to expand volume and meet obligations. Since growth is usually one goal, the amount of working capital on this year's balance sheet should be greater than that of the previous year's. This is an efficiency, or turnover, ratio which benchmarks the rate at which current assets less current liabilities are used by the company in making sales. A low ratio can indicate a less profitable use of working capital in making sales. On the other hand, a very high ratio can indicate the company is wasting current assets which could be more efficiently deployed in production and in increasing
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Financial Indicators
72
sales and profits; or that the company my be undercapitalized, and thus vulnerable to liquidity problems in a period of weak business conditions.
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Financial Indicators
3.5.3
73
Ratio Structure: Outlook
Using the methodology described in the introduction, the following table summarizes ratio structure benchmarks for firms involved in computer programming services in Czech Republic. All figures are current-year projections for companies operating in Czech Republic based on latest financial results available. Ratios Czech Republic Europe World Avg. _________________________________________________________________________________________________________
Profitability Return on Equity - Total (%) Reinvestment Rate - Total (%) Return on Assets (%) Return on Invested Capital (%) Cash Earnings Return On Equity (%) Cash Flow % Sales Cost Goods Sold / Sales (%) Gross Profit Margin (%) Operating Profit Margin (%) Operating Inc / Total Capital (%) Pretax Margin (%) Tax Rate (%) Net Margin (%) Total Asset Turnover (X) th USD Asset Utilization Inventory Turnover (%) Net Sales % Working Capital Capital Expenditure % Gross Fixed Assets Capital Expenditure % Total Assets Capital Expenditure % Total Sales Accumulated Depreciation % Gross Fixed Assets Leverage Total Debt % Total Capital Equity % Total Capital Total Capital % Assets Fixed Charge Coverage Ratio Dividend Payout (% Earnings) - Total Dividends Fixed Assets % Common Equity Working Capital % Total Capital Liquidity Quick Ratio Current Ratio Cash & Equivalents % Total Current Assets Receivables % Total Current Assets Inventories % Total Current Assets Accounts Receivables Days Inventories (# of Days) Held
8.74 3.95 6.22 8.71 9.67 9.97 84.36 8.75 11.33 10.99 16.43 45.54 8.82 0.61
14.06 10.18 6.99 10.48 48.71 10.21 58.13 29.02 9.85 13.15 10.53 48.33 6.60 1.05
17.24 14.50 11.56 14.69 40.11 17.05 55.68 29.38 12.16 16.09 12.89 26.86 9.53 0.87
40.75 2.86 23.29 12.67 22.82 41.52
575.30 2.97 34.52 7.09 10.66 43.89
56.47 6.44 24.58 7.10 11.27 35.46
1.70 100.00 69.77 5.68 27.05 66.87 33.18
23.44 77.99 57.82 44.87 13.21 64.49 39.57
18.53 80.35 64.53 173.48 14.92 50.83 38.37
2.23 2.33 60.60 34.91 2.11 92.99 9.38
1.99 2.34 29.18 50.65 8.33 112.98 33.74
2.00 2.38 32.31 41.44 10.66 81.98 57.17
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.5.4
74
Large Variances: Ratios
The following graphics summarize for computer programming services the large ratio structure gaps between firms operating in Czech Republic and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.
Gap: Cash Earnings Return On Equity (%) 60
48.71
40 20
40.11
9.67
0 -20
-30.44
-40 Czech Republic
Europe
World Average
Gap
Gap: Cost Goods Sold / Sales (%) 100
84.36
80
58.13
60
55.68
40
28.68
20 0 Czech Republic
Europe
World Average
Gap
Gap: Gross Profit Margin (%) 29.02
30 20 10
29.38
8.75
0 -10 -20
-20.63
-30 Czech Republic
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Europe
World Average
Gap
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Financial Indicators
75
Gap: Tax Rate (%) 50
48.33
45.54
40 26.86
30
18.68
20 10 0 Czech Republic
Europe
World Average
Gap
Gap: Inventory Turnover (%) 600 500 400 300 200 100 0 -100
575.3
56.47
40.75
-15.72 Czech Republic
Europe
World Average
Gap
Gap: Total Debt % Total Capital 30
23.44
20 10
18.53
1.7
0 -10 -16.83
-20 Czech Republic
Europe
World Average
Gap
Gap: Equity % Total Capital 100
100
77.99
80
80.35
60 40
19.65
20 0 Czech Republic
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Europe
World Average
Gap
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Financial Indicators
76
Gap: Fixed Charge Coverage Ratio 173.48
200 100
44.87
5.68 0 -100
-167.8
-200 Czech Republic
Europe
World Average
Gap
Gap: Fixed Assets % Common Equity 80
66.87
64.49
60
50.83
40 16.04
20 0 Czech Republic
Europe
World Average
Gap
Gap: Cash & Equivalents % Total Current Assets 80 60
60.6
40
29.18
32.31
28.29
20 0 Czech Republic
Europe
World Average
Gap
Gap: Inventories (# of Days) Held 57.17
60
33.74
40 20
9.38
0 -20 -40
-47.79
-60 Czech Republic
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Europe
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
3.5.5
77
Key Percentiles and Rankings
We now consider the distribution of financial ratios for computer programming services using ranks and percentiles. What percent of countries have a value lower or higher than Czech Republic (what is the ratio's rank or percentile)? The table below answers this question with respect to financial ratios. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key financial ratios are highlighted in additional tables. Ratios
Czech Republic
Rank of Total
Percentile
8.74 3.95 6.22 8.71 9.67 9.97 84.36 8.75 11.33 10.99 16.43 45.54 8.82 0.61
40 of 53 41 of 53 36 of 53 35 of 53 51 of 53 33 of 53 4 of 48 49 of 51 18 of 53 33 of 53 11 of 53 15 of 52 18 of 53 43 of 53
24.53 22.64 32.08 33.96 3.77 37.74 91.67 3.92 66.04 37.74 79.25 71.15 66.04 18.87
40.75 2.86 23.29 12.67 22.82 41.52
17 of 48 32 of 52 14 of 49 5 of 53 6 of 53 28 of 47
64.58 38.46 71.43 90.57 88.68 40.43
1.70 100.00 69.77 5.68 27.05 66.87 33.18
53 of 53 1 of 53 13 of 53 39 of 53 10 of 39 13 of 53 35 of 52
0.00 98.11 75.47 26.42 74.36 75.47 32.69
2.23 2.33 60.60 34.91 2.11 92.99 9.38
20 of 52 26 of 52 3 of 52 42 of 52 43 of 48 26 of 49 45 of 48
61.54 50.00 94.23 19.23 10.42 46.94 6.25
_________________________________________________________________________________________________________
Profitability Return on Equity - Total (%) Reinvestment Rate - Total (%) Return on Assets (%) Return on Invested Capital (%) Cash Earnings Return On Equity (%) Cash Flow % Sales Cost Goods Sold / Sales (%) Gross Profit Margin (%) Operating Profit Margin (%) Operating Inc / Total Capital (%) Pretax Margin (%) Tax Rate (%) Net Margin (%) Total Asset Turnover (X) th USD Asset Utilization Inventory Turnover (%) Net Sales % Working Capital Capital Expenditure % Gross Fixed Assets Capital Expenditure % Total Assets Capital Expenditure % Total Sales Accumulated Depreciation % Gross Fixed Assets Leverage Total Debt % Total Capital Equity % Total Capital Total Capital % Assets Fixed Charge Coverage Ratio Dividend Payout (% Earnings) - Total Dividends Fixed Assets % Common Equity Working Capital % Total Capital Liquidity Quick Ratio Current Ratio Cash & Equivalents % Total Current Assets Receivables % Total Current Assets Inventories % Total Current Assets Accounts Receivables Days Inventories (# of Days) Held
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
78
Gross Profit Margin (%) Countries
Value
Rank
Percentile
Israel Turkey Mexico Indonesia USA New Zealand Hong Kong Canada Italy Portugal Australia Germany the United Kingdom Singapore Ireland Philippines Greece Thailand Poland Switzerland Denmark Japan China Argentina Finland Malaysia Pakistan Netherlands South Korea Norway India Russia Peru Brazil Spain Chile South Africa France Sweden Belgium Czech Republic Hungary Luxembourg
73.96 67.41 67.23 55.33 47.75 44.13 43.53 43.50 42.71 42.59 41.33 37.36 36.34 36.02 35.68 35.35 34.98 34.56 32.92 32.55 32.32 30.70 30.63 29.99 28.69 27.90 27.00 26.15 25.91 24.65 24.00 23.35 23.10 23.00 22.55 21.88 21.76 17.53 10.62 10.35 8.75 8.74 7.79
1 2 3 5 7 8 9 10 11 12 13 15 16 17 18 19 20 21 22 23 24 25 26 28 30 31 32 34 35 36 37 39 40 41 42 43 44 45 47 48 49 50 51
98.04 96.08 94.12 90.20 86.27 84.31 82.35 80.39 78.43 76.47 74.51 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 45.10 41.18 39.22 37.25 33.33 31.37 29.41 27.45 23.53 21.57 19.61 17.65 15.69 13.73 11.76 7.84 5.88 3.92 1.96 0.00
Region
_________________________________________________________________________________________________________
the Middle East the Middle East Latin America Asia North America Oceana Asia North America Europe Europe Oceana Europe Europe Asia Europe Asia Europe Asia Europe Europe Europe Asia Asia Latin America Europe Asia the Middle East Europe Asia Europe Asia Europe Latin America Latin America Europe Latin America Africa Europe Europe Europe Europe Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
79
Gross Profit Margin (%) (Computer Programming Services) Countries in Europe
Value
Rank
Percentile
Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Iceland Andorra Vatican City Italy Portugal Faroe Islands Cyprus Germany the United Kingdom Ireland Greece Monaco Poland Switzerland Malta Denmark Isle of Man Liechtenstein Moldova Finland Kazakhstan Bulgaria Netherlands Estonia Norway Belarus Slovakia Russia Lithuania Spain Slovenia Albania France Sweden Belgium Czech Republic Hungary Latvia Croatia Ukraine Luxembourg Gibraltar Georgia
64.05 58.78 57.13 55.11 48.23 45.70 43.05 42.71 42.59 41.74 40.77 37.36 36.34 35.68 34.98 34.93 32.92 32.55 32.42 32.32 31.99 30.37 29.60 28.69 28.48 28.43 26.15 24.98 24.65 23.84 23.79 23.35 23.30 22.55 21.17 20.16 17.53 10.62 10.35 8.75 8.74 8.31 8.31 7.86 7.79 7.48 7.36
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47
97.87 95.74 93.62 91.49 89.36 87.23 85.11 82.98 80.85 78.72 76.60 74.47 72.34 70.21 68.09 65.96 63.83 61.70 59.57 57.45 55.32 53.19 51.06 48.94 46.81 44.68 42.55 40.43 38.30 36.17 34.04 31.91 29.79 27.66 25.53 23.40 21.28 19.15 17.02 14.89 12.77 10.64 8.51 6.38 4.26 2.13 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
80
Pretax Margin (%) Countries
Value
Rank
Percentile
New Zealand Turkey Mexico Israel Hong Kong Philippines Greece India Czech Republic Portugal Singapore Indonesia Thailand Australia China Argentina Pakistan USA Spain Germany South Korea Malaysia Denmark Japan Russia the United Kingdom Taiwan France Italy Poland Switzerland Netherlands Finland Brazil South Africa Chile Sweden Ireland Canada Belgium Norway Peru Hungary Luxembourg Austria
55.18 34.67 34.58 25.27 22.35 21.85 20.54 17.89 16.43 16.14 15.60 15.51 15.02 14.14 12.67 12.16 10.64 9.69 9.69 9.27 9.21 8.79 8.52 8.34 8.30 7.13 6.87 6.76 6.60 6.53 5.69 5.62 5.60 5.41 5.24 5.15 4.51 4.21 4.21 3.65 3.47 2.21 1.22 0.54 0.08
1 2 3 5 6 7 8 10 11 12 13 14 15 17 18 20 23 24 25 26 27 28 29 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 51 52 53
98.11 96.23 94.34 90.57 88.68 86.79 84.91 81.13 79.25 77.36 75.47 73.58 71.70 67.92 66.04 62.26 56.60 54.72 52.83 50.94 49.06 47.17 45.28 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Oceana the Middle East Latin America the Middle East Asia Asia Europe Asia Europe Europe Asia Asia Asia Oceana Asia Latin America the Middle East North America Europe Europe Asia Asia Europe Asia Europe Europe Asia Europe Europe Europe Europe Europe Europe Latin America Africa Latin America Europe Europe North America Europe Europe Latin America Europe Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
81
Pretax Margin (%) (Computer Programming Services) Countries in Europe
Value
Rank
Percentile
Andorra Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Faroe Islands Greece Malta Isle of Man Czech Republic Portugal Latvia Croatia Cyprus Monaco Iceland Spain Germany Slovenia Estonia Denmark Belarus Slovakia Russia Lithuania the United Kingdom France Vatican City Italy Poland Moldova Switzerland Kazakhstan Bulgaria Netherlands Finland Liechtenstein Sweden Ireland Belgium Norway Albania Hungary Ukraine Gibraltar Georgia Luxembourg Austria San Marino Jersey Guernsey
57.14 32.94 30.23 29.38 28.34 21.44 20.54 19.03 18.78 16.43 16.14 15.59 15.59 15.45 15.13 9.79 9.69 9.27 9.10 8.87 8.52 8.47 8.45 8.30 8.28 7.13 6.76 6.65 6.60 6.53 5.87 5.69 5.65 5.64 5.62 5.60 5.31 4.51 4.21 3.65 3.47 1.93 1.22 1.09 1.04 1.02 0.54 0.08 0.08 0.08 0.08
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
82
Quick Ratio Countries
Value
Rank
Percentile
New Zealand Denmark Germany Israel Hong Kong Ireland Japan Indonesia Canada Malaysia South Korea USA Singapore India Philippines Russia Italy Czech Republic Netherlands China Sweden Poland Norway Greece Australia Thailand Finland the United Kingdom Belgium Switzerland Hungary France Portugal Luxembourg South Africa Austria Spain Argentina Taiwan Brazil Turkey Mexico Chile Peru
10.37 4.86 4.34 4.17 3.39 3.22 3.10 3.07 2.99 2.99 2.86 2.76 2.72 2.64 2.61 2.57 2.34 2.23 2.09 1.92 1.92 1.87 1.81 1.81 1.77 1.60 1.59 1.57 1.47 1.47 1.45 1.44 1.29 1.26 1.25 1.11 1.04 1.04 0.94 0.92 0.91 0.91 0.88 0.44
1 2 3 4 5 6 7 8 9 10 12 13 14 15 17 18 19 20 23 24 25 26 27 28 29 30 31 32 33 34 35 36 38 39 40 42 43 44 45 46 47 48 49 51
98.08 96.15 94.23 92.31 90.38 88.46 86.54 84.62 82.69 80.77 76.92 75.00 73.08 71.15 67.31 65.38 63.46 61.54 55.77 53.85 51.92 50.00 48.08 46.15 44.23 42.31 40.38 38.46 36.54 34.62 32.69 30.77 26.92 25.00 23.08 19.23 17.31 15.38 13.46 11.54 9.62 7.69 5.77 1.92
Region
_________________________________________________________________________________________________________
Oceana Europe Europe the Middle East Asia Europe Asia Asia North America Asia Asia North America Asia Asia Asia Europe Europe Europe Europe Asia Europe Europe Europe Europe Oceana Asia Europe Europe Europe Europe Europe Europe Europe Europe Africa Europe Europe Latin America Asia Latin America the Middle East Latin America Latin America Latin America
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
83
Quick Ratio (Computer Programming Services) Countries in Europe
Value
Rank
Percentile
Andorra Denmark Germany Faroe Islands Ireland Iceland Estonia Monaco Belarus Slovakia Russia Lithuania Vatican City Italy Czech Republic Latvia Croatia Netherlands Sweden Poland Norway Greece Moldova Malta Isle of Man Kazakhstan Bulgaria Finland the United Kingdom Belgium Switzerland Hungary France Liechtenstein Ukraine Portugal Luxembourg Gibraltar Cyprus Georgia Austria San Marino Guernsey Jersey Spain Slovenia Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Albania
10.74 4.86 4.34 3.25 3.22 2.79 2.75 2.64 2.63 2.62 2.57 2.57 2.36 2.34 2.23 2.11 2.11 2.09 1.92 1.87 1.81 1.81 1.68 1.68 1.65 1.62 1.62 1.59 1.57 1.47 1.47 1.45 1.44 1.37 1.31 1.29 1.26 1.24 1.24 1.22 1.11 1.10 1.07 1.07 1.04 0.98 0.86 0.79 0.77 0.74 0.39
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
84
Current Ratio Countries
Value
Rank
Percentile
New Zealand Denmark Germany Israel Hong Kong Indonesia Ireland South Korea Japan Malaysia Canada Switzerland Russia USA India Philippines Singapore Finland Italy China Netherlands Czech Republic Sweden Poland Norway Greece Australia Hungary Thailand the United Kingdom Belgium France South Africa Portugal Turkey Mexico Brazil Luxembourg Chile Peru Taiwan Austria Spain Argentina
10.37 5.08 4.92 4.22 3.65 3.58 3.51 3.47 3.41 3.40 3.38 3.19 3.13 3.08 2.99 2.98 2.96 2.54 2.41 2.41 2.33 2.33 2.15 2.08 2.00 1.99 1.96 1.90 1.85 1.83 1.64 1.61 1.51 1.47 1.46 1.46 1.41 1.37 1.34 1.31 1.28 1.28 1.22 1.13
1 2 3 4 5 6 7 8 9 10 11 13 15 16 17 18 19 21 23 24 25 26 27 28 29 30 31 32 33 34 35 36 38 39 40 41 43 44 46 47 48 49 50 51
98.08 96.15 94.23 92.31 90.38 88.46 86.54 84.62 82.69 80.77 78.85 75.00 71.15 69.23 67.31 65.38 63.46 59.62 55.77 53.85 51.92 50.00 48.08 46.15 44.23 42.31 40.38 38.46 36.54 34.62 32.69 30.77 26.92 25.00 23.08 21.15 17.31 15.38 11.54 9.62 7.69 5.77 3.85 1.92
Region
_________________________________________________________________________________________________________
Oceana Europe Europe the Middle East Asia Asia Europe Asia Asia Asia North America Europe Europe North America Asia Asia Asia Europe Europe Asia Europe Europe Europe Europe Europe Europe Oceana Europe Asia Europe Europe Europe Africa Europe the Middle East Latin America Latin America Europe Latin America Latin America Asia Europe Europe Latin America
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
85
Current Ratio (Computer Programming Services) Countries in Europe
Value
Rank
Percentile
Andorra Denmark Germany Ireland Faroe Islands Estonia Belarus Switzerland Slovakia Russia Lithuania Iceland Liechtenstein Monaco Finland Vatican City Italy Netherlands Czech Republic Latvia Croatia Sweden Poland Norway Greece Hungary Moldova Malta the United Kingdom Isle of Man Kazakhstan Bulgaria Ukraine Belgium Gibraltar France Georgia Portugal Cyprus Romania Luxembourg Austria Bosnia & Herzegovina San Marino Macedonia Jersey Guernsey Spain Serbia & Montenegro Albania Slovenia
10.74 5.08 4.92 3.51 3.50 3.35 3.20 3.19 3.19 3.13 3.12 3.11 2.98 2.87 2.54 2.43 2.41 2.33 2.33 2.21 2.21 2.15 2.08 2.00 1.99 1.90 1.87 1.84 1.83 1.82 1.80 1.80 1.71 1.64 1.63 1.61 1.60 1.47 1.41 1.39 1.37 1.28 1.27 1.26 1.24 1.23 1.23 1.22 1.19 1.14 1.14
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
86
Inventories % Total Current Assets Countries
Value
Rank
Percentile
Peru Brazil Chile Philippines Switzerland South Africa Indonesia Thailand China South Korea Hungary Spain Russia Norway Taiwan Singapore Greece Hong Kong Malaysia Belgium Germany Netherlands Portugal Denmark Japan France Canada the United Kingdom Argentina Italy Sweden Poland Austria USA Australia Czech Republic India Luxembourg Israel Finland Ireland
64.97 33.17 31.56 19.77 16.33 16.11 16.09 16.07 15.98 13.24 13.11 12.64 11.93 10.99 10.85 10.58 9.68 9.09 9.05 8.99 8.85 8.35 8.00 7.97 7.92 7.68 7.52 7.48 6.82 6.74 6.68 6.37 6.26 5.35 4.93 2.11 1.47 1.36 0.81 0.61 0.05
1 3 4 5 7 8 9 10 11 14 15 16 19 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
97.92 93.75 91.67 89.58 85.42 83.33 81.25 79.17 77.08 70.83 68.75 66.67 60.42 56.25 54.17 52.08 50.00 47.92 45.83 43.75 41.67 39.58 37.50 35.42 33.33 31.25 29.17 27.08 25.00 22.92 20.83 18.75 16.67 14.58 12.50 10.42 8.33 6.25 4.17 2.08 0.00
Region
_________________________________________________________________________________________________________
Latin America Latin America Latin America Asia Europe Africa Asia Asia Asia Asia Europe Europe Europe Europe Asia Asia Europe Asia Asia Europe Europe Europe Europe Europe Asia Europe North America Europe Latin America Europe Europe Europe Europe North America Oceana Europe Asia Europe the Middle East Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
87
Inventories % Total Current Assets (Computer Programming Services) Countries in Europe
Value
Rank
Percentile
56.71 16.33 15.24 13.11 12.77 12.64 12.18 12.16 11.93 11.91 11.87 11.79 11.21 11.04 10.99 10.26 9.68 8.99 8.97 8.85 8.85 8.72 8.35 8.00 7.97 7.68 7.66 7.48 6.79 6.74 6.68 6.37 6.26 6.20 6.05 6.05 5.73 5.51 5.50 5.41 2.11 2.00 2.00 1.36 0.61 0.05
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46
97.83 95.65 93.48 91.30 89.13 86.96 84.78 82.61 80.43 78.26 76.09 73.91 71.74 69.57 67.39 65.22 63.04 60.87 58.70 56.52 54.35 52.17 50.00 47.83 45.65 43.48 41.30 39.13 36.96 34.78 32.61 30.43 28.26 26.09 23.91 21.74 19.57 17.39 15.22 13.04 10.87 8.70 6.52 4.35 2.17 0.00
_________________________________________________________________________________________________________
Albania Switzerland Liechtenstein Hungary Estonia Spain Belarus Slovakia Russia Lithuania Slovenia Ukraine Gibraltar Georgia Norway Monaco Greece Belgium Malta Isle of Man Germany Faroe Islands Netherlands Portugal Denmark France Cyprus the United Kingdom Vatican City Italy Sweden Poland Austria San Marino Guernsey Jersey Moldova Kazakhstan Bulgaria Iceland Czech Republic Latvia Croatia Luxembourg Finland Ireland
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
88
Accounts Receivables Days Countries
Value
Rank
Percentile
Thailand Finland Portugal Italy Greece Spain Malaysia Poland Israel Argentina Hong Kong Singapore France New Zealand Hungary Norway Germany South Korea Belgium Netherlands India Russia Czech Republic Ireland Austria China the United Kingdom Philippines Canada Taiwan Denmark USA Sweden Indonesia Australia South Africa Japan Switzerland Peru Luxembourg Brazil Chile
238.82 197.13 196.64 183.90 169.78 163.41 154.47 142.01 129.47 125.41 123.21 119.38 118.07 111.65 110.76 106.09 105.62 104.49 103.53 96.44 95.72 94.16 92.99 91.93 90.81 89.52 85.71 83.73 80.73 79.71 78.40 78.39 77.55 76.03 74.92 73.32 71.30 69.17 63.57 58.41 47.02 44.74
1 3 4 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 41 43 44 45 48 49
97.96 93.88 91.84 87.76 85.71 83.67 81.63 79.59 77.55 75.51 73.47 71.43 69.39 67.35 65.31 63.27 61.22 59.18 57.14 55.10 51.02 48.98 46.94 44.90 42.86 40.82 38.78 36.73 34.69 32.65 30.61 28.57 26.53 24.49 22.45 20.41 16.33 12.24 10.20 8.16 2.04 0.00
Region
_________________________________________________________________________________________________________
Asia Europe Europe Europe Europe Europe Asia Europe the Middle East Latin America Asia Asia Europe Oceana Europe Europe Europe Asia Europe Europe Asia Europe Europe Europe Europe Asia Europe Asia North America Asia Europe North America Europe Asia Oceana Africa Asia Europe Latin America Europe Latin America Latin America
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
89
Accounts Receivables Days (Computer Programming Services) Countries in Europe
Value
Rank
Percentile
Finland Portugal Cyprus Vatican City Italy Greece Spain Malta Isle of Man Slovenia Poland Moldova Kazakhstan Bulgaria Faroe Islands France Monaco Andorra Hungary Norway Germany Belgium Estonia Ukraine Netherlands Belarus Slovakia Gibraltar Russia Lithuania Georgia Czech Republic Ireland Austria San Marino Latvia Croatia Guernsey Jersey the United Kingdom Iceland Denmark Sweden Switzerland Liechtenstein Luxembourg Albania
197.13 196.64 188.23 185.38 183.90 169.78 163.41 157.36 155.28 153.41 142.01 127.68 122.87 122.65 118.14 118.07 115.76 115.62 110.76 106.09 105.62 103.53 100.73 99.60 96.44 96.14 95.92 94.70 94.16 93.94 93.24 92.99 91.93 90.81 89.95 88.26 88.23 87.70 87.70 85.71 79.19 78.40 77.55 69.17 64.55 58.41 55.49
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47
97.87 95.74 93.62 91.49 89.36 87.23 85.11 82.98 80.85 78.72 76.60 74.47 72.34 70.21 68.09 65.96 63.83 61.70 59.57 57.45 55.32 53.19 51.06 48.94 46.81 44.68 42.55 40.43 38.30 36.17 34.04 31.91 29.79 27.66 25.53 23.40 21.28 19.15 17.02 14.89 12.77 10.64 8.51 6.38 4.26 2.13 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
90
Inventories (# of Days) Held Countries
Value
Rank
Percentile
Indonesia Peru Philippines Hong Kong Canada China Brazil Chile Malaysia South Korea Russia USA Greece Singapore Spain Thailand Italy Netherlands South Africa Israel Germany the United Kingdom Switzerland Hungary Australia Poland Japan Sweden Taiwan Argentina Portugal Belgium France Norway Denmark India Austria Czech Republic Finland Luxembourg Ireland
302.82 226.31 108.44 98.85 80.05 76.67 75.75 72.08 68.93 57.06 51.42 47.13 45.88 44.69 43.99 40.94 39.08 38.63 38.10 36.28 35.26 34.17 33.57 30.88 29.55 28.73 27.98 26.26 24.23 22.59 21.44 20.91 19.83 18.54 15.73 13.01 11.50 9.38 5.42 2.19 0.47
1 3 6 7 9 10 11 12 13 14 16 17 18 19 20 21 22 23 24 25 26 28 29 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
97.92 93.75 87.50 85.42 81.25 79.17 77.08 75.00 72.92 70.83 66.67 64.58 62.50 60.42 58.33 56.25 54.17 52.08 50.00 47.92 45.83 41.67 39.58 35.42 33.33 31.25 29.17 27.08 25.00 22.92 20.83 18.75 16.67 14.58 12.50 10.42 8.33 6.25 4.17 2.08 0.00
Region
_________________________________________________________________________________________________________
Asia Latin America Asia Asia North America Asia Latin America Latin America Asia Asia Europe North America Europe Asia Europe Asia Europe Europe Africa the Middle East Europe Europe Europe Europe Oceana Europe Asia Europe Asia Latin America Europe Europe Europe Europe Europe Asia Europe Europe Europe Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
91
Inventories (# of Days) Held (Computer Programming Services) Countries in Europe
Value
Rank
Percentile
Albania Faroe Islands Estonia Belarus Slovakia Russia Lithuania Iceland Greece Spain Monaco Malta Isle of Man Slovenia Vatican City Italy Netherlands Germany the United Kingdom Switzerland Liechtenstein Hungary Poland Ukraine Gibraltar Sweden Georgia Moldova Kazakhstan Bulgaria Portugal Belgium Cyprus France Norway Denmark Austria San Marino Guernsey Jersey Czech Republic Latvia Croatia Finland Luxembourg Ireland
197.55 94.79 55.01 52.50 52.38 51.42 51.30 47.62 45.88 43.99 43.34 42.52 41.97 41.29 39.39 39.08 38.63 35.26 34.17 33.57 31.32 30.88 28.73 27.77 26.40 26.26 25.99 25.83 24.86 24.81 21.44 20.91 20.53 19.83 18.54 15.73 11.50 11.39 11.11 11.11 9.38 8.91 8.90 5.42 2.19 0.47
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46
97.83 95.65 93.48 91.30 89.13 86.96 84.78 82.61 80.43 78.26 76.09 73.91 71.74 69.57 67.39 65.22 63.04 60.87 58.70 56.52 54.35 52.17 50.00 47.83 45.65 43.48 41.30 39.13 36.96 34.78 32.61 30.43 28.26 26.09 23.91 21.74 19.57 17.39 15.22 13.04 10.87 8.70 6.52 4.35 2.17 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.6 3.6.1
92
PRODUCTIVITY IN CZECH REPUBLIC: ASSET-LABOR RATIOS Overview
In this chapter, we consider numerous asset-labor ratios for computer programming services in Czech Republic benchmarked against global averages. Productivity and utilization ratios are presented for companies oprating in Czech Republic and the average global benchmarks for computer programming services. For ratios where there are large deviations between Czech Republic and the benchmarks, graphics are provided (sometimes referred to as a “gap” analysis). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain asset-labor ratios are highlighted across countries in the comparison group. In the case of asset-labor ratios, this report maintains comparability over time and across countries by using a common currency (the US dollar) and relates each measure to a “per employee basis”. Ratios are projected using raw financial statistics and, as ratios, are therefore comparable. Given a country’s human resource ratios, the resulting figures are benchmarked across regional and global averages. We then report the larger asset-labor ratio gaps for computer programming services that Czech Republic has vis-à-vis the worldwide average. Again, a gap need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or signal a firm’s relative incentive to invest locally. All figures are projections, so due caution is required.
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.6.2
93
Asset to Labor: Outlook
The following tables and graphs are prepared using the methodology described at the beginning of this section. All units are in thousands of US dollars per employee. All figures are current-year projections for computer programming services in Czech Republic based on latest financial results available. Labor-asset Ratios ($k/employee) Czech Republic Europe World Avg. _________________________________________________________________________________________________________
Cash & Short Term Investments Cash Receivables (Net) Total Inventories Prepaid Expenses Other Current Assets Current Assets - Total Long Term Receivables Investments in Unconsolidated Subsidiaries Property Plant and Equipment - Net Property Plant and Equipment - Gross Land Buildings Machinery & Equipment Transportation Equipment Other Property Plant & Equipment Accumulated Depreciation - Total Accumulated Depreciation - Land Accumulated Depreciation - Buildings Accumulated Depreciation -Machinery & Equipment Accumulated Depreciation - Transportation Equipment Accumulated Depreciation - Other Prop & Equip Other Assets Intangible Other Assets Total Assets
25.22 33.10 17.38 0.83 2.14 0.18 44.68 3.31 5.87 41.27 103.95 3.66 75.04 11.94 4.00 9.31 43.16 0.17 27.53 9.97 2.14 3.35 1.57 0.88 92.10
56.60 43.92 191.72 12.86 2.22 22.75 151.09 3.26 25.15 225.89 355.84 4.94 28.27 296.87 41.07 30.31 153.58 0.27 5.17 12.19 1.41 11.11 33.90 17.21 616.54
43.32 20.78 50.67 14.02 1.39 13.57 107.54 2.60 24.03 118.23 235.10 2.43 17.43 143.89 17.20 14.59 99.39 0.01 1.93 4.73 0.66 3.95 29.10 13.99 302.73
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.6.3
94
Asset to Labor: International Gaps
The following graphics summarize for computer programming services the large labor-asset gaps between firms operating in Czech Republic and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.
Gap: Receivables (Net) ($k/employee) 191.72
200 150 100 50
50.67 17.38
0 -33.29
-50 Czech Republic
Europe
World Average
Gap
Gap: Current Assets - Total ($k/employee) 200
151.09
150 100 50
107.54 44.68
0 -50
-62.86
-100 Czech Republic
Europe
World Average
Gap
Gap: Investments in Unconsolidated Subsidiaries ($k/employee) 25.15
30
24.03
20 10
5.87
0 -10 -18.16
-20 Czech Republic
www.icongrouponline.com
Europe
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
95
Gap: Property Plant and Equipment - Net ($k/employee) 300
225.89
200 100
118.23 41.27
0 -76.96
-100 Czech Republic
Europe
World Average
Gap
Gap: Property Plant and Equipment - Gross ($k/employee) 355.84
400 300 200 100
235.1 103.95
0 -100
-131.15
-200 Czech Republic
Europe
World Average
Gap
Gap: Buildings ($k/employee) 80
75.04 57.61
60 40
28.27 17.43
20 0 Czech Republic
Europe
World Average
Gap
Gap: Machinery & Equipment ($k/employee) 296.87
300 200 100
143.89 11.94
0 -100
-131.95
-200 Czech Republic
www.icongrouponline.com
Europe
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
96
Gap: Accumulated Depreciation - Total ($k/employee) 200
153.58
150 100 50
99.39 43.16
0 -50
-56.23
-100 Czech Republic
Europe
World Average
Gap
Gap: Accumulated Depreciation - Buildings ($k/employee) 30
27.53
25.6
25 20 15 10
5.17
5
1.93
0 Czech Republic
Europe
World Average
Gap
Gap: Other Assets ($k/employee) 33.9
40
29.1
20 1.57 0 -20
-27.53
-40 Czech Republic
Europe
World Average
Gap
Gap: Total Assets ($k/employee) 800
616.54
600 302.73
400 92.1
200 0 -200
-210.63
-400 Czech Republic
www.icongrouponline.com
Europe
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
3.6.4
97
Key Percentiles and Rankings
We now consider the distribution of asset-labor ratios using ranks and percentiles across . What percent of countries have a productivity indicator lower or higher than Czech Republic (what is the indicator's rank or percentile)? The table below answers this question with respect to asset-labor structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance or productivity. After the summary table below, a few key asset-labor ratios are highlighted in additional tables. Asset Structure ($k/employee)
Czech Republic
Rank of Total
Percentile
25.22 33.10 17.38 0.83 2.14 0.18 44.68 3.31 5.87 41.27 103.95 3.66 75.04 11.94 4.00 9.31 43.16 0.17 27.53 9.97 2.14 3.35 1.57 0.88 92.10
25 of 53 16 of 50 45 of 53 47 of 49 12 of 39 45 of 47 44 of 52 17 of 41 18 of 43 25 of 53 17 of 50 14 of 30 4 of 47 31 of 45 13 of 41 28 of 50 11 of 48 3 of 8 1 of 40 19 of 39 8 of 35 30 of 44 50 of 53 39 of 44 42 of 53
52.83 68.00 15.09 4.08 69.23 4.26 15.38 58.54 58.14 52.83 66.00 53.33 91.49 31.11 68.29 44.00 77.08 62.50 97.50 51.28 77.14 31.82 5.66 11.36 20.75
_________________________________________________________________________________________________________
Cash & Short Term Investments Cash Receivables (Net) Total Inventories Prepaid Expenses Other Current Assets Current Assets - Total Long Term Receivables Investments in Unconsolidated Subsidiaries Property Plant and Equipment - Net Property Plant and Equipment - Gross Land Buildings Machinery & Equipment Transportation Equipment Other Property Plant & Equipment Accumulated Depreciation - Total Accumulated Depreciation - Land Accumulated Depreciation - Buildings Accumulated Depreciation -Machinery & Equipment Accumulated Depreciation - Transportation Equipment Accumulated Depreciation - Other Prop & Equip Other Assets Intangible Other Assets Total Assets
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
98
Cash & Short Term Investments Countries
Value ($K/employee)
Rank
Percentile
237.80 192.95 167.17 150.64 146.05 145.65 132.33 121.10 104.43 88.19 83.57 83.47 75.89 67.28 62.64 62.51 51.20 39.57 37.67 32.95 29.94 28.43 25.22 24.24 23.05 20.60 19.66 18.96 17.76 17.48 16.71 16.18 16.11 15.60 14.85 13.65 13.17 12.88 11.95 9.84 9.33 8.53 8.51 6.85 1.86
1 2 3 5 6 7 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 30 31 33 34 35 36 37 38 39 41 42 43 45 46 48 49 50 52 53
98.11 96.23 94.34 90.57 88.68 86.79 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 43.40 41.51 37.74 35.85 33.96 32.08 30.19 28.30 26.42 22.64 20.75 18.87 15.09 13.21 9.43 7.55 5.66 1.89 0.00
Region
_________________________________________________________________________________________________________
Israel Denmark South Korea Russia Turkey Mexico Hong Kong Japan Italy New Zealand USA Canada France Germany Greece China Sweden Singapore the United Kingdom Norway Australia Switzerland Czech Republic Thailand Belgium Ireland Pakistan Finland Malaysia Poland Taiwan Hungary Philippines Brazil Chile Indonesia South Africa Netherlands Austria Portugal Peru India Luxembourg Spain Argentina
the Middle East Europe Asia Europe the Middle East Latin America Asia Asia Europe Oceana North America North America Europe Europe Europe Asia Europe Asia Europe Europe Oceana Europe Europe Asia Europe Europe the Middle East Europe Asia Europe Asia Europe Asia Latin America Latin America Asia Africa Europe Europe Europe Latin America Asia Europe Europe Latin America
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
99
Cash & Short Term Investments (Computer Programming Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
192.95 161.16 153.81 153.46 150.64 150.29 138.77 127.35 126.90 123.77 119.39 105.27 104.43 91.33 84.43 75.89 67.28 62.64 58.06 57.29 51.20 38.37 37.67 32.95 28.43 26.53 25.22 23.94 23.93 23.05 20.60 18.96 17.48 16.18 15.71 15.12 15.09 14.55 13.83 13.62 12.88 11.95 11.84 11.54 11.54 9.84 9.41 8.51 8.14 6.85 6.44
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Denmark Estonia Belarus Slovakia Russia Lithuania Romania Bosnia & Herzegovina Faroe Islands Macedonia Serbia & Montenegro Vatican City Italy Andorra Iceland France Germany Greece Malta Isle of Man Sweden Monaco the United Kingdom Norway Switzerland Liechtenstein Czech Republic Latvia Croatia Belgium Ireland Finland Poland Hungary Moldova Kazakhstan Bulgaria Ukraine Gibraltar Georgia Netherlands Austria San Marino Guernsey Jersey Portugal Cyprus Luxembourg Albania Spain Slovenia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
100
Receivables (Net) Countries
Value ($K/employee)
Rank
Percentile
2971.78 335.59 192.56 192.03 181.46 173.99 161.26 135.14 121.77 116.46 101.46 90.98 81.45 81.30 73.52 69.32 68.79 67.26 63.57 61.75 56.67 53.72 53.20 50.78 50.30 50.13 49.51 49.40 44.27 43.21 42.07 41.17 32.64 32.59 31.63 28.53 26.29 23.62 19.04 17.38 12.71 12.69 9.92 9.44 9.00
1 2 3 4 5 7 8 9 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 34 35 37 38 39 40 41 42 44 45 46 47 49 50 51
98.11 96.23 94.34 92.45 90.57 86.79 84.91 83.02 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 35.85 33.96 30.19 28.30 26.42 24.53 22.64 20.75 16.98 15.09 13.21 11.32 7.55 5.66 3.77
Region
_________________________________________________________________________________________________________
Portugal Ireland Turkey Mexico Taiwan Denmark Greece South Korea Russia Italy Germany Finland Japan Pakistan Israel Argentina Hong Kong Spain Belgium France Hungary China the United Kingdom Australia Thailand USA Singapore Malaysia Switzerland Canada Austria Norway Poland Sweden Netherlands New Zealand Peru South Africa Luxembourg Czech Republic India Philippines Brazil Chile Indonesia
Europe Europe the Middle East Latin America Asia Europe Europe Asia Europe Europe Europe Europe Asia the Middle East the Middle East Latin America Asia Europe Europe Europe Europe Asia Europe Oceana Asia North America Asia Asia Europe North America Europe Europe Europe Europe Europe Oceana Latin America Africa Europe Europe Asia Asia Latin America Latin America Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
101
Receivables (Net) (Computer Programming Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
2971.78 2844.66 335.59 182.95 173.99 167.90 163.17 161.26 157.40 149.46 147.50 130.28 124.34 124.05 121.77 121.49 117.40 116.46 101.46 90.98 67.26 65.97 63.57 63.15 61.75 56.67 53.20 50.96 50.65 48.45 48.01 47.70 44.27 42.07 41.67 41.31 41.17 40.62 40.62 32.64 32.59 31.63 29.54 29.35 28.24 28.19 22.95 19.04 17.38 16.50 16.49
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Portugal Cyprus Ireland Romania Denmark Bosnia & Herzegovina Macedonia Greece Serbia & Montenegro Malta Isle of Man Estonia Belarus Slovakia Russia Lithuania Vatican City Italy Germany Finland Spain Faroe Islands Belgium Slovenia France Hungary the United Kingdom Ukraine Iceland Gibraltar Monaco Georgia Switzerland Austria San Marino Liechtenstein Norway Jersey Guernsey Poland Sweden Netherlands Andorra Moldova Kazakhstan Bulgaria Albania Luxembourg Czech Republic Latvia Croatia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
102
Total Inventories Countries
Value ($K/employee)
Rank
Percentile
68.36 52.09 46.94 32.32 32.17 29.38 16.02 15.13 12.98 12.92 12.66 12.50 12.30 11.95 11.35 9.93 9.88 9.58 9.13 8.11 7.98 7.93 7.91 6.73 6.09 6.02 5.94 5.50 5.48 5.36 5.26 4.57 4.35 4.12 3.78 3.35 1.83 1.51 1.13 0.83 0.52 0.47
1 2 5 6 7 8 9 10 11 12 13 14 15 16 17 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 37 39 41 42 44 45 46 47 48 49
97.96 95.92 89.80 87.76 85.71 83.67 81.63 79.59 77.55 75.51 73.47 71.43 69.39 67.35 65.31 61.22 59.18 57.14 55.10 53.06 51.02 48.98 46.94 44.90 42.86 40.82 38.78 36.73 34.69 32.65 30.61 28.57 24.49 20.41 16.33 14.29 10.20 8.16 6.12 4.08 2.04 0.00
Region
_________________________________________________________________________________________________________
Peru South Korea Russia Greece China Taiwan Switzerland Japan Spain Brazil Philippines Hungary Chile Canada Germany Italy Singapore Norway France Belgium Hong Kong Sweden South Africa Portugal Austria USA Netherlands the United Kingdom Denmark Thailand Argentina Australia Indonesia Malaysia Poland Pakistan Finland Ireland Israel Czech Republic Luxembourg India
Latin America Asia Europe Europe Asia Asia Europe Asia Europe Latin America Asia Europe Latin America North America Europe Europe Asia Europe Europe Europe Asia Europe Africa Europe Europe North America Europe Europe Europe Asia Latin America Oceana Asia Asia Europe the Middle East Europe Europe the Middle East Europe Europe Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
103
Total Inventories (Computer Programming Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
59.67 50.21 47.93 47.82 46.94 46.83 32.32 29.96 29.56 16.02 14.95 12.98 12.50 12.19 11.35 11.24 10.69 10.52 10.01 9.93 9.58 9.58 9.13 8.11 7.93 7.65 6.73 6.45 6.09 6.08 6.03 5.94 5.88 5.88 5.50 5.48 3.78 3.40 3.27 3.26 1.83 1.51 0.83 0.78 0.78 0.52
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46
97.83 95.65 93.48 91.30 89.13 86.96 84.78 82.61 80.43 78.26 76.09 73.91 71.74 69.57 67.39 65.22 63.04 60.87 58.70 56.52 54.35 52.17 50.00 47.83 45.65 43.48 41.30 39.13 36.96 34.78 32.61 30.43 28.26 26.09 23.91 21.74 19.57 17.39 15.22 13.04 10.87 8.70 6.52 4.35 2.17 0.00
_________________________________________________________________________________________________________
Albania Estonia Belarus Slovakia Russia Lithuania Greece Malta Isle of Man Switzerland Liechtenstein Spain Hungary Slovenia Germany Ukraine Gibraltar Georgia Vatican City Italy Norway Monaco France Belgium Sweden Faroe Islands Portugal Cyprus Austria Iceland San Marino Netherlands Jersey Guernsey the United Kingdom Denmark Poland Moldova Kazakhstan Bulgaria Finland Ireland Czech Republic Latvia Croatia Luxembourg
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
104
Current Assets - Total Countries
Value ($K/employee)
Rank
Percentile
449.65 405.19 369.25 368.25 313.31 270.84 234.10 233.84 207.13 189.82 160.04 156.38 148.20 147.59 143.65 136.40 124.34 116.72 105.21 103.14 101.83 100.50 98.58 96.82 95.34 88.65 88.64 88.18 85.78 77.21 72.34 67.42 66.70 59.99 55.89 52.05 45.08 44.94 44.68 38.96 37.07 29.55 27.43 24.66
1 3 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 33 34 35 36 37 38 39 42 43 44 45 47 48 49 51
98.08 94.23 92.31 90.38 86.54 84.62 82.69 80.77 78.85 76.92 75.00 73.08 71.15 69.23 67.31 65.38 63.46 61.54 59.62 57.69 55.77 53.85 51.92 50.00 48.08 46.15 44.23 42.31 40.38 36.54 34.62 32.69 30.77 28.85 26.92 25.00 19.23 17.31 15.38 13.46 9.62 7.69 5.77 1.92
Region
_________________________________________________________________________________________________________
South Korea Russia Turkey Mexico Israel Taiwan Italy Greece Japan Hong Kong Denmark China USA France Canada Germany Switzerland New Zealand Peru Finland the United Kingdom Singapore Sweden Belgium Hungary Australia Spain Norway Malaysia Argentina Portugal Ireland Austria Thailand Poland Netherlands Philippines South Africa Czech Republic Brazil Chile Luxembourg Indonesia India
Asia Europe the Middle East Latin America the Middle East Asia Europe Europe Asia Asia Europe Asia North America Europe North America Europe Europe Oceana Latin America Europe Europe Asia Europe Europe Europe Oceana Europe Europe Asia Latin America Europe Europe Europe Asia Europe Europe Asia Africa Europe Latin America Latin America Europe Asia Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
105
Current Assets - Total (Computer Programming Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
433.48 413.72 412.77 405.19 404.24 350.84 321.96 312.91 301.84 236.00 234.10 233.84 216.73 213.88 182.02 160.04 149.72 147.59 136.40 124.34 120.87 116.03 103.14 101.83 98.58 97.46 96.82 95.34 91.84 88.64 88.18 85.74 83.22 81.52 80.26 72.34 69.25 67.42 66.70 66.07 64.41 64.41 55.89 52.05 50.25 48.35 48.27 44.68 42.41 42.39 29.55
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Estonia Belarus Slovakia Russia Lithuania Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Vatican City Italy Greece Malta Isle of Man Faroe Islands Denmark Iceland France Germany Switzerland Andorra Liechtenstein Finland the United Kingdom Sweden Monaco Belgium Hungary Albania Spain Norway Ukraine Slovenia Gibraltar Georgia Portugal Cyprus Ireland Austria San Marino Jersey Guernsey Poland Netherlands Moldova Kazakhstan Bulgaria Czech Republic Latvia Croatia Luxembourg
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
106
Property Plant and Equipment - Net Countries
Value ($K/employee)
Rank
Percentile
1679.34 1280.12 1276.63 752.97 621.85 243.70 242.25 140.28 119.37 92.24 87.46 80.58 69.72 64.55 54.07 51.64 47.38 45.65 44.20 44.19 41.27 39.83 38.55 36.33 35.95 35.66 34.79 26.75 26.16 25.88 24.67 23.82 23.79 19.11 17.82 17.64 16.60 11.51 11.23 10.80 10.22 9.65 9.18 7.77 7.51
1 2 3 5 6 7 8 9 10 11 12 13 16 17 18 19 21 22 23 24 25 27 28 29 30 31 32 34 35 36 37 38 39 40 41 42 44 46 47 48 49 50 51 52 53
98.11 96.23 94.34 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 69.81 67.92 66.04 64.15 60.38 58.49 56.60 54.72 52.83 49.06 47.17 45.28 43.40 41.51 39.62 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 16.98 13.21 11.32 9.43 7.55 5.66 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Italy Turkey Mexico Greece Pakistan Hong Kong Japan France Taiwan Thailand Australia USA Peru Argentina the United Kingdom China Switzerland Germany South Korea Denmark Czech Republic Russia Finland Philippines Singapore New Zealand Ireland Norway Portugal Canada Israel Malaysia Hungary Luxembourg Belgium Indonesia Spain Sweden Poland Netherlands India Brazil Chile South Africa Austria
Europe the Middle East Latin America Europe the Middle East Asia Asia Europe Asia Asia Oceana North America Latin America Latin America Europe Asia Europe Europe Asia Europe Europe Europe Europe Asia Asia Oceana Europe Europe Europe North America the Middle East Asia Europe Europe Europe Asia Europe Europe Europe Europe Asia Latin America Latin America Africa Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
107
Property Plant and Equipment - Net (Computer Programming Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
1692.92 1679.34 1216.29 1116.18 1084.79 1046.42 752.97 697.87 688.69 233.68 140.28 81.41 60.86 54.07 47.38 45.65 44.21 44.19 42.61 41.27 40.67 40.58 39.83 39.74 39.17 39.15 38.55 36.93 34.86 34.79 26.75 26.16 25.04 23.79 21.39 20.34 20.03 19.11 17.82 16.60 15.58 11.51 11.23 10.80 10.10 9.72 9.70 7.51 7.44 7.25 7.25
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Vatican City Italy Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Greece Malta Isle of Man Faroe Islands France Iceland Albania the United Kingdom Switzerland Germany Liechtenstein Denmark Estonia Czech Republic Belarus Slovakia Russia Lithuania Latvia Croatia Finland Andorra Monaco Ireland Norway Portugal Cyprus Hungary Ukraine Gibraltar Georgia Luxembourg Belgium Spain Slovenia Sweden Poland Netherlands Moldova Kazakhstan Bulgaria Austria San Marino Jersey Guernsey
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
108
Accumulated Depreciation - Total Countries
Value ($K/employee)
Rank
Percentile
1191.48 1061.43 1058.54 599.21 411.73 158.32 66.34 57.93 46.38 43.16 41.83 41.73 37.79 34.17 33.56 30.24 29.47 25.38 24.26 22.86 21.72 20.41 20.14 20.01 18.36 17.30 16.95 16.46 14.44 14.24 14.19 12.03 11.80 10.55 9.45 8.99 8.87 7.18 5.84 4.47
1 2 3 5 6 7 8 9 10 11 12 13 15 17 18 21 22 23 25 26 27 28 29 30 32 33 34 35 36 38 39 40 41 42 43 44 45 46 47 48
97.92 95.83 93.75 89.58 87.50 85.42 83.33 81.25 79.17 77.08 75.00 72.92 68.75 64.58 62.50 56.25 54.17 52.08 47.92 45.83 43.75 41.67 39.58 37.50 33.33 31.25 29.17 27.08 25.00 20.83 18.75 16.67 14.58 12.50 10.42 8.33 6.25 4.17 2.08 0.00
Region
_________________________________________________________________________________________________________
Pakistan Turkey Mexico Greece Japan Hong Kong Switzerland France Thailand Czech Republic Peru Finland USA Italy South Korea Russia Philippines China the United Kingdom Germany Canada Singapore Belgium Indonesia Malaysia Spain Australia New Zealand Sweden Israel Netherlands Ireland Norway Denmark Brazil Chile Portugal Poland India South Africa
the Middle East the Middle East Latin America Europe Asia Asia Europe Europe Asia Europe Latin America Europe North America Europe Asia Europe Asia Asia Europe Europe North America Asia Europe Asia Asia Europe Oceana Oceana Europe the Middle East Europe Europe Europe Europe Latin America Latin America Europe Europe Asia Africa
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
109
Accumulated Depreciation - Total (Computer Programming Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
1008.50 925.50 899.47 867.66 599.21 555.37 548.06 151.81 66.34 61.90 57.93 43.16 41.73 40.97 40.95 38.18 36.52 34.45 34.17 32.36 30.88 30.81 30.24 30.17 24.26 22.86 20.14 19.79 17.30 17.05 16.24 14.44 14.19 12.03 11.80 10.55 8.87 8.49 7.18 6.46 6.21 6.20
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42
97.62 95.24 92.86 90.48 88.10 85.71 83.33 80.95 78.57 76.19 73.81 71.43 69.05 66.67 64.29 61.90 59.52 57.14 54.76 52.38 50.00 47.62 45.24 42.86 40.48 38.10 35.71 33.33 30.95 28.57 26.19 23.81 21.43 19.05 16.67 14.29 11.90 9.52 7.14 4.76 2.38 0.00
_________________________________________________________________________________________________________
Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Greece Malta Isle of Man Faroe Islands Switzerland Liechtenstein France Czech Republic Finland Latvia Croatia Iceland Albania Vatican City Italy Estonia Belarus Slovakia Russia Lithuania the United Kingdom Germany Belgium Monaco Spain Andorra Slovenia Sweden Netherlands Ireland Norway Denmark Portugal Cyprus Poland Moldova Kazakhstan Bulgaria
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
110
Intangible Other Assets Countries
Value ($K/employee)
Rank
Percentile
76.43 64.44 54.03 47.98 43.66 42.26 38.82 38.08 37.01 32.99 29.70 28.25 27.55 26.65 25.44 25.44 23.03 22.87 21.09 19.03 18.81 15.02 14.31 14.17 11.69 11.19 11.01 8.08 7.44 7.32 5.63 5.48 5.43 4.93 3.80 0.90 0.88 0.76 0.76
1 2 3 4 5 6 7 9 10 11 12 13 14 15 16 17 18 19 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41
97.73 95.45 93.18 90.91 88.64 86.36 84.09 79.55 77.27 75.00 72.73 70.45 68.18 65.91 63.64 61.36 59.09 56.82 52.27 50.00 47.73 45.45 43.18 40.91 38.64 36.36 34.09 31.82 29.55 27.27 25.00 22.73 20.45 18.18 15.91 13.64 11.36 9.09 6.82
Region
_________________________________________________________________________________________________________
Canada Israel Belgium USA the United Kingdom South Korea Australia Russia Italy Argentina Germany Ireland France Japan Spain Philippines Hong Kong Sweden Luxembourg China Norway Finland Austria Switzerland Portugal Netherlands Hungary Poland Denmark Singapore Greece New Zealand India Malaysia South Africa Thailand Czech Republic Turkey Mexico
North America the Middle East Europe North America Europe Asia Oceana Europe Europe Latin America Europe Europe Europe Asia Europe Asia Asia Europe Europe Asia Europe Europe Europe Europe Europe Europe Europe Europe Europe Asia Europe Oceana Asia Asia Africa Asia Europe the Middle East Latin America
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
111
Intangible Other Assets (Computer Programming Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
54.03 48.47 43.66 40.74 38.89 38.80 38.08 37.99 37.31 37.01 29.70 28.25 27.55 25.44 23.88 22.87 22.09 21.09 18.81 15.02 14.31 14.17 14.17 13.82 13.82 13.23 11.69 11.19 11.19 11.01 9.90 9.41 9.27 8.08 7.44 7.26 7.10 6.99 6.97 5.67 5.63 5.22 5.15 0.88 0.84 0.84 0.72 0.66 0.64 0.62
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50
98.00 96.00 94.00 92.00 90.00 88.00 86.00 84.00 82.00 80.00 78.00 76.00 74.00 72.00 70.00 68.00 66.00 64.00 62.00 60.00 58.00 56.00 54.00 52.00 50.00 48.00 46.00 44.00 42.00 40.00 38.00 36.00 34.00 32.00 30.00 28.00 26.00 24.00 22.00 20.00 18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00
_________________________________________________________________________________________________________
Belgium Iceland the United Kingdom Estonia Belarus Slovakia Russia Lithuania Vatican City Italy Germany Ireland France Spain Slovenia Sweden Faroe Islands Luxembourg Norway Finland Austria Switzerland San Marino Guernsey Jersey Liechtenstein Portugal Netherlands Cyprus Hungary Ukraine Gibraltar Georgia Poland Denmark Moldova Monaco Kazakhstan Bulgaria Andorra Greece Malta Isle of Man Czech Republic Latvia Croatia Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.7 3.7.1
112
PRODUCTIVITY IN CZECH REPUBLIC: LIABILITY-LABOR RATIOS Overview
In this chapter we consider the liability-labor ratios of companies operating in Czech Republic benchmarked against global averages for computer programming services. For ratios where there are large deviations between Czech Republic and the benchmarks, graphics are provided (sometimes referred to as a “gap” analysis). Then the distribution of productivity ratios is presented in the form of ranks and percentiles. Certain key liability-labor ratios are highlighted for computer programming services across countries in the comparison group. Definitions of liability statement terms are given in Chapter 3. In the case of liability-labor ratios, this report maintains comparability over time and across countries by using a common currency (the US dollar) and relates each measure to a “per employee basis”. Ratios are projected using raw financial statistics and, as ratios, are therefore comparable. Given a country’s human resource ratios, the resulting figures are benchmarked across regional and global averages. I then report the larger liability-labor ratio gaps for computer programming services that Czech Republic has vis-àvis the worldwide average. Again, a gap need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or signal a firm’s relative incentive to invest locally. All figures are projections, so due caution is required.
3.7.2
Liability to Labor: Outlook
The following tables and graphs are prepared using the methodology described at the beginning of this section. All units are in thousands of US dollars per employee. All figures are current-year projections for computer programming services in Czech Republic based on latest financial results available. Labor-liability Ratios ($k/employee) Czech Republic Europe World Avg. _________________________________________________________________________________________________________
Short Term Debt & Current Portion of Long Term Debt Other Current Liabilities Current Liabilities - Total Provision For Risks and Charges Deferred Income Other Liabilities Total Liabilities Common Equity Common Stock Other Appropriated Reserves Unappropriated Reserves Retained Earnings Treasury Stock Total Liabilities & Shareholders Equity
1.32 43.35 26.80 10.34 3.78 0.11 33.98 58.13 21.18 20.97 16.19 11.24 0.49 92.10
160.76 48.20 86.35 8.98 3.12 40.18 433.23 183.94 62.94 20.77 11.98 33.84 3.38 616.54
61.14 27.40 64.32 2.99 1.19 19.63 175.73 116.84 50.88 8.23 8.63 16.79 2.68 302.73
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.7.3
113
Liability and Equity to Labor: International Gaps
The following graphics summarize for computer programming services the large labor-liability gaps between firms operating in Czech Republic and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.
Gap: Short Term Debt & Current Portion of Long Term Debt ($k/employee) 200
160.76
150 100
61.14
50
1.32
0 -50
-59.82
-100 Czech Republic
Europe
World Average
Gap
Gap: Other Current Liabilities ($k/employee) 50
43.35
48.2
40 27.4
30
15.95
20 10 0 Czech Republic
Europe
World Average
Gap
Gap: Current Liabilities - Total ($k/employee) 86.35
100
64.32 50
26.8
0 -37.52
-50 Czech Republic
www.icongrouponline.com
Europe
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
114
Gap: Provision For Risks and Charges ($k/employee) 12
10.34
8.98
10
7.35
8 6 2.99
4 2 0 Czech Republic
Europe
World Average
Gap
Gap: Other Liabilities ($k/employee) 50 40 30 20 10 0 -10 -20
40.18 19.63 0.11
Czech Republic
Europe
-19.52 Gap
World Average
Gap: Total Liabilities ($k/employee) 500 400 300 200 100 0 -100 -200
433.23 175.73 33.98 -141.75 Czech Republic
Europe
World Average
Gap
Gap: Common Equity ($k/employee) 183.94
200 150 100
116.84 58.13
50 0 -50
-58.71
-100 Czech Republic
www.icongrouponline.com
Europe
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
115
Gap: Common Stock ($k/employee) 80
62.94
60 40
50.88
21.18
20 0 -20
-29.7
-40 Czech Republic
Europe
World Average
Gap
Gap: Other Appropriated Reserves ($k/employee) 25
20.97
20.77
20 12.74
15 8.23
10 5 0 Czech Republic
Europe
World Average
Gap
Gap: Unappropriated Reserves ($k/employee) 20
16.19
15
11.98 8.63
10
7.56
5 0 Czech Republic
Europe
World Average
Gap
Gap: Total Liabilities & Shareholders Equity ($k/employee) 800
616.54
600 302.73
400 92.1
200 0 -200
-210.63
-400 Czech Republic
www.icongrouponline.com
Europe
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
3.7.4
116
Key Percentiles and Rankings
We now consider the distribution of liability-labor ratios using ranks and percentiles across . What percent of countries have a value lower or higher than Czech Republic (what is the indicator's rank or percentile)? The table below answers this question with respect to liability-labor ratios. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance or productivity. After the summary table below, a few key liabilitylabor ratios are highlighted in additional tables. Liability Structure ($k/employee)
Czech Republic
Rank of Total
Percentile
1.32 43.35 26.80 10.34 3.78 0.11 33.98 58.13 21.18 20.97 16.19 11.24 0.49 92.10
47 of 52 12 of 52 44 of 52 9 of 33 9 of 21 45 of 48 46 of 53 40 of 53 35 of 50 11 of 50 13 of 33 32 of 51 15 of 22 42 of 53
9.62 76.92 15.38 72.73 57.14 6.25 13.21 24.53 30.00 78.00 60.61 37.25 31.82 20.75
_________________________________________________________________________________________________________
Short Term Debt & Current Portion of Long Term Debt Other Current Liabilities Current Liabilities - Total Provision For Risks and Charges Deferred Income Other Liabilities Total Liabilities Common Equity Common Stock Other Appropriated Reserves Unappropriated Reserves Retained Earnings Treasury Stock Total Liabilities & Shareholders Equity
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
117
Current Liabilities - Total Countries
Value ($K/employee)
Rank
Percentile
256.43 253.01 252.32 231.07 210.91 147.37 110.01 97.29 89.81 80.58 80.51 80.36 72.71 70.33 68.35 67.81 67.78 63.86 61.07 59.36 52.32 51.76 50.07 47.69 47.16 47.08 45.62 43.91 43.56 42.94 36.77 34.19 34.19 30.73 29.80 27.71 27.60 27.32 26.80 26.36 23.86 11.25 9.07 8.27
1 2 3 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 23 24 25 26 27 28 29 30 31 32 33 34 35 36 38 39 41 42 43 44 45 46 48 49 50
98.08 96.15 94.23 88.46 86.54 84.62 82.69 80.77 78.85 76.92 75.00 73.08 71.15 69.23 67.31 65.38 63.46 61.54 59.62 55.77 53.85 51.92 50.00 48.08 46.15 44.23 42.31 40.38 38.46 36.54 34.62 32.69 30.77 26.92 25.00 21.15 19.23 17.31 15.38 13.46 11.54 7.69 5.77 3.85
Region
_________________________________________________________________________________________________________
South Korea Turkey Mexico Russia Taiwan Greece China Italy Japan France Israel Peru Spain Belgium Argentina the United Kingdom Hong Kong Finland USA Switzerland Portugal Austria Hungary Australia Sweden Canada Singapore Malaysia Germany Norway Thailand Denmark Poland South Africa Ireland Brazil Netherlands Philippines Czech Republic Chile Luxembourg New Zealand India Indonesia
Asia the Middle East Latin America Europe Asia Europe Asia Europe Asia Europe the Middle East Latin America Europe Europe Latin America Europe Asia Europe North America Europe Europe Europe Europe Oceana Europe North America Asia Asia Europe Europe Asia Europe Europe Africa Europe Latin America Europe Asia Europe Latin America Europe Oceana Asia Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
118
Current Liabilities - Total (Computer Programming Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
247.20 240.39 235.93 235.39 231.07 230.53 220.61 214.40 206.82 147.37 136.59 134.79 98.08 97.29 80.58 72.71 70.33 70.14 68.26 67.81 65.00 63.86 61.70 59.36 55.40 52.32 51.76 51.27 50.09 50.07 49.98 49.98 47.16 45.02 44.24 43.56 42.94 42.81 42.15 34.19 34.19 30.74 29.80 29.58 29.52 27.60 26.80 25.44 25.43 23.86 11.65
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Estonia Romania Belarus Slovakia Russia Lithuania Bosnia & Herzegovina Macedonia Serbia & Montenegro Greece Malta Isle of Man Vatican City Italy France Spain Belgium Albania Slovenia the United Kingdom Faroe Islands Finland Iceland Switzerland Liechtenstein Portugal Austria San Marino Cyprus Hungary Guernsey Jersey Sweden Ukraine Monaco Germany Norway Gibraltar Georgia Denmark Poland Moldova Ireland Kazakhstan Bulgaria Netherlands Czech Republic Latvia Croatia Luxembourg Andorra
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
119
Total Liabilities Countries
Value ($K/employee)
Rank
Percentile
3388.16 2074.26 1427.76 1423.87 1074.20 659.02 471.27 461.41 342.82 283.29 255.28 233.01 207.99 144.42 135.91 122.90 120.03 118.49 118.03 109.29 95.51 93.87 93.10 87.79 87.32 76.82 76.23 61.37 60.28 58.33 56.40 54.11 50.95 48.48 48.46 39.21 36.74 36.67 36.14 35.46 33.98 33.74 30.88 14.41 9.44
1 2 3 4 6 7 8 9 10 11 13 14 15 16 17 18 19 20 21 22 25 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 49 50 53
98.11 96.23 94.34 92.45 88.68 86.79 84.91 83.02 81.13 79.25 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 52.83 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 11.32 7.55 5.66 0.00
Region
_________________________________________________________________________________________________________
Portugal Italy Turkey Mexico Denmark Pakistan Japan Greece Ireland South Korea Russia Taiwan France USA Peru Thailand the United Kingdom China Germany Hong Kong Spain Argentina Belgium Australia Israel Finland Switzerland Norway Austria Canada Sweden Singapore Hungary Poland Malaysia Philippines Luxembourg Netherlands South Africa Brazil Czech Republic Chile New Zealand Indonesia India
Europe Europe the Middle East Latin America Europe the Middle East Asia Europe Europe Asia Europe Asia Europe North America Latin America Asia Europe Asia Europe Asia Europe Latin America Europe Oceana the Middle East Europe Europe Europe Europe North America Europe Asia Europe Europe Asia Asia Europe Europe Africa Latin America Europe Latin America Oceana Asia Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
120
Total Liabilities (Computer Programming Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
3388.16 3243.22 2091.04 2074.26 1356.56 1244.91 1209.90 1167.10 1074.20 461.41 427.65 422.02 342.82 273.10 260.65 260.06 255.28 254.69 207.99 145.91 120.03 118.64 118.03 104.80 95.51 93.10 89.66 76.82 76.23 71.13 61.37 60.28 59.71 58.22 58.22 56.40 52.48 50.95 48.48 45.81 43.59 43.56 42.89 41.95 41.87 36.74 36.67 33.98 32.25 32.24 31.98
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Portugal Cyprus Vatican City Italy Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Denmark Greece Malta Isle of Man Ireland Estonia Belarus Slovakia Russia Lithuania France Iceland the United Kingdom Albania Germany Faroe Islands Spain Belgium Slovenia Finland Switzerland Liechtenstein Norway Austria San Marino Jersey Guernsey Sweden Monaco Hungary Poland Ukraine Moldova Gibraltar Georgia Kazakhstan Bulgaria Luxembourg Netherlands Czech Republic Latvia Croatia Andorra
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
121
Common Equity Countries
Value ($K/employee)
Rank
Percentile
565.29 509.32 460.40 459.14 446.53 405.87 367.83 331.46 275.05 271.02 231.33 206.12 191.46 191.23 169.36 161.58 148.89 148.15 145.56 124.17 116.27 112.97 95.62 95.16 87.45 82.94 82.76 82.24 80.45 77.78 70.09 69.00 66.63 61.33 58.13 46.57 38.56 38.10 37.13 37.12 34.14 28.96 22.37 17.50 16.65
1 2 3 4 5 7 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 34 35 37 38 40 41 43 44 45 46 48 49 51 52 53
98.11 96.23 94.34 92.45 90.57 86.79 84.91 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 35.85 33.96 30.19 28.30 24.53 22.64 18.87 16.98 15.09 13.21 9.43 7.55 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Greece Portugal Turkey Mexico Israel Hong Kong South Korea Russia Denmark Pakistan Italy Taiwan Canada Japan USA Australia New Zealand Germany China France Ireland Switzerland the United Kingdom Singapore Thailand Malaysia Belgium Finland Sweden Hungary Philippines Norway Argentina Peru Czech Republic Spain Netherlands Poland India Indonesia Luxembourg Austria South Africa Brazil Chile
Europe Europe the Middle East Latin America the Middle East Asia Asia Europe Europe the Middle East Europe Asia North America Asia North America Oceana Oceana Europe Asia Europe Europe Europe Europe Asia Asia Asia Europe Europe Europe Europe Asia Europe Latin America Latin America Europe Europe Europe Europe Asia Asia Europe Europe Africa Latin America Latin America
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
122
Common Equity (Computer Programming Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
565.29 523.93 517.03 509.32 487.54 437.44 401.44 390.15 389.19 376.35 354.60 338.43 337.66 331.46 330.68 275.05 233.20 231.33 171.09 154.19 148.15 124.17 116.27 112.97 105.42 95.62 92.28 82.76 82.24 80.45 77.78 69.94 69.00 66.50 65.48 58.13 55.17 55.15 53.53 46.57 43.72 38.56 38.10 34.26 34.14 32.97 32.91 28.96 28.68 27.96 27.96
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Greece Malta Isle of Man Portugal Cyprus Romania Bosnia & Herzegovina Macedonia Faroe Islands Serbia & Montenegro Estonia Belarus Slovakia Russia Lithuania Denmark Vatican City Italy Iceland Andorra Germany France Ireland Switzerland Liechtenstein the United Kingdom Monaco Belgium Finland Sweden Hungary Ukraine Norway Gibraltar Georgia Czech Republic Latvia Croatia Albania Spain Slovenia Netherlands Poland Moldova Luxembourg Kazakhstan Bulgaria Austria San Marino Jersey Guernsey
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
123
Retained Earnings Countries
Value ($K/employee)
Rank
Percentile
290.98 240.17 122.69 122.35 75.52 68.22 62.95 57.10 51.44 45.59 43.69 36.55 35.38 31.48 30.05 28.12 27.08 27.03 26.98 26.90 26.49 25.96 22.81 18.97 17.67 15.64 15.12 13.04 11.71 11.24 10.63 10.22 9.99 9.56 8.76 7.60 6.59 6.36 6.30 2.54 1.35 0.54 0.01
1 2 3 4 6 7 8 9 10 11 12 13 14 15 16 17 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 38 40 42 43 44 47 48 49 51
98.04 96.08 94.12 92.16 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 25.49 21.57 17.65 15.69 13.73 7.84 5.88 3.92 0.00
Region
_________________________________________________________________________________________________________
Hong Kong Israel Turkey Mexico Portugal Japan USA Denmark France Canada Switzerland Taiwan Finland New Zealand South Korea the United Kingdom Russia Norway Italy Germany Singapore Ireland Belgium Netherlands Australia Malaysia Spain South Africa Sweden Czech Republic Thailand Argentina Poland Greece Philippines India Austria Indonesia Luxembourg Hungary China Peru Pakistan
Asia the Middle East the Middle East Latin America Europe Asia North America Europe Europe North America Europe Asia Europe Oceana Asia Europe Europe Europe Europe Europe Asia Europe Europe Europe Oceana Asia Europe Africa Europe Europe Asia Latin America Europe Europe Asia Asia Europe Asia Europe Europe Asia Latin America the Middle East
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
124
Retained Earnings (Computer Programming Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
279.02 116.57 106.98 103.97 100.29 75.52 72.29 63.60 57.10 51.44 43.69 40.77 35.38 32.60 28.97 28.12 27.65 27.58 27.20 27.08 27.03 27.01 26.98 26.90 25.96 25.69 22.81 18.97 15.12 14.20 11.71 11.24 10.67 10.66 9.99 9.56 8.98 8.86 8.74 8.65 8.63 6.59 6.53 6.36 6.36 6.30 2.54 2.29 2.17 2.14 0.47
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Faroe Islands Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Portugal Cyprus Iceland Denmark France Switzerland Liechtenstein Finland Andorra Estonia the United Kingdom Belarus Slovakia Vatican City Russia Norway Lithuania Italy Germany Ireland Monaco Belgium Netherlands Spain Slovenia Sweden Czech Republic Latvia Croatia Poland Greece Moldova Malta Isle of Man Kazakhstan Bulgaria Austria San Marino Guernsey Jersey Luxembourg Hungary Ukraine Gibraltar Georgia Albania
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.8 3.8.1
125
PRODUCTIVITY IN CZECH REPUBLIC: INCOME-LABOR RATIOS Overview
In this chapter we consider the income-labor ratios for computer programming services in Czech Republic benchmarked against global averages. For ratios where there are large deviations between the average firm operating in Czech Republic and the benchmarks, graphics are provided (sometimes referred to as a “gap” analysis). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key income-labor ratios are highlighted across countries in the comparison group. In the case of income-labor ratios, this report maintains comparability over time and across countries by using a common currency (the US dollar) and relates each measure to a “per employee basis”. Ratios are projected using raw financial statistics and, as ratios, are therefore comparable. Given a country’s human resource ratios, the resulting figures are benchmarked across regional and global averages. We then report the larger income-labor ratio gaps for computer programming services that Czech Republic has vis-àvis the worldwide average. Again, a gap need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or signal a firm’s relative incentive to invest locally. All figures are projections, so due caution is required.
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.8.2
126
Income to Labor: Outlook
The following tables and graphs are prepared using the methodology described at the beginning of this section. All units are in thousands of US dollars per employee. All figures are current-year projections for computer programming services in Czech Republic based on latest financial results available. Labor-income Ratios ($k/employee) Czech Republic Europe World Avg. _________________________________________________________________________________________________________
Net Sales or Revenues Cost of Goods Sold (Excluding Depreciation) Depreciation, Depletion & Amortization Gross Income Other Operating Expenses Operating Expenses - Total Operating Income Extraordinary Credit - Pretax Extraordinary Charge - Pretax Non-Operating Interest Income Other Income/Expense Net Earnings Before Interest and Taxes (EBIT) Interest Expense on Debt Pretax Income Income Taxes Current Domestic Income Tax Deferred Domestic Income Tax Income Tax Credits Net Income Before Extra Items/Prefer Dividends Net Income Before Preferred Dividends Net Income Available to Common
51.77 42.32 3.33 6.12 51.52 -5.19 8.31 0.33 9.58 3.16 6.78 12.04 0.68 11.37 5.22 10.03 0.53 0.19 6.15 6.15 6.15
286.70 123.57 74.39 90.16 250.12 9.31 29.31 2.97 4.18 3.39 4.05 56.08 25.30 31.12 10.41 7.04 -0.15 0.02 20.12 20.14 20.12
166.86 73.37 37.39 57.43 146.51 3.30 20.94 0.82 0.94 1.96 1.93 32.89 12.09 21.05 5.46 2.70 -0.06 0.00 14.59 14.51 14.58
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.8.3
127
Income to Labor: Gaps
The following graphics summarize for computer programming services the large labor-income gaps between firms operating in Czech Republic and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.
Gap: Net Sales or Revenues ($k/employee) 286.7
300
166.86
200 100
51.77
0 -100
-115.09
-200 Czech Republic
Europe
World Average
Gap
Gap: Cost of Goods Sold (Excluding Depreciation) ($k/employee) 150
123.57
100 50
73.37 42.32
0 -31.05
-50 Czech Republic
Europe
World Average
Gap
Gap: Depreciation, Depletion & Amortization ($k/employee) 74.39
80 60
37.39
40 20
3.33
0 -20
-34.06
-40 Czech Republic
www.icongrouponline.com
Europe
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
128
Gap: Gross Income ($k/employee) 90.16
100
57.43
50
6.12
0 -50
-51.31
-100 Czech Republic
Europe
World Average
Gap
Gap: Other Operating Expenses ($k/employee) 300
250.12
200 100
146.51 51.52
0 -94.99 Gap
-100 Czech Republic
Europe
World Average
Gap: Operating Expenses - Total ($k/employee) 9.31
10 8 6
5.19 3.3
4
1.89
2 0 Czech Republic
Europe
World Average
Gap
Gap: Operating Income ($k/employee) 29.31
30
20.94
20 10
8.31
0 -10
-12.63
-20 Czech Republic
www.icongrouponline.com
Europe
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
129
Gap: Extraordinary Charge - Pretax ($k/employee) 10
9.58
8.64
8 6
4.18
4 0.94
2 0 Czech Republic
Europe
World Average
Gap
Gap: Earnings Before Interest and Taxes (EBIT) ($k/employee) 56.08
60
32.89
40 20
12.04
0 -20
-20.85
-40 Czech Republic
Europe
World Average
Gap
Gap: Interest Expense on Debt ($k/employee) 25.3
30 20 10
12.09 0.68
0 -10
-11.41
-20 Czech Republic
Europe
World Average
Gap
Gap: Pretax Income ($k/employee) 40
31.12
30 20
21.05 11.37
10 0 -10 Czech Republic
www.icongrouponline.com
Europe
World Average
-9.68 Gap
©2007 Icon Group International, Inc.
Financial Indicators
3.8.4
130
Key Percentiles and Rankings
We now consider the distribution of income-labor ratios using ranks and percentiles across . What percent of countries have a value lower or higher than Czech Republic (what is the ratio's rank or percentile)? The table below answers this question with respect to income-labor ratios. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance or productivity. After the summary table below, a few key incomelabor ratios are highlighted in additional tables. Income Structure ($k/employee)
Czech Republic
Rank of Total
Percentile
51.77 42.32 3.33 6.12 51.52 -5.19 8.31 0.33 9.58 3.16 6.78 12.04 0.68 11.37 5.22 10.03 0.53 0.19 6.15 6.15 6.15
47 of 53 36 of 48 48 of 53 51 of 51 43 of 50 43 of 43 32 of 53 18 of 29 3 of 32 16 of 48 7 of 53 35 of 53 48 of 53 31 of 53 20 of 53 9 of 41 7 of 37 2 of 7 33 of 53 33 of 53 33 of 53
11.32 25.00 9.43 0.00 14.00 0.00 39.62 37.93 90.63 66.67 86.79 33.96 9.43 41.51 62.26 78.05 81.08 71.43 37.74 37.74 37.74
_________________________________________________________________________________________________________
Net Sales or Revenues Cost of Goods Sold (Excluding Depreciation) Depreciation, Depletion & Amortization Gross Income Other Operating Expenses Operating Expenses - Total Operating Income Extraordinary Credit - Pretax Extraordinary Charge - Pretax Non-Operating Interest Income Other Income/Expense Net Earnings Before Interest and Taxes (EBIT) Interest Expense on Debt Pretax Income Income Taxes Current Domestic Income Tax Deferred Domestic Income Tax Income Tax Credits Net Income Before Extra Items/Prefer Dividends Net Income Before Preferred Dividends Net Income Available to Common
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
131
Cost of Goods Sold (Excluding Depreciation) Countries
Value ($K/employee)
Rank
Percentile
333.99 300.97 277.10 226.57 218.63 207.39 191.60 175.10 170.92 162.56 131.29 123.34 122.60 120.25 115.22 112.21 110.62 105.23 101.62 96.96 95.65 93.20 89.75 89.66 89.37 86.64 83.56 81.12 64.46 54.96 52.30 51.68 50.06 42.32 39.30 33.76 31.36 29.23 24.90 20.58 18.51
1 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 43 45 46
97.92 93.75 91.67 89.58 87.50 85.42 83.33 81.25 79.17 77.08 75.00 72.92 70.83 68.75 66.67 64.58 62.50 60.42 58.33 56.25 54.17 52.08 47.92 45.83 43.75 41.67 39.58 37.50 35.42 33.33 31.25 29.17 27.08 25.00 22.92 20.83 18.75 16.67 10.42 6.25 4.17
Region
_________________________________________________________________________________________________________
South Korea Russia Switzerland Japan Ireland France Belgium Denmark Hungary Germany the United Kingdom Peru Luxembourg USA Canada Sweden Australia South Africa Hong Kong Italy Argentina Greece Norway Netherlands Singapore Spain Portugal China Finland Brazil Chile Poland Malaysia Czech Republic New Zealand Thailand India Pakistan Philippines Israel Indonesia
Asia Europe Europe Asia Europe Europe Europe Europe Europe Europe Europe Latin America Europe North America North America Europe Oceana Africa Asia Europe Latin America Europe Europe Europe Asia Europe Europe Asia Europe Latin America Latin America Europe Asia Europe Oceana Asia Asia the Middle East Asia the Middle East Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
132
Cost of Goods Sold (Excluding Depreciation) (Computer Programming Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
321.98 307.30 306.60 300.97 300.26 277.10 258.57 218.63 207.39 191.60 175.10 170.92 162.56 153.70 146.14 143.88 131.29 122.60 121.49 112.21 107.67 97.75 97.44 96.96 93.20 89.75 89.66 86.66 86.64 86.38 85.25 83.56 81.34 79.99 64.46 51.68 46.47 44.72 44.64 42.32 40.70 40.16 40.15
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43
97.67 95.35 93.02 90.70 88.37 86.05 83.72 81.40 79.07 76.74 74.42 72.09 69.77 67.44 65.12 62.79 60.47 58.14 55.81 53.49 51.16 48.84 46.51 44.19 41.86 39.53 37.21 34.88 32.56 30.23 27.91 25.58 23.26 20.93 18.60 16.28 13.95 11.63 9.30 6.98 4.65 2.33 0.00
_________________________________________________________________________________________________________
Estonia Belarus Slovakia Russia Lithuania Switzerland Liechtenstein Ireland France Belgium Denmark Hungary Germany Ukraine Gibraltar Georgia the United Kingdom Luxembourg Iceland Sweden Albania Vatican City Faroe Islands Italy Greece Norway Netherlands Monaco Spain Malta Isle of Man Portugal Slovenia Cyprus Finland Poland Moldova Kazakhstan Bulgaria Czech Republic Andorra Latvia Croatia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
133
Operating Expenses - Total Countries
Value ($K/employee)
Rank
Percentile
62.42 61.09 36.19 31.82 31.41 22.12 21.56 18.20 15.50 12.30 10.01 7.97 7.61 6.65 6.04 5.50 4.85 4.29 3.15 2.88 2.59 2.33 2.24 1.41 1.18 1.18 1.14 0.88 0.72 0.71 0.47 0.36 0.35 0.20 0.12 -0.16 -0.27 -5.19
1 2 3 4 5 6 7 8 9 10 11 13 14 15 16 17 18 19 21 22 23 25 26 27 29 30 31 33 34 35 36 37 38 39 40 41 42 43
97.67 95.35 93.02 90.70 88.37 86.05 83.72 81.40 79.07 76.74 74.42 69.77 67.44 65.12 62.79 60.47 58.14 55.81 51.16 48.84 46.51 41.86 39.53 37.21 32.56 30.23 27.91 23.26 20.93 18.60 16.28 13.95 11.63 9.30 6.98 4.65 2.33 0.00
Region
_________________________________________________________________________________________________________
Germany France Switzerland Australia Finland Portugal Ireland Spain Norway Netherlands Philippines Hong Kong the United Kingdom Singapore Sweden Peru Denmark South Africa USA Malaysia South Korea Russia Italy Indonesia Poland Belgium India Argentina Luxembourg China Pakistan Brazil Chile Israel Japan Greece Canada Czech Republic
Europe Europe Europe Oceana Europe Europe Europe Europe Europe Europe Asia Asia Europe Asia Europe Latin America Europe Africa North America Asia Asia Europe Europe Asia Europe Europe Asia Latin America Europe Asia the Middle East Latin America Latin America the Middle East Asia Europe North America Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
134
Operating Expenses - Total (Computer Programming Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
62.42 61.09 36.19 33.77 31.41 22.12 21.56 21.18 18.20 17.08 15.50 12.30 7.64 7.61 6.45 6.04 4.85 4.80 3.18 2.50 2.38 2.38 2.33 2.33 2.26 2.24 1.18 1.18 1.07 1.03 1.02 0.72 -0.14 -0.15 -0.16 -4.92 -4.92 -5.19
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38
97.37 94.74 92.11 89.47 86.84 84.21 81.58 78.95 76.32 73.68 71.05 68.42 65.79 63.16 60.53 57.89 55.26 52.63 50.00 47.37 44.74 42.11 39.47 36.84 34.21 31.58 28.95 26.32 23.68 21.05 18.42 15.79 13.16 10.53 7.89 5.26 2.63 0.00
_________________________________________________________________________________________________________
Germany France Switzerland Liechtenstein Finland Portugal Ireland Cyprus Spain Slovenia Norway Netherlands Faroe Islands the United Kingdom Monaco Sweden Denmark Albania Iceland Estonia Belarus Slovakia Russia Lithuania Vatican City Italy Poland Belgium Moldova Kazakhstan Bulgaria Luxembourg Isle of Man Malta Greece Croatia Latvia Czech Republic
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
135
Operating Income Countries
Value ($K/employee)
Rank
Percentile
194.13 193.60 77.80 68.12 63.89 62.57 57.84 49.47 34.00 32.15 26.70 26.06 22.69 22.63 21.33 21.15 20.62 20.45 17.43 17.27 16.06 14.66 13.64 12.83 11.78 10.89 10.43 9.48 8.31 7.96 7.91 7.55 7.35 7.11 6.14 6.08 5.44 5.34 5.12 5.08 4.93 3.46 0.13 -0.14 -7.97
1 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 19 20 21 22 23 24 25 26 27 28 29 31 32 33 34 35 36 37 40 41 43 44 45 46 47 50 51 52 53
98.11 96.23 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 41.51 39.62 37.74 35.85 33.96 32.08 30.19 24.53 22.64 18.87 16.98 15.09 13.21 11.32 5.66 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Turkey Mexico Hong Kong France Greece Israel Portugal Pakistan New Zealand Japan Argentina USA South Korea Taiwan Australia Denmark China Russia Singapore Spain Ireland Canada the United Kingdom Germany Philippines Belgium Switzerland Peru Czech Republic Sweden Italy Thailand Netherlands Poland India Malaysia South Africa Brazil Indonesia Chile Finland Norway Austria Luxembourg Hungary
the Middle East Latin America Asia Europe Europe the Middle East Europe the Middle East Oceana Asia Latin America North America Asia Asia Oceana Europe Asia Europe Asia Europe Europe North America Europe Europe Asia Europe Europe Latin America Europe Europe Europe Asia Europe Europe Asia Asia Africa Latin America Asia Latin America Europe Europe Europe Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
136
Operating Income (Computer Programming Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
184.45 169.27 164.51 158.69 74.61 68.12 63.89 59.22 58.44 57.84 55.37 35.20 26.33 21.88 21.15 20.88 20.83 20.45 20.40 17.27 16.90 16.22 16.06 13.64 12.83 10.89 10.43 9.73 8.31 8.28 7.98 7.96 7.91 7.88 7.88 7.35 7.11 6.40 6.16 6.14 4.93 3.46 0.13 0.13 0.13 0.13 -0.14 -6.71 -6.81 -7.17 -7.97
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Faroe Islands France Greece Malta Isle of Man Portugal Cyprus Andorra Iceland Estonia Denmark Belarus Slovakia Russia Lithuania Spain Monaco Slovenia Ireland the United Kingdom Germany Belgium Switzerland Liechtenstein Czech Republic Albania Vatican City Sweden Italy Latvia Croatia Netherlands Poland Moldova Kazakhstan Bulgaria Finland Norway Austria San Marino Jersey Guernsey Luxembourg Georgia Gibraltar Ukraine Hungary
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
137
Earnings Before Interest and Taxes (EBIT) Countries
Value ($K/employee)
Rank
Percentile
372.02 371.01 193.10 116.63 108.87 94.41 80.61 77.04 76.77 70.26 69.13 48.23 43.41 31.77 30.81 30.50 28.65 27.17 24.49 23.51 22.00 19.55 18.71 18.21 15.81 15.38 13.41 13.05 12.41 12.35 12.04 10.12 9.31 8.93 8.87 8.74 8.59 7.94 7.86 7.41 6.63 5.99 2.98 1.28 1.10
1 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 21 22 23 24 25 26 27 29 31 32 33 34 35 38 39 40 41 42 43 44 45 47 48 49 51 52 53
98.11 96.23 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 60.38 58.49 56.60 54.72 52.83 50.94 49.06 45.28 41.51 39.62 37.74 35.85 33.96 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 11.32 9.43 7.55 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Turkey Mexico Portugal Denmark Pakistan Italy Hong Kong Israel France Ireland Greece Taiwan New Zealand Japan Argentina Australia USA South Korea Russia Germany China Singapore Thailand Spain Peru the United Kingdom Switzerland Brazil Chile Philippines Czech Republic Belgium Finland Canada Netherlands Poland Sweden Indonesia Malaysia India South Africa Norway Hungary Austria Luxembourg
the Middle East Latin America Europe Europe the Middle East Europe Asia the Middle East Europe Europe Europe Asia Oceana Asia Latin America Oceana North America Asia Europe Europe Asia Asia Asia Europe Latin America Europe Europe Latin America Latin America Asia Europe Europe Europe North America Europe Europe Europe Asia Asia Asia Africa Europe Europe Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
138
Earnings Before Interest and Taxes (EBIT) (Computer Programming Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
353.47 324.38 315.25 304.10 193.10 184.84 116.63 95.18 94.41 77.29 76.77 70.26 69.13 64.07 63.23 44.95 28.95 26.20 25.00 24.95 24.49 24.43 23.51 18.96 18.21 17.09 15.38 13.80 13.41 12.52 12.04 11.43 11.43 10.12 9.31 8.87 8.74 8.59 7.86 7.56 7.55 5.99 2.98 2.68 2.55 2.51 1.28 1.27 1.24 1.24 1.10
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Portugal Cyprus Denmark Vatican City Italy Faroe Islands France Ireland Greece Malta Isle of Man Andorra Iceland Estonia Belarus Slovakia Russia Lithuania Germany Monaco Spain Slovenia the United Kingdom Albania Switzerland Liechtenstein Czech Republic Latvia Croatia Belgium Finland Netherlands Poland Sweden Moldova Kazakhstan Bulgaria Norway Hungary Ukraine Gibraltar Georgia Austria San Marino Guernsey Jersey Luxembourg
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
139
Pretax Income Countries
Value ($K/employee)
Rank
Percentile
188.49 187.98 79.83 76.03 70.35 62.51 55.50 51.51 42.51 40.67 28.95 26.97 25.74 25.55 25.44 24.37 24.30 20.94 20.60 18.86 18.74 17.53 16.26 13.66 11.72 11.60 11.57 11.37 8.08 7.77 7.30 7.26 7.23 7.22 6.65 6.57 6.38 4.38 4.38 4.09 3.89 3.82 2.39 0.28 0.21
1 2 4 5 6 7 8 9 10 11 12 13 14 15 16 18 19 20 21 22 23 24 25 26 27 28 29 31 34 35 36 37 38 39 41 42 43 45 46 47 48 49 51 52 53
98.11 96.23 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 41.51 35.85 33.96 32.08 30.19 28.30 26.42 22.64 20.75 18.87 15.09 13.21 11.32 9.43 7.55 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Turkey Mexico Hong Kong Israel Portugal France Greece Pakistan New Zealand Taiwan Japan South Korea Italy Australia Denmark USA Russia Argentina Ireland Singapore China Germany Spain Thailand Switzerland Philippines the United Kingdom Czech Republic Belgium Sweden India Finland Malaysia Indonesia Netherlands Canada Poland South Africa Norway Brazil Chile Peru Hungary Luxembourg Austria
the Middle East Latin America Asia the Middle East Europe Europe Europe the Middle East Oceana Asia Asia Asia Europe Oceana Europe North America Europe Latin America Europe Asia Asia Europe Europe Asia Europe Asia Europe Europe Europe Europe Asia Europe Asia Asia Europe North America Europe Africa Europe Latin America Latin America Latin America Europe Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
140
Pretax Income (Computer Programming Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
179.09 164.35 159.73 154.08 76.55 70.35 67.34 62.51 55.50 51.44 50.76 44.02 26.00 25.94 25.74 25.44 24.81 24.75 24.62 24.30 24.24 20.60 18.29 17.53 16.26 15.26 11.72 11.57 11.37 10.94 10.79 10.78 8.08 7.77 7.26 6.65 6.38 5.73 5.52 5.51 4.38 3.33 2.39 2.15 2.04 2.01 0.28 0.21 0.21 0.20 0.20
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Faroe Islands Portugal Cyprus France Greece Malta Isle of Man Andorra Estonia Vatican City Italy Denmark Belarus Slovakia Iceland Russia Lithuania Ireland Monaco Germany Spain Slovenia Switzerland the United Kingdom Czech Republic Liechtenstein Latvia Croatia Belgium Sweden Finland Netherlands Poland Moldova Kazakhstan Bulgaria Norway Albania Hungary Ukraine Gibraltar Georgia Luxembourg Austria San Marino Jersey Guernsey
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
141
Income Taxes Countries
Value ($K/employee)
Rank
Percentile
65.80 65.63 37.02 13.61 13.00 11.94 11.69 10.91 8.58 7.69 7.25 7.11 6.65 6.37 6.00 5.74 5.23 5.22 5.15 5.12 4.84 4.80 3.91 3.66 3.63 3.57 3.56 3.45 3.35 2.82 2.69 2.67 2.32 2.17 1.97 1.94 1.94 1.65 1.16 1.11 1.06 1.02 1.01 0.34 -0.30
1 2 4 5 6 7 8 9 10 11 12 13 14 15 17 18 19 20 21 22 23 24 26 28 29 30 31 32 33 35 36 37 38 39 40 41 42 44 47 48 49 50 51 52 53
98.11 96.23 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 50.94 47.17 45.28 43.40 41.51 39.62 37.74 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 16.98 11.32 9.43 7.55 5.66 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Turkey Mexico Greece Japan Portugal Italy Israel New Zealand Hong Kong USA Germany Argentina South Korea Denmark Russia Australia Ireland Czech Republic Belgium Taiwan France Thailand the United Kingdom Spain Philippines Sweden Switzerland Canada Singapore Finland Pakistan China Netherlands Poland Malaysia Indonesia South Africa Peru India Hungary Brazil Norway Chile Austria Luxembourg
the Middle East Latin America Europe Asia Europe Europe the Middle East Oceana Asia North America Europe Latin America Asia Europe Europe Oceana Europe Europe Europe Asia Europe Asia Europe Europe Asia Europe Europe North America Asia Europe the Middle East Asia Europe Europe Asia Asia Africa Latin America Asia Europe Latin America Europe Latin America Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
142
Income Taxes (Computer Programming Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
62.52 57.38 55.76 53.79 37.02 34.31 33.86 13.00 12.44 12.04 11.94 11.30 8.22 7.77 7.25 6.41 6.37 6.12 6.11 6.00 5.98 5.23 5.22 5.15 4.95 4.95 4.84 3.91 3.66 3.57 3.56 3.44 3.32 3.25 2.82 2.32 2.17 1.95 1.87 1.87 1.44 1.11 1.02 1.00 0.95 0.93 0.34 0.33 0.33 0.33 -0.30
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Greece Malta Isle of Man Portugal Cyprus Vatican City Italy Andorra Faroe Islands Iceland Germany Estonia Denmark Belarus Slovakia Russia Lithuania Ireland Czech Republic Belgium Latvia Croatia France the United Kingdom Spain Sweden Switzerland Slovenia Liechtenstein Monaco Finland Netherlands Poland Moldova Kazakhstan Bulgaria Albania Hungary Norway Ukraine Gibraltar Georgia Austria San Marino Guernsey Jersey Luxembourg
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
143
4 4.1
MACRO-ACCESSIBILITY IN CZECH REPUBLIC EXECUTIVE SUMMARY
At the beginning of the 20th century, the area that is now the Czech Republic was one of the economic powerhouses of Europe with a manufacturing base that rivaled that of neighboring Germany and the eighth highest per capital income in the world. Two World Wars – and 40 decades of Soviet occupation – held back Czech growth. During the late 90s, a central location in Europe, comparatively low-cost skilled labor, and well-packaged investment incentives induced many U.S., Japanese, and European firms to buy or build factories here, and the region is regaining much of its manufacturing might. In the immediate aftermath of European Union (EU) accession, the Czech Republic is experiencing growth in wages, prices, and the strength of the Czech crown. These factors – combined with an economic slowdown in neighboring Germany – have led to waves of layoffs and increased unemployment. While the country is still a very attractive location of high value-added, precision manufacturing, Czech economic officials are now shifting to attracting high-tech industry and service centers as well as supporting local small businesses and entrepreneurs.
4.2
ECONOMIC FUNDAMENTALS AND DYNAMICS
Since the Velvet Revolution in 1989, the Czech Republic has transformed itself into a western-oriented market economy with more than 80 percent of enterprises in private hands.
4.2.1
Government Intervention Risks
While more than 80 percent of output is produced by the private sector, the government still holds majority or significant stakes in several large Czech enterprises, notably firms in the energy, transportation and communications sectors. The government’s role is evolving from owner to regulator in many of these sectors as privatization proceeds. For example, independent regulatory agencies have recently been established in the telecommunications and energy sectors. Tax revenues amount to 37% of GDP. Non-discretionary expenditures, including state employees’ salaries, account for more than 70 percent of the consolidated government expenditures.
4.2.2
Infrastructure Development
Upgrading the Czech Republic’s infrastructure, specifically telecommunications and transportation, is important for continued economic growth and development. The quality of Czech transport networks and systems, as well as rolling stock and vehicles, is generally below the standards of advanced European countries. All transport sectors, including railway, highway, inland waterway and air, have been targeted for infrastructure upgrade. The infrastructure for e-commerce is slowly improving. There are currently 19 Internet service providers, which cover a majority of the Czech Republic. Statistics on homes with Internet access vary widely, ranging from five to fifteen percent of the population, but all concur the availability of Internet connections through a variety of options is on the rise.
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©2007 Icon Group International, Inc.
Macro-Accessibility
4.2.3
144
European Union Accession
Integrating the Czech economy into the West, specifically into the EU, remains a top government priority. The Czech Republic became a full member of the EU on May 1, 2004. On that date, the Czech Republic ceased conducting customs inspections at its borders and adopted the EU’s common external tariff. Accession was preceded by five or more years of intensive effort to harmonize Czech laws and standards with those of the EU.
4.3 4.3.1
POLITICAL RISKS Economic Relationship with the United States
U.S.-Czech relations are excellent and reflect strong historical ties. The U.S. and the Czech Republic cooperate on a wide range of regional and global issues. The Czech Republic became a NATO ally in 1999. It has been a firm supporter of the international struggle against terrorism. Czech troops have served in both Iraq and Afghanistan. The U.S. supports Czech participation in Western economic and political institutions, including OECD and the WTO. U.S. assistance during the 1990’s played a major role in facilitating the Czech Republic’s transition to a market economy.
4.3.2
Politics and the Business Environment
The Czech government actively promotes inward foreign investment. Integration and cooperation with the EU and other international economic and political institutions remains a fundamental tenet of the major political parties on both sides of the political spectrum. American and other foreign business people often cite a convoluted -- or, in some cases, corrupt -- system of bureaucracy at both national and local levels as impeding market access. The government has made some efforts to deal with this problem. Potential investors must sometimes spend considerable time and effort to finalize a deal, or to enforce the terms of a contract, and the Embassy has occasionally been asked to intercede on an American investor’s behalf.
4.3.3
The New Regional Governments
The Czech Republic introduced a new system of regional government in 2000, establishing 14 regional governments. The regional governments are taking over responsibilities for health care, education, culture and transportation. They are still largely dependent on financing from the central government.
4.4
MARKETING STRATEGIES
The Czech Republic is geographically small, with 10 percent of the population and most decision-makers concentrated in the capital city of Prague. It is a market where good personal relationships are crucial, and everyone seems to know everyone else. U.S. firms attempting, from a distance, to build the close network of contacts and relationships needed to penetrate this market will usually find it to be a time-consuming and costly process. Therefore, we recommend basing your approach on finding and supporting a Czech partner.
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Agents and Distributors
What type of partner to look for will depend on your business:
Consumer and Industrial Goods One way into the market is to find a distributor with an existing distribution system who may welcome a new U.S. product that supplements an existing line. The best distributors work closely with their foreign suppliers to develop strategies tailored to the nuances of the local market, drawing on the distributor’s knowledge of local pricing strategies, promotion techniques, and competition. In most cases, one distributor can provide coverage throughout the entire country for a related line of products. However, a strategy of using multiple distributors that cover only specific regions should also be considered.
Services Firms and Educational Institutions U.S. professional service firms and educational institutions should consider teaming with Czech partners as a market entry strategy. For example, U.S. firms seeking to market environmental protection or other engineering services will be unable to compete for many Czech government or EU tenders without a local partner. Overall, this approach will enable a U.S. firm to have constant visibility on the Czech market.
High-End Retail Firms There is a large concentration of the Czech high-income population residing in Prague, and a growing number of visiting tourists, that make it an attractive market for high-end retail firms. U.S. firms selling high-value consumer goods may wish to consider investing in a well-positioned retail outlet in Prague that can then be used as the main point of sale for this market.
4.4.2
Checking Bona Fides
Due diligence on potential partners (as well as on suppliers, major clients, and other contacts) is important. Dun & Bradstreet (Tel.: (+420) 271 031 500, Fax: (+420) 271 031 510,
[email protected], www.dbis.cz) offers profiles and financial information on Czech firms.
4.4.3
Distribution Channel Options
The Czech Republic has a developed, European-style distribution system and a strong and growing cadre of professional sales agents and distributors in most market segments.
Consumer Sector Prague’s winding cobblestone streets are lined with tiny shops -- grocery stores, pharmacies, music stores, clothing stores, and bookstores. These small shops now face stiff competition from American-style supermarkets, European “hypermarkets,” and shopping malls with a broader selection, lower prices and extended weekend and evening hours (increasingly, 24-hour operation). Swedish IKEA, British TESCO, French Carrefour, and German OBI and Baumax, among others, operate multiple locations throughout Prague and have expanded throughout the nation. At this time, no large U.S. retailers are present in the market.
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Industrial Sectors Representative offices or industrial sales agents usually handle industrial sales. The cadre of agents has expanded rapidly in recent years. U.S. firms will find agents to be very strong technically. However, many will need help in developing marketing and customer service strategies. Margins for distributors are similar to those prevalent in Western European countries.
E-Commerce While Internet sales represent a small fraction of the Czech market, they are increasing rapidly. Business-to-business sites are experiencing geometric growth and are becoming increasingly important and trusted. While most U.S. firms should not place full reliance on web-marketing strategies, web-sites may supplement traditional marketing efforts.
4.4.4
Advertising and Trade Promotion
U.S. firms can spur sales through trade shows, in-country promotions, and advertising. These activities are especially crucial and necessary in the retail market.
Trade Shows With a history dating back to the Middle Ages, trade shows are a European way of life. Both Prague and Brno host many international shows. A small booth is a good -- and comparatively low-cost way -- to meet customers in the Czech Republic and neighboring countries.
Trade Promotions The Czech Republic is a small market, and each sector has a few key decision-makers and opinion leaders. One way to reach these leaders quickly is to hold an innovative in-country promotion. Examples of good programs include technical seminars or small receptions at industry trade shows in Brno and Prague, media events and press conferences related to events like launching new lines or opening new offices, or annual holiday receptions for key clients and potential clients. On the retail side, in-store promotions are utilized extensively.
Advertising Options A U.S. firm can craft a targeted advertising campaign to introduce new products or support established ones for a fraction of the cost of advertising in the U.S. Retain a local public relations/advertising firm to provide an integrated program. Foreign firms most often pay for in-country advertising, while their local distributors provide facilities, warehousing, and equipment.
4.4.5
Pricing Issues
Czech consumers and firms are very price-sensitive. In the consumer market, however, increasing incomes and the wealth of products in the market have led to a shift toward prestigious name brands -- over low-cost competitors -for certain high-end goods. U.S. firms are up against European competitors, who have lower transport costs and (usually) lower import duties, as well as Czech firms that have home field advantage. A number of larger U.S. firms have lowered costs and improved sales prospects by doing some low-cost assembly or value-added production within the Czech Republic.
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The Czech economy has traditionally been a cash economy, although credit card use has grown exponentially as bank regulations for the issuance of credit cards have been relaxed to near-Western standards. Today, virtually all professionals in major cities have at least one credit card.
4.4.6
Public Sector Marketing
The Czech government has a long shopping list as it seeks to modernize its military to meet NATO goals and commitments, upgrade infrastructure, and meet environmental and other EU requirements. Though the Czech government faces continuing budget constraints, EU, U.S. Defense Department, and other international funds are available to help finance purchases. Both Czech federal government and major municipal governments are making increasing use of bond offerings to pay for infrastructure improvements. As a member of the EU, the Czech Republic is now subject to the rules of the GATT Agreement on Government Procurement. The Czech government’s current procurement law requires public tenders for major government and government-financed procurements. Tenders are publicized in the local daily press, particularly Hospodarske noviny (Economic News) and Mlada Fronta Dnes newspaper, as well as in the Obchodni vestnik (Trade Gazette) published by the Czech government. Major manufacturers of a particular product are usually notified directly. The period between calling and closing tenders is 180 days for internationally financed procurements. U.S. companies bidding on Czech government tenders must have their products approved for the EU market. U.S. companies who find local Czech partners for joint bids should be increasingly competitive in tenders for environmental services, engineering services, and financial and management consulting services. Czech firms enjoy a 10 percent preference on bids. In addition, bid bonds from 1-5% may be required for large-scale contracts. An emphasis on total value (rather than low cost) has lessened the disadvantages U.S. companies once had against lower-cost domestic and European firms. Lack of transparency throughout the procurement process remains an obstacle.
4.4.7
Other Market Entry Strategies
While most companies will find success with strategic partner or agent/distributor relationships, other successful techniques have been tried:
4.4.8
Direct Marketing Options
Direct marketing has become a common way to distribute products in the Czech Republic, with Avon, Amway, Mary Kay Cosmetics, Oriflamme, Herbalife and Lux leading the way. Direct marketers enable these firms to reach clients in small towns and the Czech countryside, where retail outlets are limited. Both Amway’s multi-level and Lux’s onelevel marketing approaches have worked here. Network marketing has started recently, with four successful “membership” stores in Prague, Brno, Plzen, and Ostrava. There is a Czech National Association of Direct Marketing, which brings awareness to the international rules of direct marketing, such as the length of guarantees and the consumer’s right to return a product.
4.4.9
Joint Ventures and Licensing Options
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companies are sometimes reluctant to acquire a Czech firm outright because of environmental or other long-term liabilities.
4.4.10
Establishing a Representative Office
If you wish to establish an office of your own, you must register your company at a local district office. to accomplish this, we suggest you work through a local service provider and attorney. Prague has a well-educated, multilingual population, many of whom have years of experience in working for Western firms. Companies offering attractive salaries can normally secure a talented nucleus of local staff for a new office. Executive recruiting firms are active in Prague, though most executives use the time-honored word-of-mouth method in making hiring decisions. As public transport is efficient, affordable, and reliable (and most employees will use it), companies with smaller pocketbooks may wish to consider locating to less expensive space outside the center.
4.4.11
Franchising Activities
The Czech Republic still lacks laws regulating franchising. Franchising, therefore, takes the form of a contract between two entities regulated by the Commercial Code pertaining to commercial contracts and sales and licensing agreements. McDonald’s, and KFC have founded their own outlets in the Czech Republic, although a slowly increasing number are now owner-operated franchises. While these outlets have done well, few Czechs have the capital or experience to invest in their own franchises and typical master franchise networks have yet to develop. However, in the near future, one or more local banks may be unveiling financing programs geared towards potential franchisees.
4.4.12
Key Marketing Contacts
Major Newspapers and Business Journals Mlada Fronta Dnes (largest national daily newspaper) Tel: +420 222 061 111 Fax: +420 222 062 229 www.idnes.cz Hospodarske noviny (daily business newspaper) Tel: +420 233 074 191 Fax: +420 233 074 199 www.ihned.cz Lidove Noviny (daily newspaper) Tel: +420 225 098 111 Fax: +420 225 098 199 www.lidovky.cz Profit (weekly business newspaper) Tel: +420 225 010 377 Fax: +420 225 010 366 www.profit.cz
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Ekonom (weekly business magazine) Tel: +420 233 074 190 Fax: +420 233 074 199 www.ihned.cz Obchodnik (weekly business magazine) Tel: +420 233 071 490 Fax: +420 233 072 051 www.obchodnik.ihned.cz The Prague Post (weekly English-language newspaper) Tel: +420 296 334 400 Fax: +420 296 334 450 www.praguepost.cz Prague Tribune (bimonthly magazine, English/ Czech) Tel: +420 220 400 121 Fax: +420 220 400 123 www.prague-tribune.cz Metro (free daily newspaper distributed in Metro stations) Tel: +420 221732 030 Fax: +420 224 812 602 www.metro.cz Euro ekonomicky tydenik (economic weekly) Tel: +420 251 026 107 Fax: +420 257 325 905 www.euro.cz Fleet Sheet (daily English) Tel: +420 221 004 315 Fax: +420 224 221 580 www.fleet.cz E-mail:
[email protected]
Major B2B Web sites •
www.b2bcentrum.cz- major provider of services in the field of B2B in Central Europe
•
www.abcb.cz/- general business information, news, food products
•
www.glob2b.cz/- advertising banners on the Internet
U.S. Advertising Agencies Leo Burnett Advertising, s.r.o. Tel: +420 257 310 506 Fax: +420 257 321 563 www.leoburnett.com MARK/BBDO, a.s. Tel: +420 221 617 201 www.icongrouponline.com
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Fax: +420 224 810 904 www.bbdo.cz Young & Rubicam, s.r.o. Tel: +420 221 420 111 Fax: +420 221 420 122 www.yr.com McCann-Ericson Tel: +420 222 009 111 Fax: +420 222 723 996 www.mccann.cz Ogilvy & Mather, s.r.o. Tel: +420 221 998 111 Fax: +420 221 998 888 www.ogilvy.cz DDB, a.s. Tel: +420 221 013 111 Fax: +420 221 03 901 www.ddb.com TBWA Praha, s.r.o. Tel: +420 224 232 151 Fax: +420 224 232 108 www.tbwa.cz Grey Praha, s.r.o. Tel: +420 266 798 111 Fax: +420 266 798 102 www.grey.cz
Selected Freight Forwarders Cechofracht, a.s. Tel: +420 281004 111 Fax: +420 272 705 240 www.cechofracht.cz NH-Trans, s.r.o. Tel: +420 596 279 411 Fax: +420 596 279 401 www.nh-trans.cz Danzas, a.s. Tel: +420 596 270 006 Fax: +420 596 270 019 www.danzas.cz Schenker-BTL Tel: +420 311 711 111 Fax: +420 311 711 399 www.icongrouponline.com
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www.schenker-btl.cz Cetrans, a.s. Tel. +420 477 107 111 Fax. +420 477 107 223 www.cetrans.cz AFG Holding Tel: +420 545 42 5921 Fax: +420 545 495 929 www.afgholding.cz Maersk Agency sro Tel: +420 257182320 Fax: +420 257182331 www.maersk.com
4.5
IMPORT AND EXPORT REGULATION RISKS
The Czech Republic is committed to a free market and maintains a generally open economy, with few barriers to trade and investment. Membership in the European Union means that tariffs and standards, as well as most procedures, must conform to EU norms. This includes adoption of EU technical barriers to some imports of agricultural and food products. Customs formalities are usually handled by the importer.
4.5.1
Adherence to Free Trade Agreements
As a member of the European Union, the Czech Republic participates in all free trade arrangements entered into by the EU.
4.5.2
Customs Regulations and Tariff Rates
After accession to the European Union on May 1, 2004, customs controls at the land borders of the Czech Republic were abolished. Immigration controls will continue. International airports, of which the largest is Prague Ruzyne airport, will be the only external borders controlled by Czech customs authorities. VAT and excise taxes will be payable by the recipient of goods on the basis of Czech regulations. Goods transported to the Czech Republic under the Community Transit regime must be declared at a customs office in the Czech Republic. The following European Union legislation is directly applicable as of the date of accession: •
Council Regulation (EEC) no. 2454/93 of 12 October 1992, establishing the Community Customs Code, as amended,
•
Commission Regulation (EEC) no. 2913/92 of 2 July 1993, laying down provisions for the implementation of Council Regulation (EEC) no. 2913/92.
•
Council Regulation (EEC) no. 918/83 of 28 March 1983, setting up a Community system of reliefs from customs duty, as amended,
•
Council Regulations (EEC) no. 2658/87 of 23 July 1987 on customs and statistical nomenclature and the Common Customs Tariff, as amended.
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These regulations are available at http://europa.eu.int/eur-lex/en/search/search_lif.html. Duty rates under the EU Common Customs Tariff will apply.
Value-Added Taxes The value-added tax (VAT) applies to all goods, both domestic and foreign, sold within the Czech Republic. The VAT rate is generally 19 percent, although a lower VAT of 5 percent is charged for selected goods, such as food and services. As part of its fiscal reforms, and in order to meet EU requirements, the government has moved some services up to the 19% VAT rate. VAT on imports is calculated on the declared customs value plus applicable duty and excise tax.
Excise Taxes Excise taxes are imposed on the following goods produced or imported into the Czech Republic: fuels and lubricants, tobacco products, beer, wine and liquor. The rate is determined by the type and quantity of the product and must be paid within ten days after being notified by the Customs Office of the tax amount due.
4.5.3
Documentation Required for Trade
U.S. companies exporting into the Republic from outside the European Union are required to present: •
A commercial invoice
•
A bill of lading
•
A shipper’s export declaration for items requiring an export license or valued above $2,500) and a declaration of conformity (issued by importer)
Certifications Some products require certification before a declaration of conformity can be issued. Depending on the nature of the goods, a veterinary health certificate and/or a certificate of origin (for concessionary customs rates, if applicable) can also be required. Products containing genetically modified organisms require special approvals.
4.5.4
Labeling Issues
Labeling and marking requirements for products depend on the type of product and the intended use. In general, however, labels must be in the Czech language and can be affixed to the product or on a leaflet attached to the product. Information must include the name of the product, name of producer, country of origin, and in some cases, instructions for use. Labels for some products, such as foods, beverages, food supplements, and textiles, must also provide content/composition. Special labeling rules for products with biotech content have been introduced. In addition, international norms for warning labels on consumer products apply. Czech labeling requirements were harmonized with EU norms in 2002. Czech importers and distributors are responsible for the correct labeling of products that are put on the Czech market and can typically advise the U.S. exporter of specific requirements regarding labeling and marking.
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Licensing Requirements
The Czech Ministry of Industry and Trade issues import licenses to those seeking to import selected goods into the Czech Republic. While most products and services are exempt from the licensing process, oil, natural gas, pyrotechnical products, sporting guns, ammunition and military equipment require a license. Under EU rules, imports of clothing, shoes, porcelain, and steel from certain Asian and Eastern European countries may require licenses.
4.5.6
Restrictions on Imports
The list of prohibited imports includes certain veterinary and plant materials, freon, non-registered pharmaceuticals and chemical, biological, and nuclear weapons.
4.5.7
Controls on Exports
The Czech Republic adheres to international export controls and works in close cooperation with the United States and other Western countries in implementing export controls on certain sensitive technologies. U.S. export controls on items exported from the United States to the Czech Republic are generally similar to those in effect on items exported to other Western European destinations. Contact the U.S. Department of Commerce, Bureau of Export Administration, Washington, D.C. (Tel.: (202) 482-2547, Fax: (202) 482-3617) for details on U.S. export controls.
4.5.8
Entering Temporary Imports
Temporary exemptions from duty are allowed for certain items, such as merchandise samples and items for display at trade shows or exhibitions. The Czech Republic also accepts ATA carnets as a way of facilitating temporary admission through customs. For more information about obtaining a carnet for clearance of goods, samples or equipment intended for temporary entry only, contact your local U.S. Department of Commerce Export Assistance Center. Companies exporting goods to the Czech Republic for the purpose of temporary use may do so as long as the period does not exceed 24 months (in some cases it is possible to extend this). The exact time period must be agreed upon with Czech Customs. When the goods are re-exported, three percent of the duty value per month that the goods resided in the Czech Republic must be paid if the goods were used (maximum will not exceed full duty amount). The potential customs debt must be secured by a guarantee. Exports to the Czech Republic of raw materials and certain semi-finished products that are processed and then reexported from the European Union enter duty-free. This is contingent upon the approval by Czech Customs of the conditions of processing and the handling of any waste caused through transformation of the goods.
4.5.9
Free Trade Zone Options
There are 10 free trade zones established in several cities throughout the Czech Republic. Materials, components and semi-finished products are exempted from customs duties or VAT if they are imported into a free trade zone. If the goods are then used in the manufacturing or processing of a final product that is then re-exported, they are also exempted from duties or VAT. Duties and VAT are applied on the declared value of the goods if they are cleared for www.icongrouponline.com
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free circulation within the European Union. Similar rules apply to goods placed in a bonded warehouse; however, manufacturing operations are generally not permitted there.
4.5.10
Local Standards
The Czech Republic has harmonized its standards with European norms. Products certified in the Czech Republic or another EU member state can be marketed in the Czech Republic. In addition, products certified to meet EU standards (identified by the “CE” mark) by authorized U.S. testing laboratories are acceptable. ISO 9000 standards are being used increasingly in the Czech Republic as evidence of high product quality. Domestically, the “Czech Made” mark is an award given to products that are judged to be of outstanding quality, environmentally friendly, and favorable to energy consumption. This award is given to Czech products that are produced by a company or entrepreneur registered in the Czech Republic, with at least 60 percent Czech content measured by the cost of the final product.
Organization The organization that develops and maintains standards within the Czech Republic is The Czech Office for Standards, Metrology and Testing. Their Web site (www.unmz.cz/index_en.html) outlines the Legislation in Force, International Contract Documents, as well as harmonized standards in accordance to particular government orders.
Conformity Assessment The list of acceptable conformity assessment bodies in the Czech Republic listed by the European Commission is found at http://europa.eu.int/comm/enterprise/nando-is/home/index.cfm. Additionally the United States and the European Union have entered into a conformity assessment agreement in an effort to unify assessment conditions between the U.S. and EU. This agreement specifies the conditions by which each Party will accept or recognize results of conformity assessment procedures, produced by the other Party’s conformity assessment bodies or authorities. More information and details of this agreement can be found at http://www.useu.be/docs/mra98.pdf.
Product Certification Some products require certification before a declaration of conformity can be issued. Depending on the nature of the goods, a veterinary health certificate and/or a certificate of origin (for concessionary customs rates, if applicable) can also be required. Products containing genetically modified organisms require special approvals. Government to Government Mutual Recognition Agreements between the U.S. and the EU are listed on the National Institute of Standards and Technology’s Web site (http://ts.nist.gov/ts/htdocs/210/gsig/mra.htm).
Accreditation The Czech Accreditation Institute, Public Service Company, National Accreditation Body, was established by the government of the Czech Republic. It provides services in conformity with legal regulations concerning accreditation. CAI accredits both state and private organizations in all fields of accreditation. Integral European accreditation system, formed by national accreditation bodies, works in conformity with uniform rules. National accreditation bodies provide accreditation in conformity with uniform international standards. The accreditation system is based on the position of EC defined in Global Conception of Testing and Certification. CAI provides unambiguous, objective and independent proficiency testing, in conformity with the requirements of international standards and documents. Further information about the testing can be located on their Web site: www.cai.cz
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The Czech Accreditation Institute is the formal accreditation body for the Czech Republic and is recognized as a member by the International laboratory Accreditation Cooperation (ILAC: www.ilac.org), the International Accreditation Forum (IAF: www.iaf.nu) and the European Accreditation Organization (EA: www.europeanaccrediation.org).
Technical Regulations Technical regulations are mandated by The Czech Office for Standards, Metrology and Testing, a subordinate of the Ministry of Industry and Trade. Through their Web site www.unmz.cz proposed technical regulations are published and are available for review. Final regulations are also published through the Web site. In addition, U.S. Entities have the opportunity to comment on proposed standards regulations through the enquiry point on Fulltexts of the notified draft regulations.
Contact Information Licensing Office Department, Ministry of Industry and Trade Na Frantisku 32, 110 15 Praha 1 Tel: (420) 224 221 828 Fax: (420) 224 212 133 E-mail:
[email protected] www.mpo.cz Czech Office for Standards, Metrology and Testing Gorazdova 24, 128 01 Praha 2, Tel: (420) 224 907 111, Fax: (420) 224 915 064 E-mail:
[email protected] www.unmz.cz Czech Office for Standards, Metrology and Testing Gorazdova 24, 128 01 Praha 2 Tel: (420) 224 907 111 Fax: (420) 224 915 064 E-mail:
[email protected] www.unmz.cz Czech Accreditation Opletalova 41, Novas Mesto, 110 00 Praha 1 Tel: (420) 221 004 501 Fax: (420) 221 004 408 E-mail:
[email protected] www.cai.cz
4.6
THE INVESTMENT CLIMATE
Maintaining an open investment climate has been a key element of the Czech Republic’s transition from a centrally planned to a market economy. The Czech Republic’s stable political and economic environment, its location on the doorstep of the European Union, its low cost structure and its well-qualified labor force make it an attractive destination for foreign investment. In preparation for its accession to the European Union on May 1, 2004, the Czech government is harmonized its laws and regulations with those of the European Union. The Czech government offers attractive incentives for foreign direct investment. Legally, foreign and domestic investors are treated equally. Enforcement of intellectual property rights is improving. www.icongrouponline.com
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Openness to Foreign Investment
An open investment climate has been a key element of the Czech Republic’s transition from a Communist, centrally planned economy to a functioning market economy. Foreign investment is boosting productivity, creating new jobs and raising wages and domestic consumption. It is also contributing to a trend of appreciation in the value of the Czech currency, the crown. This phenomenon is helping to keep inflation low, but threatens the competitiveness of Czech exports. Some unfinished elements in the transition, such as slow and uneven enforcement of contracts by the Czech courts, have adversely affected investment, competitiveness, and company restructuring. There have been numerous major U.S. investments since 1990, and many American firms are looking closely at investing directly into the Czech Republic. The country’s strategic location in the heart of Europe on the doorstep of the EU, its relatively stable political and economic environment, and its well-qualified but relatively low-cost labor force make it an attractive place for foreign direct investment. The government has harmonized most relevant laws with EU legislation and the so-called “acquis communautaire”. This effort has involved positive reforms of the judicial system, civil administration, financial markets regulation, intellectual property rights protection, and many other areas important to investors. While there have been many success stories, a handful of investors have experienced problems, mainly in heavily regulated sectors of the economy such as the media and in the privatization of large state-owned enterprises. Investors also complain about difficulties in enforcing contractual rights, including security interests. The slow pace of the court system is often compounded by judges’ lack of familiarity with commercial cases. Concerns about corruption have been voiced by foreign and domestic businesses alike.
Organizational Structure of Investments Foreign investors can, as individuals or business entities, establish sole proprietorships, joint ventures, and branch offices in the Czech Republic. In addition, the government recognizes joint-stock companies, limited liability companies, general commercial partnerships, limited commercial partnerships, partnerships limited by shares, and associations. The government imposes a Czech language requirement for issuance of the trade licenses needed for most forms of business. A Czech partner can fulfill this requirement.
National Treatment Legally, foreign and domestic investors are treated identically. Both are subject to the same tax codes and laws. The government does not differentiate between foreign investors from different countries, and does not screen foreign investment projects other than in the banking, insurance and defense sectors. Upon accession to the OECD, the Czech government agreed to meet (with a small number of exceptions) the OECD standards for equal treatment of foreign and domestic investors and limitations on special investment incentives. The U.S.-Czech Bilateral Investment Treaty contains specific guarantees of National Treatment and Most Favored Nation treatment for U.S. investors in all areas of the economy other than insurance and real estate.
Exempted Sectors According to CzechInvest, the Czech agency tasked with attracting and facilitating FDI, all sectors of the Czech economy are open to foreign investment. Investors in banking, financial services, insurance and broadcast media sectors must meet certain licensing requirements. Some professions, such as architects, physicians, lawyers and tax advisors, require memberships in the appropriate professional chamber. These licensing and membership requirements apply equally to foreign and domestic investors.
Privatization More than eighty percent of the Czech economy is now in private hands after several waves of privatization of formerly state-owned companies since 1989. Privatization programs have been open to foreign investors. In fact, most major state-owned companies have been privatized with foreign participation. The government evaluates all www.icongrouponline.com
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investment offers for state enterprises. Non-transparent and unfair practices have been alleged in connection with some recent privatizations.
4.6.2
Conversion and Transfer Policies
The Czech crown is fully convertible for business purposes, including all trade transactions and investment transactions with one limitation: non-resident foreign individuals and companies without registered offices in the Czech Republic cannot purchase real estate. Imports or exports of more than 350,000 Czech crowns in cash, travelers’ checks or money orders must be declared at the border. The U.S.-Czech Bilateral Investment Treaty guarantees repatriation of earnings from U.S. investments. A 15% withholding tax is charged on repatriation of profits from the Czech Republic. This tax is reduced under the terms of applicable double taxation treaties. For instance, under the U.S. treaty, the rate is 5% if the U.S. qualifying shareholder is a company controlling more than 10% of the Czech entity, and 15% otherwise. There are no administrative obstacles for removing capital. The law permits convertibility into any currency. The average delay for remitting investment returns meets the international standard of three working days.
4.6.3
Expropriation and Compensation
The Embassy is unaware of any expropriation of foreign investment since 1989. Acquisition of property by the government is now only for public purposes (similar to property condemnation in the United States for public works projects) in a non-discriminatory manner, and in full compliance with international law. It is unlikely that any investor losing property due to a governmental taking would not receive full compensation. Another issue of concern to foreign investors in the Czech Republic is restitution. In 1990 and 1991, the federal government of Czechoslovakia enacted various laws aimed at compensating those people whose property was confiscated by the communist regime during the period of 1948-1989. Under the restitution laws, persons have the right to claim compensation for property taken from them by the communist government. Most claims for restitution of non-agricultural property had to be filed by October 31, 1991, and agricultural property by December 1992. There were additional open seasons for claims in 1994 and 1998 respectively but all deadlines for these claims expired on July 8, 1999. In 2000, however, a new Law to Alleviate Some of the Property Damages Caused by the Holocaust entered into force. It amends the restitution laws allowing the state, subject to certain conditions, to return communal Jewish property, works of art and land illegally seized by the Nazis to entitled Jewish communities and individuals. Because of the large number of restitution claims submitted, it is imperative that foreigners seeking to invest in the Czech Republic first ensure that they have clear title to all land and property associated with potential projects. The process of tracing the history of property and land acquisition can be complex and time-consuming, but it is necessary to ensure clear title. Title insurance is not yet offered in the Czech Republic. Investors participating in privatization of state-owned companies are protected from restitution claims through a binding contract signed with the government.
4.6.4
Dispute Settlement
The Czech Republic has a commercial code and a civil code that are largely based on the German legal system. The commercial code details rules pertaining to legal entities and is analogous to corporate law in the United States. The civil code deals primarily with contractual relationships among parties. Most of these laws were promulgated under the former Czechoslovak government. When the Czech Republic was formed in 1993, the new Czech government
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maintained the previous commercial and civil codes. The laws have been extensively amended since then, but gray areas still remain. Due to the newness and inexperience of the Czech post-communist court system, judicial decisions may vary from court to court. Commercial disputes, particularly those related to bankruptcy proceedings, can drag on for years. However, the judiciary is independent. The need for an improved bankruptcy law remains an important structural impediment. Most observers believe the slow and uneven performance of the courts and weakness of creditors’ legal standing prevents the current bankruptcy law from acting as an effective vehicle for corporate restructuring. The Ministry of Justice has identified bankruptcy reform as a priority and appointed a commission to draft a completely new, effective bankruptcy law. Progress has been slow. The Czech Republic ratified the Convention on the Settlement of Investment Disputes between States and Nationals of Other States in 1993. The U.S.-Czech Bilateral Investment Treaty provides for international arbitration of investment disputes with the state. The Czech Republic has also ratified the New York Convention on the Recognition and Enforcement of Arbitral Awards. As a signatory of the latter convention, it is required to uphold binding arbitration awards in disputes between Czech and foreign parties. However, arbitration of disputes between two Czech corporations outside the Czech Republic is not permitted, even if the owners are foreign. Applications for enforcement of foreign judgments can be made to the Czech courts and will be determined in accordance with a bilateral recognition treaty, if any, or otherwise pursuant to the requirements of Czech law. Judgments rendered in other EU countries are enforceable in accordance with applicable EU regulations.
4.6.5
Investment Incentives
In 1998 the Czech government approved a package of incentives to attract investment. The incentives are offered to foreign and domestic firms that make a $10 million manufacturing investment through a newly registered company. The package includes relief from corporate taxes for up to ten years, job-creation grants, re-training grants and opportunities to obtain low-cost land. A tax incentive is also available for expansion of an existing manufacturing investment. Subsidies are offered for services centers for software development, customer service and repairs. More recently, subsidies to attract high technology and research and development centers have been added. Tax deductions for new machinery, real estate tax relief, job creation grants, re-training grants, simplified customs procedures and duty-free import of machinery are also available under certain conditions to qualified companies. The incentives were developed with the assistance of the EU in order to ensure their compatibility with EU rules on industrial subsidies. The Czech Republic is in compliance with WTO TRIMs requirements. There are currently no general performance requirements imposed on foreign firms for establishing, maintaining, or expanding their investments, except in connection with the incentives described above. These performance requirements generally relate to the amount of investment or hiring of employees if special job-creation grants are received with the incentive package. For more information contact: CzechInvest Director Mr. Martin Jahn Stepanska 15, 120 00 Praha 2, Czech Republic Tel: 420-296 342 501 Fax: 420-296 342 502 E-mail:
[email protected] www.czechinvest.org Special performance requirements are negotiable.
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Foreign workers in the Czech Republic must obtain permits and visas in advance of their taking up employment and residence. The process of obtaining the required permits can be time-consuming.
4.6.6
Right to Private Ownership and Establishment
The right of foreign and domestic private entities to establish and own business enterprises is guaranteed by law in the Czech Republic. Enterprises are permitted to engage in any legal activity with the previously noted limitations in some sensitive sectors. Personal ownership of real estate by non-resident foreign individuals is not permitted, but since January 1, 2002, foreign companies registered to do business in the Czech Republic and Czech branches of foreign entities may own real estate, other than agricultural and forest land. Since May 1, 2004, EU, U.S. and some other nationals can purchase real property if they comply with temporary residence requirements. Czech legal entities, including 100% foreign-owned subsidiaries, may own real estate without any limitations.
4.6.7
Intellectual Property Risks
Existing legislation guarantees protection of all forms of property rights, both intellectual and physical. Secured interests in land (mortgages) and in personal property are permitted. Government subsidy programs are making mortgage financing more accessible, and consumers are becoming more used to using both secured and unsecured forms of credit. According to U.S. lawyers in the Czech Republic, enforcing judgments and foreclosing security interests in land and personal property can still be difficult in practice. Major amendments to the Commercial Code came into force in 2001 that strengthen protection of creditors and minority shareholders. The law includes detailed provisions for mergers and places time limits on decisions by the authorities on registering of companies. New laws on auditing and on accounting were also enacted. These laws include the use of international accounting standards (IAS) for consolidated corporate groups. The Czech Republic is a signatory to the Bern, Paris, and Universal Copyright Conventions. In 2001, the government ratified the WIPO Copyright Treaty and the WIPO Treaty on Performances and Phonograms. Domestic legislation protects all intellectual property rights, including patents, copyrights, trademarks, and semiconductor chip layout design. Amendments to the trademark law and the copyright law have brought Czech law into compliance with relevant EU directives and WTO TRIPs requirements. Changes to the civil procedure code, effective January 1, 2001, provide for ex parte search and seizure in enforcement actions. The Czech Republic increased copyright protection for literary works from 50 to 70 years, effective December 1, 2000, and boosted the powers of the customs service and the Czech Commercial Inspection to seize counterfeit goods. The Embassy continues to work with U.S. industry and Czech government officials to further improve enforcement of intellectual property rights.
4.7
TRANSPARENCY OF THE REGULATORY SYSTEM
Tax, labor, environment, health and safety, and other laws generally do not distort or impede investment. Policy frameworks are consistent with a market economy. All laws and regulations are published before they enter into force. Opportunities for prior consultation on pending regulations exist, and all interested parties, including foreign entities, can participate. A biannual governmental plan of legislative and non-legislative work is available on the Internet, along with information on draft laws and regulations (often only in Czech language). Comments can be and are made by business associations, consumer groups and other non-governmental organizations, including the American Chamber of Commerce.
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However, bureaucracy and unnecessary red tape remain a source of complaints by both domestic and foreign investors. Delays and allegations of corruption are common, especially in the process of registering companies and changes to corporate structure, and are of particular concern to foreign companies operating in the Czech Republic. In content and principle, Czech competition policy meets OECD standards. A new Act on the Protection of Economic Competition entered into force in 2001, adopting rules consistent with EU competition policy as regards restrictive agreements, abuse of dominant position and merger control.
4.7.1
Capital Market Risks
The government privatized the last state-owned bank in 2001 and foreign-controlled banks now manage 90% of total banking assets. The banking sector has recovered from the 1998-99 recession, the poor payment discipline of many of the banks’ clients, and non-competitive loans offered in the early 1990s. Stricter oversight by the central bank has been imposed. Commercial banks have returned to profitability after posting losses in 1999. Foreign investors have access to bank credit on the local market, and credit is generally allocated on market terms. In 2002, the banks for the first time established a mechanism for sharing credit histories of borrowers. The Czech securities market is still handicapped by a poor reputation generated by several years of lax regulation, fraud and scandals. Only a handful of stocks are actively traded. The first successful initial public offering of a company’s shares since the stock market opened in 1992 took place in 2004. In 1998 the government created a Securities and Exchange Commission to function as capital market watchdog. The Commission has made important strides in establishing a regulatory framework for Czech capital markets and enforcing new rules. It has employed a large number of new staff. A new securities law was adopted in 2001 to improve regulation of brokers and dealers. Legislation adopted in 2002 gives the SEC more flexibility in issuing guidelines and requiring reporting of information.
4.7.2
Political Violence
The risk of political violence in the Czech Republic is extremely low. The Czech lands have never had a history of political violence or terrorism in modern times. Two recent historic political changes -- the “Velvet Revolution” which ended the Communist era in 1989 and the division of Czechoslovakia into the Czech Republic and Slovakia in 1993 - occurred without loss of life or significant violence.
4.7.3
Corruption
Current law makes both giving and receiving bribes criminal acts, regardless of the actor’s nationality. Jail sentences have been increased to up to eight years for officials, with stiffer penalties for bribery previously enacted by Parliament. Bribes cannot be deducted from taxes. Law enforcement authorities are responsible for combating corruption. These laws are applied equally to Czech and foreign investors. The Czech Republic ratified the OECD anti-bribery convention in January 2000. While there has been no lack of public accusations and suspicions of bribery, only a few cases have reached the prosecution and conviction stage. Allegations of corruption are most pervasive in connection with the courtcontrolled system of company registration and the police. Such allegations have also been raised in the course of recent privatizations and government procurements. A new government procurement law, required for EU accession, is intended to curb illegal activities in this sphere. The Transparency International chapter in the Czech Republic
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actively conducts public information campaigns through distribution of posters and has given numerous broadcast and print media interviews on corruption and bribery cases.
4.7.4
Bilateral Investment Agreements
The former government of Czechoslovakia signed a bilateral investment treaty (BIT) with the United States, which came into effect in 1992. The Czech Republic adopted this treaty after the split with Slovakia. To date, 70 countries have signed and ratified similar agreements with the Czech Republic. They include: Australia, Austria, BelgiumLuxembourg, Bulgaria, Canada, China, Denmark, Finland, France, Germany, Greece, Hungary, Israel, Indonesia, Italy, Jordan, Kazakhstan, Lebanon, North and South Korea, Mongolia, Norway, Paraguay, Poland, Russia, Slovakia, South Africa, Spain, Sweden, Switzerland, Thailand and the United Kingdom. A bilateral U.S.-Czech Convention on Avoidance of Double Taxation has been in force since 1993.
4.7.5
OPIC and Other Investment Insurance
Finance programs of the Overseas Private Investment Corporation (OPIC), including investment insurance, have been available in the Czech Republic since 1991. Investors are urged to contact OPIC’s offices in Washington directly for up-to-date information regarding availability of services and eligibility. The OPIC InfoLine (202) 3368799 offers general information 24 hours a day. Application forms and detailed information may be obtained from OPIC, 1100 New York Avenue, NW, Washington D.C. 20527. The Czech Republic is a member of the Multilateral Investment Guarantee Agency (MIGA).
4.7.6
Labor
The wide availability of educated, low-cost labor on the doorstep of the more expensive Western European labor market is a major attraction for foreign investors, particularly those looking to invest in manufacturing industries. There are currently no significant shortages of specialized labor skills, though foreign investors still cite weaknesses in middle-management levels. Various factors, including rigidities in the housing market, reduce the mobility of Czech workers within the country. By law, all workers have the right to strike once mediation efforts have been exhausted, with the exception of workers in sensitive positions (nuclear power plant operators, military, police, etc.) Significant labor unrest remains rare, particularly in the private sector. Public sector unions, notably the rail workers and health workers, have staged strikes when the government tried to limit public sector wage increases. Increased labor activity has been noted in mining and steel industries due to current economic problems. Workers in the Czech Republic have the legal right to form and join unions of their own choosing without prior authorization. Currently, about one-third of the total labor force is a member of some labor organization. The overall number of union members has fallen sharply since 1991, reflecting the fact that union membership is no longer compulsory. The Ministry of Labor and Social Affairs sets minimum wage standards. On January 1, 2001, a new labor code entered into force, harmonizing domestic rules with the EU. The standard workweek is 40 hours. Caps exist for overtime. Workers are assured 30 minutes of paid rest per work day and annual leave of at least four weeks per year.
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Free Trade Zone Options
Czech law permits foreign investors involved in joint ventures to take advantage of commercial or industrial customs-free zones into which goods may be imported and later exported without depositing customs duty. Duties need be paid only in the event that the goods brought into the free zone are introduced into the local economy. The investment incentive package also permits duty-free import of high tech goods and creation of additional foreigntrade zones. Currently authorized foreign trade zones in the Czech Republic are Cheb, Ostrava, Pardubice, Prague (2), Zlin, Trinec, Bor u Tachova, Frantiskov nad Ploucnici and Hradec Kralove. Rules for operations within a commercial or industrial customs-free zone are the same as in the EU.
4.8
TRADE AND PROJECT FINANCING
Although smaller sales of U.S. goods up to about US$50,000 are common, above this threshold many small Czech businesses cannot afford or secure financing. An U.S. firm’s ability to provide or arrange financing is often key to building significant market share.
4.8.1
Trade Finance
The most elegant solution for exporters of consumer goods and industrial components may be to offer your distributor a container of product on consignment, and to enable your distributor to use proceeds from the first container to finance additional containers. For higher-value items, financing is tricky, yet crucial. Lease finance is an increasingly popular approach for equipment, vehicles, and other large capital items. Food exporters should consider the U.S. Department of Agriculture’s GSM program. Non-food exporters should contact the U.S. Eximbank and Small Business Administration for information about their trade financing programs. In addition, a number of U.S. states and port authorities may offer financing assistance.
4.8.2
Methods of Payment
Most Czech firms use prepayment or partial prepayment with the balance due upon delivery or net 30-day terms. On shipments under US$2,000, consider asking the buyer to pay by credit card. Czech firms are familiar with letters of credit, documentary collections, and wire transfer/cash in advance. Most would prefer not to use a letter of credit due to its high cost.
4.8.3
Financing Projects
Because most Czech firms and government agencies lack expertise in assembling financing packages for major projects or acquisitions, your ability to aid them in this process will be a critical part of the sales process. In some cases, your willingness to help assemble financing will put you ahead of competitors; in still more cases, your ability to put together a financing package will create a market that otherwise would not exist. A very good first step in pursuing a large project is to contact the U.S. Trade and Development Authority for information about their grants to fund major project feasibility studies. These first-stage grants -- that can go as high as $1 million -- are often the best way to get a major project moving.
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When looking beyond the first stage into project development, your firm will need to work with Czech counterparts to assemble a complex package from several sources. Besides private financing from banks or other sources, possible sources of funding include: •
U.S. Eximbank (to finance U.S. equipment purchases)
•
Local bond offerings (for municipal and government projects)
•
Funding from International Finance Institutions (such as the European Investment Bank and the European Bank for Reconstruction and Development) or from the European Union’s structural and cohesion funds.
4.8.4
Foreign Exchange Control Risks
The Czech crown is fully convertible and there are no foreign exchange controls affecting trade in goods.
4.8.5
The Banking System
U.S. firms will be able to choose between a number of foreign banks and large local banks offering highly professional service. Foreign and large domestic banks (such as Komercni and CSOB) offer corporate checking accounts and debit cards. Most payments are made by bank transfer; checks are rarely used. Internal bank transfers take one day; domestic transfers take three days; transfers between major U.S. and Czech banks usually take less than a week. Some Czech commercial banks offer brokerage, investment advisory and underwriting services.
4.8.6
Financial Contact Information
Local Commercial Banks with Correspondent U.S. Banks Ceskoslovenska obchodni banka (CSOB) Ing Miroslav Klima, International Financing Tel: (+420) 224 118 034 Fax: (+420) 224 113 367 E-mail:
[email protected] www.csob.cz Komercni banka Ing Jana Svabenska, International Financing Tel: (+420) 222 432 018 Fax: (+420) 224 229 330 E-mail:
[email protected] www.koba.cz Zivnostenska banka Mr. Petr Merezko, Structured Finance Tel: (+420) 224 127 204 Fax: (+420) 224 127 273 E-mail:
[email protected] www.ziba.cz
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Citibank Mr. Miroslav Lukac, Corporate Finance Tel: (+420) 233 061 837, Fax: (+420) 233 061 614 E-mail:
[email protected] www.citibank.cz GE Capital Bank a.s. Ms. Sona Slavceva, Financial Director Tel: (+420) 224 441 111 Fax: (+420) 224 441 500 E-mail:
[email protected] www.gecb.cz
U.S. Venture Capital Funds Renaissance Partners Mr. Dalibor Jerabek, Executive Officer Tel: (+420) 222 252 407 Fax: (+420) 222 251 791 E-mail:
[email protected] www.rp.cz Venture Investors Mr. Michal Rostock, Investment Banking Tel: (+420) 221 975 501 Fax: (+420) 221 975 502 E-mail:
[email protected] www.ventureinvestors.cz Benson Oak Mr. Gabriel Eichler, Director Tel: (+420) 222 512 422 Fax: (+420) 222 520 334 E-mail:
[email protected] www.bensonoak.com
Czech Government Sources Environmental Fund Ms. Radka Bucilova, Director Tel: (+420) 267 994 301 Fax: (+420) 272 936 585 E-mail:
[email protected] www.sfzp.cz CzechInvest Mr. Martin Jahn, General Director Tel: (+420) 296 342 500 Fax: (+420) 296 342 502 E-mail:
[email protected] www.czechinvest.org CzechInvest offers numerous financial and other incentives for foreign companies beginning major projects in the Czech Republic. www.icongrouponline.com
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Financial and Lending Institutions Export-Import Bank of the United States Tel: (800) 565-EXIM (3946) International Business Development Division Tel: (202) 565-3900 Fax: (202) 565-3731 NIS/Eastern Europe Fax: (202) 565-3816 Czech Export Bank in Prague Miroslava Hrncirova, Deputy Manager Tel: (+420) 222 843 111 Fax: (+420) 224 226 162
Offices of International Financial Institutions International Finance Corporation (IFC) Harold Rosen, Director, Central & Southern Europe Tel: (202) 473-8841 E-mail:
[email protected] Esteban Altschul, Senior Investment Officer Tel.: (202) 473-5336 Fax: (202) 974-4314 Milos Vecera Tel: (+420) 224 401 402 Fax: (+420) 224 401 410 E-mail:
[email protected] www.ifc.org The International Finance Corporation (IFC), part of the World Bank Group, offers long-term project finance. Multilateral Investment Guarantee Agency Roger Pruneau, Vice President, Guarantees Tel: (202) 473-6168 Stine Andresen, Manager: Eastern Europe Tel.: (202) 473-6157 Fax: (202) 522-2630. E-mail:
[email protected] www.miga.org MIGA provides insurance to cover the risk of currency transfer, expropriation, war, and civil disturbance, and breach of contract by the host government.
European Union (EU) Programs European Commission Brussels: Mr. Ruud van Enk, DG IA Tel: (+32 2) 2995-071 Fax: (+32 2) 2957-502 Prague: Stephen Collins, Head of Investment Section www.icongrouponline.com
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Tel: (420 2) 2431-2835 Fax: (420 2) 2431-2850 E-mail:
[email protected] http://europa.eu.int EU funding is being used to build infrastructure, strengthen public administration, adopt EU legislation, and promote democratic institutions. European Bank for Reconstruction and Development (EBRD) London: Alice Davenport, SCO Tel: (+44 171) 588-4027/28, Fax: (+44 171) 588-4026 E-mail:
[email protected], Alain Pilloux, Director, PCSB Team London HQ Tel: (+44 171) 338-6561 Fax: (+44 171) 338-7199 Prague: Tel: (+420) 224 239 070 Fax: (+420) 224 233 077 www.ebrd.org Like the IFC, EBRD can either work independently, or arrange co-financing packages in conjunction with other multilateral government and private institutions. European Investment Bank Accession countries contact: Mr. Paul Gerd Löser Tel.: (+35 2) 43 79 31 39 Fax: (+35 2) 43 79 3189 E-mail:
[email protected] http://www.eib.org EIB is the EU long term financing institution; its goal is to contribute towards the integration, balanced development and economic and social cohesion of the Member Countries. PHARE Funding Advisor, U.S. Mission to the EU E-mail:
[email protected] www.buyusa.gov/europeanunion The PHARE program is one of the three pre-accession instruments financed by the European Union to provide financing for new Central and Eastern European countries in their preparations for joining the European Union. EU
4.9
TRAVEL RISKS
Visitors will find traveling in the Czech Republic to be much like traveling in Western Europe, except that costs are lower for food and transport, particularly in the off-season (November through April). Basic English is widely spoken in most hotels and restaurants. International hotels and restaurants catering to foreigners accept major credit cards, although smaller hotels and restaurants may not. Currency exchange is widely available, as are Korunadispensing ATM’s, that accept most U.S. bankcards. Major cities have Western-style hotels, though you may consider reducing costs (and getting more local flavor) by staying in smaller, non-business hotels. Many restaurants offer a wide variety of international cuisines. Prague menus are usually in Czech and English. Tap water is safe, though metallic tasting. Bottled water is widely available; infants up to one year old should be given special “infant water.”
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Prague has good Western-style medical clinics and English-speaking doctors and dentists. For major operations and complicated illnesses, most Westerners return to the USA or go to nearby Germany or the U.K. We recommend travel insurance sufficient to cover costs of medical evacuation out of country. Prague and most major outlying cities have pharmacies that stock most Western medicines or that can order specialized prescriptions in 24 hours. U.S. prescription drugs often have different names in Europe. Travelers should carry prescriptions noting generic names. Keep all prescription drugs in original containers to avoid problems with Customs officials. In winter, Prague air pollution can pose problems for those with respiratory conditions. Local telephone and mail services are good, reliable and inexpensive. U.S. long distance operators serve Prague through direct access numbers. Express mail is available through several companies. In central Prague, visitors will often find walking faster (and more relaxing) than auto travel. The city also has fine, usually quick, public transit to most points. For trips outside Prague, we recommend hiring a car for the day. The domestic train network is extensive and can be slow.
4.9.1
Local Business Practices
Because Prague is a small, tightly knit city, word-of-mouth reputation is extremely important, and news about you -good or bad -- will spread quickly. Czechs are more reserved than Americans, and will be nervous about a typical American “let’s get down to business” approach. Cold-calls and hard sell tactics will be viewed as amateurish and even rude. Start slowly by building a few good relationships. Let your new Czech friends introduce you to their friends, and soon you will have a good business network. An attempt to take the city by storm with a flurry of quick meetings and barrage of E-mails is more likely to arouse suspicion than business. Czechs prefer to get to know you - to learn about your background and your company, and then, if they are comfortable with you, get down to dealmaking around the dessert course, or even at a follow-up meeting. Most Czechs want to build long-term, two-way business relationships, and will be put off by too much emphasis on an immediate sale. Americans may feel that Czech business people are not warm and friendly. Czechs do not smile as a social signal of greeting, as Americans, Britons, and many other Westerners do, but only when they are amused or pleased. This can create a false impression that Czechs are cold or unfriendly. Also, Czechs are a more formal people than are Americans, and a serious demeanor is regarded as a sign of respect for the visitor and the business being transacted. The business custom is to be punctual - even early - for appointments and engagements. It is best to start arranging meetings several weeks before you visit, as Czechs are reluctant to arrange impromptu meetings at the last minute. Czechs dress more formally than their American counterparts, preferring dark business suits and ties, and often vests. While a blazer or sports jacket is sometimes acceptable, Czechs find “American casual” a turn-off. Business partners do not usually call each other by their first names, and Czechs may be offended if their foreign visitors address them by their first names without first being invited to do so. It may take several meetings to establish a sense of rapport and a more relaxed attitude. Czechs are very gracious and will open a meeting with the offer of coffee, tea, water, juice, and cookies when they host business visitors. It is polite to accept at least a glass of water. Coffee and tea will be served in real china cups and juice or water in glass or crystal - never plastic or Styrofoam. Business luncheons normally are more formal and leisurely than in the United States. Even if dining alone with one business contact, expect to order multiple courses and do not expect the lunch to be finished in less than two hours. Rushing through lunch because of the press of business is considered ill mannered. Working breakfasts are not common in the Czech Republic. Although the Czechs regard the custom as an amusing American oddity, they are also very amenable to attending, as an offer of food is considered gracious and the typical Czech working day starts early. www.icongrouponline.com
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Travel Issues
The Department of State has issued multiple public announcements since September 11, 2001 cautioning Americans worldwide to maintain a level of vigilance against potential terrorist incidents. All Americans are advised to be continually aware of their surroundings and be alert to suspicious activities or individuals. There are no outstanding travel advisories warning against travel to the Czech Republic. Prague and other Czech cities are very safe by U.S. standards, but visitors are encouraged to exercise common sense precautions and be particularly wary of Prague’s famously efficient pickpockets and occasional mugging/violent street crime. Be careful in and around train stations and when boarding and exiting trams. Taxi drivers, particularly those at train stations and those hailed on the street, are notorious for overcharging; sometimes-becoming abusive or even violent if exorbitant fares are not paid. We suggest you phone for a taxi (your hotel can advise on honest drivers) or have the hotel arrange transport. If you must hail a taxi on the street, agree on an estimated fare with the driver in advance. Consult the State Department’s Web site (www.travel.state.gov) for updates and current travel advisories.
Visa Requirements U.S. passport holders (not U.S. resident aliens or refugee document holders) may visit the Czech Republic for tourism without a visa for 90 days. For this purpose, “business” is defined as consultations, negotiations, etc., but not employment reimbursed from an employer located in the Czech Republic. For stays of longer than 90 days or for purposes other than tourism/business, a new law requires any foreigner to obtain a visa in advance from a Czech Embassy or Consulate. Foreigners are no longer allowed to change their status from tourist to student or worker, or to extend their stay while still in the Czech Republic. Instead, a visa must be obtained from outside the country. The Czech Government expects that visa processing may take two or more months. Details on how to apply for a visa are available from the Web sites of the Czech Embassy in Washington (www.mzv.cz/washington), or from the Czech Ministry of Foreign Affairs (www.mzv.cz).
Entry of Computers, Software, and Exhibit Materials We are not aware of difficulties in bringing in computers, software, or exhibit materials.
4.9.3
Holidays January 1 (Varies) May 1 May 8 July 5 July 6 September 28 October 28 November 17 December 24 December 25 December 26
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New Year’s Day Easter Monday Labor Day Liberation Day Cyril & Methodius Day Jan Hus Day Statehood Day Czech Founding Day Struggle for Freedom Day Christmas Eve Christmas Day St. Stephen’s Day
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When scheduling meetings or events to which Czech business guests are invited, it is best to avoid Friday afternoon (and Friday morning, if possible), as many Czechs have country houses to which they travel as early as possible on Friday. Czechs regard weekends and holidays as near-sacrosanct family time, and they avoid allowing business to intrude on this time. As is the case in much of Europe, it is harder to make business appointments and contacts in the Czech Republic during August and close to major holidays, such as Christmas or Easter week. The workweek is the standard 40 hours (Monday through Friday), although Czech working days tend to start - and therefore, end - earlier in many firms.
4.9.4
Country Data
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Population (2003): 10,211,455
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Population Growth Rate (2001): -1.7 percent
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Religions (2001): Roman Catholic (26.8), Protestant (Evangelical Church of Czech Brethren) (1.1 %), No religious affiliation (59.0%)
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Government System: Parliamentary Democracy
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Language: Czech
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Length of Work Week: 40 hours
Sources of Data: Statistical Yearbook, Research Institute of Labor.
4.10
KEY CONTACTS
4.10.1
U.S. Contacts
American Embassy in Prague H.E. William Cabaniss, Ambassador Trziste 15, 118 01 Praha 1 Tel: (+420) 257 530 663 Fax: (+420) 257 530 583 Web site: www.usembassy.cz Ms. Lisa Helling, Press Attaché Tel: (+420) 257 530 663, ext.2401 Fax: (+420) 257 530 223 Mr. Richard Appleton, Consul General Tel: (+420) 257 530 663 Fax: (+420) 257 534 028 Mr. Robert R. Kiene, Economic Officer Tel: (+420) 257 530 663 Fax: (+420) 257 532 717
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U.S. Commercial Service Tel.: (+420) 257 531162 Fax: (+420) 257 531 165 Web sites: www.export.gov, www.cscentraleurope.org
U.S. Department of Commerce Web site: http://www.mac.doc.gov/ceebic/ Web site for international transactions: www.buyusa.gov/czechrepublic/en Mr. Richard Steffens, Commercial Counselor E-mail:
[email protected] Mr. Mark Russell, Commercial Attaché E-mail:
[email protected] Dr. Hana Obrusnikova Sectors: energy, aerospace, engineering/construction E-mail:
[email protected] Ing. Zdenek Svoboda Sectors: auto parts/accessories, industrial parts/services, microelectronics E-mail:
[email protected] Mr. Ed Zawadzki Sectors: financial and business services, education/training, real estate E-mail:
[email protected] Ms. Lud’a Taylor Sectors: telecommunications, e-commerce, IT E-mail:
[email protected] Ms. Irena Michlickova Sectors: film, consumer goods, food processing E-mail:
[email protected] Mr. Ivo Hofman Sectors: security equipment, sporting goods E-mail:
[email protected] Ms. Veronika Novakova Sectors: environmental products/services, medical/dental/pharmaceutical E-mail:
[email protected] Ms. Petra Choteborska, Agricultural Specialist Foreign Agricultural Service Tel: (+420) 257 531 170 Fax: (+420) 257 531 173 E-mail:
[email protected], web: www.fas.usda.gov
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U.S. Department of Commerce Advocacy Center Ms. Pat Nugent Tel: 202-482-3392 Web site: www.ita.doc.gov/td/advocacy
U.S. Department of Commerce Central and Eastern Europe Business Information Center (CEEBIC) Mr. Sean Timmins Tel: 202 482-2645 Fax: 202 482-3898 E-mail:
[email protected];
[email protected] Web site: www.export.gov/ceebic
American Chamber of Commerce Mr. Weston Stacey, Executive Director Dusni 10, 110 00 Prague 1 Tel: (+420) 222 329 430 Fax: (+420) 222 329 433 E-mail:
[email protected] Web site: www.amcham.cz
4.10.2
Czech Investment Contacts
American Center Plzen Ms. Gabriela Pomplova, Director Dominikanska 9, 301 12 Plzen, Czech Republic Tel: (+420) 377 237 722 Fax: (+420) 377 237 725 E-mail:
[email protected]
CzechTrade Mr. Martin Tlapa, General Director Dittrichova 21, P.O. Box 76, 128 01 Praha 2 Tel: (+420) 224 907 500 Fax: (+420) 224 907 503 E-mail:
[email protected] Web site: www.czechtrade.cz CzechTrade Chicago Ms. Ivana Ingram, Director Suite 938 The Merchandise Mart, Chicago, IL 60654 Tel: (312) 644-1790 Fax: (312) 527-5544 E-mail:
[email protected] Web site: www.czechtrade.cz/en/ CzechTrade USA, Miami Mr. Roman Matyas
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5805 Blue Lagoon Drive, Suite 450, Miami Fl 331 26, Tel. + Fax: (305) 261-6313, (305) 261-6314 E-mail:
[email protected] Web site: www.czechtrade.cz/en/
CzechInvest CzechInvest, the Czech Agency for Foreign Investment Mr. Martin Jahn, General Director Mr. Robert Hejzak, Director, Marketing Department Stepanska 15,120 00 Prague 2 Tel: (420) 296 342 500 Fax: (420) 296 342 502 E-mail:
[email protected] Web site: www.czechinvest.org CzechInvest, U.S. Office Mr. Robert Fredrich Suite 938, The Merchandise Mart, 200 World Trade Center, Chicago, IL 60654 Tel: (312) 245-0180 Fax: (312) 245-0183 E-mail:
[email protected] Web site: www.czechinvest.org Czech Invest, U.S. Office Ms. Karolina Bockova Suite 107-F, 51 East Campbell Avenue, Campbell, CA 95008 Tel: (408)376 45 55 Fax: (408)376 45 57 E-mail:
[email protected] Web site: www.czechinvest.org CzechInvest, EU Grants Depatment Mr. Radim Konecny Stepanska 15, 120 00 Prague 2 Tel:(420) 296 342 492 Fax: (420) 296 342 502 E-mail:
[email protected] Web site: www.czechinvest.org
4.10.3
Czech Government Contacts
Economic Chamber of the Czech Republic Mr. Jaromir Drabek, President Freyova 27,190 00 Prague 9 Tel: (420) 224 096 111, (420) 224 096 252 Fax: (420) 224 096 221, (420) 224 096 257 E-mail:
[email protected] Web site: www.hkcr.cz Czech Office for Standards, Metrology and Testing www.icongrouponline.com
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Mr. Alexander Safarik-Pstrosz, President Gorazdova 24, 128 01 Prague 2 Tel: (+420) 224 915 489 Fax: (+420) 224 915 064 E-mail:
[email protected] Web site: www.unmz.cz General Directorate of Customs Mr. Zdenek Richtr, General Director Budejovicka 7, 140 96 Praha 4 Tel: (+420) 261 331 111 Fax: (+420) 261 332 900 E-mail:
[email protected] Web site: www.mfcr.cz Czech Confederation of Industry Mr. Jaroslav Mil, General Director Mikulandska 7, 113 61 Praha 1 Tel: (+420) 224 915 250 Fax: (+420)224 915 252 E-mail:
[email protected] Web site: www.spcr.cz Ministry of Finance Statistics Web site: www.mfcr.cz
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5 5.1
DISCLAIMERS, WARRANTEES, AND USER AGREEMENT PROVISIONS DISCLAIMERS & SAFE HARBOR
Summary Disclaimer. This publication ("Report") does not constitute legal, valuation, tax, or financial consulting advice. Nor is it a statement on the performance, management capability or future potential (good or bad) of the company(ies), industry(ies), product(s), region(s), city(ies) or country(ies) discussed. It is offered as an information service to clients, associates, and academicians. Those interested in specific guidance for legal, strategic, and/or financial or accounting matters should seek competent professional assistance from their own advisors. Information was furnished to Icon Group International, Inc. ("Icon Group"), and its subsidiaries, by its internal researchers and/or extracted from public filings, or sources available within the public domain, including other information providers (e.g. EDGAR filings, national organizations and international organizations). Icon Group does not promise or warrant that we will obtain information from any particular independent source. Published regularly by Icon Group, this and similar reports provide analysis on cities, countries, industries, and/or foreign and domestic companies which may or may not be publicly traded. Icon Group reports are used by various companies and persons including consulting firms, investment officers, pension fund managers, registered representatives, and other financial service professionals. Any commentary, observations or discussion by Icon Group about a country, city, region, industry or company does not constitute a recommendation to buy or sell company shares or make investment decisions. Further, the financial condition or outlook for each industry, city, country, or company may change after the date of the publication, and Icon Group does not warrant, promise or represent that it will provide report users with notice of that change, nor will Icon Group promise updates on the information presented. Safe Harbor for Forward-Looking Statements. Icon Group reports, including the present report, make numerous forward-looking statements which should be treated as such. Forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995, and similar local laws. Forward-looking statements involve known and unknown risks and uncertainties, which may cause a company's, city's, country's or industry's actual results or outlook in future periods to differ materially from those forecasted. These risks and uncertainties include, among other things, product price volatility, exchange rate volatility, regulation volatility, product demand volatility, data inaccuracies, computer- or software-generated calculation inaccuracies, market competition, changes in management style, changes in corporate strategy, and risks inherent in international and corporate operations. Forward-looking statements can be identified in statements by the fact that they do not relate strictly to historical or current facts. They use words such as "anticipate,'' "estimate," "expect,'' "project,'' "intend,'' "plan,'' "feel", "think", "hear," "guess," "forecast," "believe," and other words and terms of similar meaning in connection with any discussion of future operating, economic or financial performance. This equally applies to all statements relating to an industry, city, country, region, economic variable, or company financial situation. Icon Group recommends that the reader follow the advice of Nancy M. Smith, Director of SEC's Office of Investor Education and Assistance, who has been quoted to say, "Never, ever, make an investment based solely on what you read in an online newsletter or Internet bulletin board, especially if the investment involves a small, thinly-traded company that isn't well known … Assume that the information about these companies is not trustworthy unless you can prove otherwise through your own independent research." Similar recommendations apply to decisions relating to industry studies, product category studies, corporate strategies discussions and country evaluations. In the case of Icon Group reports, many factors can affect the actual outcome of the period discussed, including exchange rate volatility, changes in accounting standards, the lack of oversight or comparability in accounting standards, changes in economic conditions, changes in competition, changes in the global economy, changes in source data quality, changes in reported data quality, changes in methodology and similar factors. Information Accuracy. Although the statements in this report are derived from or based upon various information sources and/or econometric models that Icon Group believes to be reliable, we do not guarantee their accuracy, reliability, quality, and any such information, or resulting analyses, may be incomplete, rounded, inaccurate or condensed. All estimates included in this report are subject to change without notice. This report is for informational purposes only and is not intended as a recommendation to invest in a city, country, industry or product area, or an offer or solicitation with respect to the purchase or sale of a security, stock, or financial instrument. This report does not take into account the investment
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objectives, financial situation or particular needs of any particular person or legal entity. With respect to any specific company, city, country, region, or industry that might be discussed in this report, investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the information in this report. Investing in either U.S. or non-U.S. securities or markets entails inherent risks. In addition, exchange rate movements may have an effect on the reliability of the estimates provided in this report. Icon Group is not a registered Investment Adviser or a Broker/Dealer.
5.2
ICON GROUP INTERNATIONAL, INC. USER AGREEMENT PROVISIONS
Ownership. User agrees that Icon Group International, Inc. ("Icon Group") and its subsidiaries retain all rights, title and interests, including copyright and other proprietary rights, in this report and all material, including but not limited to text, images, and other multimedia data, provided or made available as part of this report ("Report"). Restrictions on Use. User agrees that it will not copy nor license, sell, transfer, make available or otherwise distribute the Report to any entity or person, except that User may (a) make available to its employees electronic copies of Report, (b) allow its employees to store, manipulate, and reformat Report, and (c) allow its employees to make paper copies of Report, provided that such electronic and paper copies are used solely internally and are not distributed to any third parties. In all cases the User agrees to fully inform and distribute to other internal users all discussions covering the methodology of this Report and the disclaimers and caveats associated with this Report. User shall use its best efforts to stop any unauthorized copying or distribution immediately after such unauthorized use becomes known. The provisions of this paragraph are for the benefit of Icon Group and its information resellers, each of which shall have the right to enforce its rights hereunder directly and on its own behalf. No Warranty. The Report is provided on an "AS IS" basis. ICON GROUP DISCLAIMS ANY AND ALL WARRANTIES, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, RELATING TO THIS AGREEMENT, PERFORMANCE UNDER THIS AGREEMENT, THE REPORT. Icon Group makes no warranties regarding the completeness, accuracy or availability of the Report. Limitation of Liability. In no event shall Icon Group, its employees or its agent, resellers and distributors be liable to User or any other person or entity for any direct, indirect, special, exemplary, punitive, or consequential damages, including lost profits, based on breach of warranty, contract, negligence, strict liability or otherwise, arising from the use of the report or under this Agreement or any performance under this Agreement, whether or not they or it had any knowledge, actual or constructive, that such damages might be incurred. Indemnification. User shall indemnify and hold harmless Icon Group and its resellers, distributors and information providers against any claim, damages, loss, liability or expense arising out of User's use of the Report in any way contrary to this Agreement. © Icon Group International, Inc., 2007. All rights reserved. Any unauthorized use, duplication or disclosure is prohibited by law and will result in prosecution. Text, graphics, and HTML or other computer code are protected by U.S. and International Copyright Laws, and may not be copied, reprinted, published, translated, hosted, or otherwise distributed by any means without explicit permission. Permission is granted to quote small portions of this report with proper attribution. Media quotations with source attributions are encouraged. Reporters requesting additional information or editorial comments should contact Icon Group via email at
[email protected]. Sources: This report was prepared from a variety of sources including excerpts from documents and official reports or databases published by the World Bank, the U.S. Department of Commerce, the U.S. State Department, various national agencies, the International Monetary Fund, the Central Intelligence Agency, and Icon Group International, Inc.
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END
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