Recycling Equipment in Bulgaria: 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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Table of Contents 1
INTRODUCTION & METHODOLOGY.............................................................................1
1.1
What Does This Report Cover?
1
1.2
How to Strategically Evaluate Bulgaria
1
1.3
Latent Demand and Accessibility in Bulgaria
3
2 2.1
RECYCLING EQUIPMENT IN BULGARIA .....................................................................5 Latent Demand and Accessibility: Background
5
2.2 Latent Demand: Market Composition 5 2.2.1 Packaging Waste ........................................................................................................................................ 5 2.2.2 Waste Electrical and Electronic Equipment ............................................................................................... 6 2.2.3 End-of-Life Vehicles.................................................................................................................................. 6 2.2.4 Waste Oils .................................................................................................................................................. 7 2.2.5 Used Tires .................................................................................................................................................. 7 2.2.6 Batteries...................................................................................................................................................... 7 2.3
Market Data
7
2.4
Latent Demand: Leading Segments
8
2.5
Key Suppliers
8
2.6
Prospective Buyers
9
2.7
Accessibility: Market Entry
9
2.8
Market Issues and Obstacles
9
2.9
Accessibility: Trade Events
10
3
FINANCIAL INDICATORS: SANITARY SERVICES....................................................11
3.1 Overview 11 3.1.1 Financial Returns and Gaps in Bulgaria ................................................................................................... 11 3.1.2 Labor Productivity Gaps in Bulgaria........................................................................................................ 14 3.1.3 Limitations and Extensions ...................................................................................................................... 15 3.2 Financial Returns in Bulgaria: Asset Structure Ratios 16 3.2.1 Overview .................................................................................................................................................. 16 3.2.2 Assets – Definitions of Terms .................................................................................................................. 16 3.2.3 Asset Structure: Outlook .......................................................................................................................... 19 3.2.4 Large Variances: Assets ........................................................................................................................... 20 3.2.5 Key Percentiles and Rankings .................................................................................................................. 23 3.3 Financial Returns in Bulgaria: Liability Structure Ratios 38 3.3.1 Overview .................................................................................................................................................. 38 3.3.2 Liabilities and Equity – Definitions of Terms .......................................................................................... 38 3.3.3 Liability Structure: Outlook ..................................................................................................................... 40 3.3.4 Large Variances: Liabilities ..................................................................................................................... 41 www.icongrouponline.com
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Key Percentiles and Rankings .................................................................................................................. 44
3.4 Financial Returns in Bulgaria: Income Structure Ratios 57 3.4.1 Overview .................................................................................................................................................. 57 3.4.2 Income Statements – Definitions of Terms .............................................................................................. 57 3.4.3 Income Structure: Outlook ....................................................................................................................... 59 3.4.4 Large Variances: Income.......................................................................................................................... 60 3.4.5 Key Percentiles and Rankings .................................................................................................................. 63 3.5 Financial Returns in Bulgaria: Profitability Ratios 78 3.5.1 Overview .................................................................................................................................................. 78 3.5.2 Ratios – Definitions of Terms .................................................................................................................. 78 3.5.3 Ratio Structure: Outlook .......................................................................................................................... 80 3.5.4 Large Variances: Ratios ........................................................................................................................... 81 3.5.5 Key Percentiles and Rankings .................................................................................................................. 84 3.6 Productivity in Bulgaria: Asset-Labor Ratios 99 3.6.1 Overview .................................................................................................................................................. 99 3.6.2 Asset to Labor: Outlook ......................................................................................................................... 100 3.6.3 Asset to Labor: International Gaps......................................................................................................... 101 3.6.4 Key Percentiles and Rankings ................................................................................................................ 104 3.7 Productivity in Bulgaria: Liability-Labor Ratios 119 3.7.1 Overview ................................................................................................................................................ 119 3.7.2 Liability to Labor: Outlook .................................................................................................................... 120 3.7.3 Liability and Equity to Labor: International Gaps.................................................................................. 121 3.7.4 Key Percentiles and Rankings ................................................................................................................ 124 3.8 Productivity in Bulgaria: Income-Labor Ratios 137 3.8.1 Overview ................................................................................................................................................ 137 3.8.2 Income to Labor: Outlook ...................................................................................................................... 138 3.8.3 Income to Labor: Gaps ........................................................................................................................... 139 3.8.4 Key Percentiles and Rankings ................................................................................................................ 142
4 4.1
MACRO-ACCESSIBILITY IN BULGARIA ...................................................................157 Executive Summary
157
4.2 Political Risks 157 4.2.1 Economic Relationship with the United States ...................................................................................... 157 4.2.2 The Political System............................................................................................................................... 158 4.3 Marketing Strategies 158 4.3.1 Creating a Sales Office........................................................................................................................... 158 4.3.2 Creating a Joint Venture......................................................................................................................... 159 4.3.3 Agents and Distributors.......................................................................................................................... 160 4.3.4 Hiring Local Counsel ............................................................................................................................. 160 4.3.5 Checking Bona Fides.............................................................................................................................. 161 4.3.6 Distribution Channel Options................................................................................................................. 161 4.3.7 Franchising Activities............................................................................................................................. 162 4.3.8 Direct Marketing Options....................................................................................................................... 163 4.3.9 Selling Strategies.................................................................................................................................... 163 4.3.10 Product Pricing....................................................................................................................................... 164 4.3.11 Licensing Options .................................................................................................................................. 164
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Advertising and Trade Promotion .......................................................................................................... 165 Trade Promotion..................................................................................................................................... 167 Government Procurement....................................................................................................................... 167
4.4 Import and Export Regulation Risks 168 4.4.1 Adherence to Free Trade Agreements .................................................................................................... 168 4.4.2 Trade Barrier Risks ................................................................................................................................ 169 4.4.3 Restrictions on Imports .......................................................................................................................... 170 4.4.4 Controls on Exports................................................................................................................................ 170 4.4.5 Trade in Arms and Dual-Use Goods and Technologies ......................................................................... 170 4.4.6 U.S. Exports of Sensitive Technology to Bulgaria................................................................................. 171 4.4.7 Import Tariffs and License Requirements .............................................................................................. 171 4.4.8 Customs Regulations and Contact Information...................................................................................... 172 4.4.9 Entering Temporary Imports .................................................................................................................. 173 4.4.10 Additional Trade Issues.......................................................................................................................... 173 4.4.11 Labeling Issues....................................................................................................................................... 174 4.4.12 Warranty and Non-Warranty Repairs..................................................................................................... 174 4.4.13 Free Trade Zone Options........................................................................................................................ 174 4.5 Investment Climate 175 4.5.1 Openness to Foreign Investment ............................................................................................................ 175 4.5.2 Common Forms of Investment............................................................................................................... 176 4.5.3 Barriers to Direct Investment ................................................................................................................. 176 4.5.4 Privatization ........................................................................................................................................... 177 4.5.5 Concessions............................................................................................................................................ 177 4.5.6 Conversion and Transfer Policies........................................................................................................... 178 4.5.7 Expropriation and Compensation ........................................................................................................... 178 4.5.8 Dispute Settlement ................................................................................................................................. 178 4.5.9 Performance Requirements and Incentives ............................................................................................ 181 4.5.10 Right to Private Ownership and Establishment ...................................................................................... 181 4.5.11 Intellectual Property Risks ..................................................................................................................... 181 4.5.12 Transparency of the Regulatory System................................................................................................. 184 4.5.13 Capital Market Risks .............................................................................................................................. 185 4.5.14 Political Violence ................................................................................................................................... 186 4.5.15 Corruption .............................................................................................................................................. 186 4.5.16 Bilateral Investment Agreements ........................................................................................................... 187 4.5.17 OPIC and Other Investment Insurance................................................................................................... 187 4.5.18 Labor ...................................................................................................................................................... 187 4.5.19 Free Trade Zones and Free Ports............................................................................................................ 188 4.6 Trade and Project Financing 189 4.6.1 The Banking System .............................................................................................................................. 189 4.6.2 Foreign Exchange Control Risks............................................................................................................ 189 4.6.3 General Financing Availability .............................................................................................................. 189 4.6.4 Availability of GSM Credit Guarantees ................................................................................................. 189 4.6.5 Financing Export Strategies ................................................................................................................... 190 4.6.6 Financing from International Financial Institutions ............................................................................... 190 4.6.7 Types of Available Export Financing and Insurance ............................................................................. 191 4.6.8 Banks with Correspondent Banking Arrangements ............................................................................... 191 4.7 Travel Risks 191 4.7.1 Local Business Practices ........................................................................................................................ 191 4.7.2 Travel Issues........................................................................................................................................... 192 4.7.3 Work Week 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Infrastructure for Conducting Business.................................................................................................. 193 Temporary Entry of Business Equipment and Materials........................................................................ 194 Country Data .......................................................................................................................................... 194
4.8 Key Contacts 194 4.8.1 U.S. Government Contacts ..................................................................................................................... 194 4.8.2 Trade and Industry Associations ............................................................................................................ 198 4.8.3 Bulgarian Government Contacts ............................................................................................................ 199 4.8.4 Major State Enterprises .......................................................................................................................... 202 4.8.5 U.S.-based Financial Institutions in Bulgaria ......................................................................................... 203 4.8.6 International Financial Institutions......................................................................................................... 204 4.8.7 Bulgarian Business Publications ............................................................................................................ 205 4.8.8 Important Web Sites about Bulgaria ...................................................................................................... 206 4.8.9 Bulgaria on the Internet.......................................................................................................................... 207
5
DISCLAIMERS, WARRANTEES, AND USER AGREEMENT PROVISIONS .........209
5.1
Disclaimers & Safe Harbor
209
5.2
Icon Group International, Inc. User Agreement Provisions
210
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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 recycling equipment in Bulgaria. 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 recycling equipment, 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 recycling equipment in Bulgaria. 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 Bulgaria can quickly understand where Bulgaria fits into a firm’s strategic perspective. In Chapter 2, the report investigates latent demand and micro-accessibility for recycling equipment in Bulgaria. In Chapters 3 and 4, the report covers proxy operating pro-forma financials and macro-accessibility in Bulgaria. Macro-accessibility is a general evaluation of investment and business conditions in Bulgaria.
1.2
HOW TO STRATEGICALLY EVALUATE BULGARIA
Perhaps the most efficient way of evaluating Bulgaria 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 recycling equipment 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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Introduction & Methodology
2
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 BULGARIA
This report provides a detailed overview of factors driving latent demand and accessibility for recycling equipment in Bulgaria. Latent demand is largely driven by economic fundamentals specific to recycling equipment. This topic is discussed in Chapter 2 using work carried out in Bulgaria 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 recycling equipment in Bulgaria. I use the term “micro” since the discussion is focused specifically on recycling equipment. Chapter 3 is also a stand-alone report that I have authored. It covers proxy pro-forma financial indicators of firms operating in Bulgaria. I use the word “proxy” because the provided figures only cover a “what if” scenario, based on actual operating results for firms in Bulgaria. The numbers are only indicative of an average firm whose primary activity is in Bulgaria. It covers a vertical analysis of the maximum likelihood balance sheet, income statement, and financial ratios of firms operating in Bulgaria. It does so for a particular Standard Industrial Classification (SIC) code. That code covers “sanitary services”, as defined in Chapter 3. Again, while “sanitary services” does not exactly equate to “recycling equipment”, it nevertheless gives an indicator of how Bulgaria compares to other countries for a proxy adjacent category along various dimensions. Chapter 4 deals with macro-accessibility and covers factors that go beyond recycling equipment. 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 Bulgaria: •
Openness to Trade in Bulgaria
•
Openness to Direct Investment in Bulgaria
•
Local Marketing and Entry Strategy Alternatives
•
Local Human Resources
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Introduction & Methodology •
4
Local Risks
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 Bulgaria. Chapter 4 is also presented from the perspective of an American firm, though is equally applicable to most firms entering Bulgaria. 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 2.1
RECYCLING EQUIPMENT IN BULGARIA LATENT DEMAND AND ACCESSIBILITY: BACKGROUND
Bulgaria will join the European Union in 2007 and after this date strict EU environmental standards will be effective in the country. The Bulgarian legislation has been completely harmonized with the EU requirements in the field of recycling activities, according to the closing of the Chapter Environment during the negotiation process. The adopted regulatory Acts set up the annual achievement of progressive targets in the waste recycling and re-use in order to facilitate the full transition to the European standards. Prior to the beginning of the implementation of the EU legislation recycling was not among the priorities of the waste management activities. The Bulgarian Government has made significant progress so far but the accomplishments are still far from the European regulations. In spite of the efforts in transposing the EU legislation, Bulgaria has not built yet an effective recycling system and the share of the recycled waste is relatively low. The market for recycling equipment and services is still developing and the number of companies active in this field is limited.
2.2
LATENT DEMAND: MARKET COMPOSITION
There are favorable prospects for US exporters of recycling equipment, technologies and know-how. The share of recycled waste in the different categories must be increased every year with accordance to the adopted legislation, and this is a good precondition for the growth of the import of US equipment. In addition, a sensitive increase is observed in the amount of the generated recyclable waste (including packaging, electronic equipment, end-of-life vehicles, etc.) and the launch of new recycling sites is necessary. According to the estimations of the Ministry of Environment and Water, the generated household waste per capita in Bulgaria is around 501 kg of waste per year, of which around 25% is recyclable. The municipal solid waste for 2004 consists of 3.900 thousand tons. Food and the garden waste represent 39.6% of the total, plastics account for 12%, the share of paper and paper products is 10%. The portion of glass and metals is unimportant—5% and 3%, respectively. These data show that now is the right time for US companies, offering services, technology and know-how, to enter the local market. The separate waste collection will be introduced in more regions of the country and in this way the recycling of different waste will become possible. The strategy of the government foresees to implement the waste separation for 56% of the population by 2012. In the next 5 years, new systems will be located in cities with more than 10.000 inhabitants. This share is much below the European average. In addition, the responsiveness of the population to the separate collection is very low. Bulgaria has complied its legislation with the European regulations regarding the different types of waste.
2.2.1
Packaging Waste
Bulgaria adopted the Ordinance on packaging waste in 2004. According to the Ordinance, the producers of packaging waste should either pay a product tax to the budget, and more specifically to the state-owned Enterprise for the Management Enterprise Protection Activities, or pay recovery fees to the one of the five existing recovery associations, which are responsible for the recycling of the packaging waste. The recovery fee paid to these nonprofit joint stock companies is significantly lower than the so-called product tax.
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The five recovery organizations hаve initiated projects for separate collection in some areas and they will be the main partner of the Ministry of Environment and Water in meeting the targets, set up by the Ordinance: •
In 2006 32% as a minimum of packaging waste shall be recovered.
•
In 2007 39% as a minimum of packaging waste shall be recovered, of which at least 25% shall be recycled, including 15% as a minimum by weight by each material and 12% from the plastics.
•
After 2011 at least 50% of the packaging waste is to be recovered, of which at least 45% shall be recycled, including a minimum of 15% of each packaging material.
From 2007, the recycling organizations will be obliged for the first time to recycle a certain percentage of the waste. In this way, the Waste Management Act, adopted in 2004, reveals very favorable prospects for the US exporters of recycling equipment and services. The total quantity of packaging waste per year is increasing with 9-10 thousand tons annually. There are good prospects for plastic recycling, and specifically for PET. Currently, there is only one PET recycling installation (for extraction of re-granulate) operating in Bulgaria, and it was built in the last few years. At present, there is an increased interest in the construction of recycling installations.
2.2.2
Waste Electrical and Electronic Equipment
The foundations in this area have been laid by Ordinance on WEEE, which will be effective from September 2006 and completely transposes the European requirements in this area. The implementation of this Directive (2002/96/EC) reveals new market opportunities for US exporters. At present, no recovery organizations have been set up to handle electrical and electronic waste and the local companies do not have any experience in this area. The establishment of such recovery organizations is imperative in order to be able to cope with the recovery targets, set by the Ordinance. Due to this necessity, the demand for recycling and shredding equipment, waste recovery technologies, know-how and consultancy services will be growing, following the trend of an increase in the quantity of the generated electronic waste and the progressive annual targets for recycling. According to the Ordinance, after 2008 the producers and importers of household appliances have the obligation to take back from the population at least 4 kg of electrical and electronic waste annually by 2008. WEEE collection centers have not been established yet, but according to the legislation by the end of 2008 around 750 centers should be operating in the whole country. The Ordinance determines ambitious objectives in terms of recovery, re-use and recycling of WEEE, which are different for the 10 categories of electrical and electronic equipment.
2.2.3
End-of-Life Vehicles
Bulgaria has one of the oldest automotive parks in Europe and the average age of the automobiles is 13,6 years, while the average for the EU is 7,4 years. The sales of new vehicles are experiencing a steady increase, although their share is still unimportant and the quantity of end-of-life vehicles will be substantially growing every year. According to the data of the Ministry of Environment and Water 60,000 vehicles reach their end of life and 150,000 vehicles are registered every year. The European legislation has been transposed since January 1st, 2005. According to the Ordinance on the requirements for treatment of end-of-life vehicles, the importers are responsible for the recycling of the products they put on the market. The targets for recovery and recycling that must be gradually achieved until 2015 are 95% (out of which 85% must be recycled) for the vehicles manufactured after January 1st, 1980 and 75% for vehicles manufactured before January 1st, 1980. The end-of-life vehicles recovery organization has been established in 2005 www.icongrouponline.com
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by the importers of new and used vehicles and for the first year of its activity the organization fulfilled its obligations in terms of recovery and recycling. Currently, there are only 2 out of 120 disassemble centers for de-registered vehicles in line with the standards, the rest resemble scrapyards. The EMEPA will be constructing other 2 disassembling stations for end-of-life vehicles. The lack of a network of such installations is due to the high construction costs that the importers cannot afford in spite of the fact that recovery fees are paid by the owners of newly imported automobiles. The purchase of special equipment is necessary in order to fulfill the EU requirements.
2.2.4
Waste Oils
The Ordinance on the requirements for treatment and transportation of waste oils and waste oil products entered into force in January 2006. After 2008 the producers and importers will be obliged to recover at least 40% of the oils, which they place on the market. All the industrial oils must be collected and the producers and the importers have to establish take-back centers. Currently, there is only one installation recycling waste oil in Bulgaria and it is located in Ruse. Its annual capacity of 5,000 tons is insufficient for the recycling of all the waste oils. Recovery organizations do not exist and all the oil products on the market are subject to a product tax.
2.2.5
Used Tires
The challenge, which will be faced in this area, is the lack of a collecting system and the unwillingness of the population to give back the used tires. Two installations for recycling of used tires have been constructed so far but the insufficiency of products to be recycled is a very serious issue for them in spite of the fact that the annual quantity of the used tires is estimated to be between 40,000 and 60,000 tons.
2.2.6
Batteries
The Bulgarian legislation in this area is transposing the European Directive 98/101/EC. After 2010, the producers and importers of batteries shall collect 20 grams of spent batteries per capita, 140 tons in total. The target set for the recycling of the Nickel-Cadmium batteries is 70%, the targets for the first years of implementation of the Directive in Bulgaria are much lower. According to the Ordinance, 65% of the lead-acid batteries and accumulators shall be recycled and 95% of the lead has to be extracted. 35% of all the other collected batteries and accumulators must be recycled after 2010. New take-back centers for portable batteries and automotive accumulators must be established by the end of 2007. The recovery organization Ecobat was established in 2004 and now it is expecting to obtain a license by the Ministry of Environment and Water. There are no battery recycling plants in Bulgaria and a new facility is very unlikely to be built due to the lack of funds. The only solution for the recovery organization is to export the spent batteries and accumulators abroad for recycling.
2.3
MARKET DATA
The market for recycling equipment and services is still developing. The main problems are the lack of contribution of the population to the introduction of separate collection and the unwillingness of people to give back certain used products to the determined locations. Nevertheless, there are favorable conditions for the expansion of the market. The achievement of the targets, set by the harmonized legislation, will be gradual and will depend on the import of www.icongrouponline.com
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additional equipment because of the growing annual quantity of generated packaging waste, electrical and electronic waste etc. The basic factors that heave led to this growth are the increased disposal income and consumer spending, due to the higher GDP per capita and access to lending. As a result the companies are renewing their automotive park and office equipment. Data are not available for the size of the market and for the domestic production. The import in this area largely exceeds the export and according to the estimations the European equipment is dominant on the market. A currency board was introduced in the country in 1997 and led to a financial stability. The exchange rate of the national currency BGN is tied to the Euro, so the fluctuations of the exchange rate USD/BGN depend on the rate EUR/BGN and on the international monetary markets. The targeted inflation rate of the Bulgarian government for 2007 is 3.1%, but the high oil prices are very often a reason not to follow the forecasts.
2.4
LATENT DEMAND: LEADING SEGMENTS
US exporters can take advantage from the favorable market opportunities in Bulgaria for the following groups of commodities: •
Plastics recycling equipment.
•
Technologies and recycling equipment for WEEE.
•
Shredders for automobiles.
•
Waste oil draining and recycling equipment.
•
Nickel-cadmium batteries recycling equipment.
•
Shredders for end-of-life vehicles.
•
Sorting systems.
•
Waste recycling installations.
•
Sorting and analysis tools.
2.5
KEY SUPPLIERS
There are not any major players in the market for recycling equipment and services. The domestic production of recycling equipment is limited and the country relies mainly on import. A part of the equipment has been imported from Russia and must be replaced. American companies face serious competition with European companies. All the recent recycling installations have been imported from Europe. The import of equipment from the EU is exempted from custom duties and this fact is a considerable advantage for the EU companies. The fixed exchange rate of the Bulgarian leva to the Euro facilitates the foreign trade operations with partners from the EU. Nevertheless, the US export has good prospects with the more favorable exchange rate to the US dollar. The US equipment and technologies have an excellent reputation in Bulgaria with its high quality and innovative solutions, and the end-users are inclined to invest in US products and services in spite of the higher price.
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Recycling Equipment
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PROSPECTIVE BUYERS
The potential end-users for recycling equipment and services are the 5 packaging waste recovery organizations, which are obliged to organize separate collection of household solid waste for 6 mln inhabitants until 2007 and to meet the increasing targets for recycling of the packaging waste. Some municipalities and the Enterprise for Management of the Environmental Protection activities have specific projects for the implementation of separating installations and the recovery organizations are going to be the main executives in fulfilling the EU obligations. For specific information on paper, glass, tires and plastic recyclers in Bulgaria, please contact Andon Kalibatsev at: E-mail:
[email protected] Phone: +359 2 9395781 Fax: +359 2 9395735
2.7
ACCESSIBILITY: MARKET ENTRY
It is recommended that US exporters enter the local market through a local partner. This is the easiest method for US companies and the most cost-effective way to sell their products and services in Bulgaria. The local companies have access to up-to-date information about all the current projects and the existing tenders in the country, have a better knowledge of the legislation and experience with participation in procurement procedures. A representative is more familiar with the market situation in this area, has a more thorough understanding of the end-users and their needs and is able to provide technical assistance and servicing to the customers. In addition, a local representative is well acquainted with the business customs.
2.8
MARKET ISSUES AND OBSTACLES
All imports to Bulgaria are subject to a value added tax of 20%. The customs duties that apply to US exporters are the Most Favored Nation (MFN) duties, which are levied to commodities coming from countries, which are members of the World Trade Organization. The detailed tariffs for different commodities imported in Bulgaria are available at the Web site of Bulgaria’s Customs Agency: www.en.customs.bg/index_en.html. After the Bulgarian accession to the EU, expected to be effective from 2007, the external EU tariffs for import from third countries will be applied to the US export. Services and products imported from EU member states enter the Bulgarian market with reduced customs duties or are exempt from tariffs, pursuant to Bulgaria’s European Union association agreement. The Most Favored Nation customs tariff rates, which apply to the US, are generally higher than tariffs applicable to EU products. Another potential barrier is the need for US producers to use the metric system, when designing products for export to Bulgaria. Some of the high-tech products offered by US producers need special spare parts, which are not available in Bulgaria. Thus, in order to make a product marketable, it is essential that US exporters provide channels for distribution of spare parts and service for the equipment in Bulgaria or in the neighboring countries. In order to be competitive on the Bulgarian market, equipment and materials exported from the USA should also comply with the ISO quality standards.
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Recycling Equipment
2.9
10
ACCESSIBILITY: TRADE EVENTS
Energy and Environment, Plovdiv International Technical Fair September 25-30, 2006 Plovdiv www.fair.bg Balkan Pack – Packaging and Recycling November, 1-4, 2006 Sofia Organizer: Via Expo www.viaexpo.bg
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11
3 3.1
FINANCIAL INDICATORS: SANITARY SERVICES OVERVIEW
Is Bulgaria 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: sanitary services. We are essentially interested in the degree to which firms operating in Bulgaria 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 Bulgaria, 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 Bulgaria, 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 Bulgaria 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 Bulgaria 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 Bulgaria? 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 Bulgaria. Again, we are particularly interested in sanitary 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 Bulgaria differs from regional and global benchmarks. In this case, we are interested in the amount of labor required to operate a typical business in Bulgaria and the likely returns on this human investment. What is the typical ratio of short-term and long-term assets to employee (employed in sanitary 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 Bulgaria compared to regional benchmarks? The goal of this section is to assist managers in gauging the competitive performance of Bulgaria at the global level for sanitary services. With the globalization of markets, greater foreign competition, and the reduction of entry barriers, it becomes all the more important to benchmark Bulgaria 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 sanitary services in Bulgaria. Though we heavily rely on historical performance, the figures reported are not historical but are forecasts and projections for the coming fiscal year.
3.1.1
Financial Returns and Gaps in Bulgaria
The approach used in this report to evaluate operating performance for sanitary services in Bulgaria is called "vertical analysis." For those unfamiliar with this type of analysis, frequently taught in graduate schools of business, the
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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 Bulgaria) for a particular sector (in this case sanitary 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
•
Dun & Bradstreet - www.dnb.com
•
Hoovers - www.hoovers.com
•
HarrisInfoSource - www.HarrisInfo.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
©2007 Icon Group International, Inc.
Financial Indicators •
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
13
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: 495;4959; which is defined as “sanitary 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 Bulgaria, for those that report financials (balance sheet and income statements) and that are involved in sanitary 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 sanitary 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 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
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Financial Indicators
14
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 Bulgaria 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 Denmark, Finland, France, Italy, 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 Bulgaria whose primary activity is sanitary 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 Bulgaria. 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 Bulgaria 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 sanitary 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.
3.1.2
Labor Productivity Gaps in Bulgaria
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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 Bulgaria has vis-à-vis the worldwide average (for sanitary 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 Bulgaria 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
FINANCIAL RETURNS RATIOS
IN
16
BULGARIA: ASSET STRUCTURE
Overview
In this chapter we consider the asset structure of companies involved in sanitary services operating in Bulgaria benchmarked against global averages. The chapter begins by defining relevant terms. A common-size statement, or vertical analysis of assets is then presented for companies operating in Bulgaria and the average global benchmarks (total assets = 100 percent). For ratios where there are large deviations between Bulgaria 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 equipment, refrigeration equipment, and all other property permanently attached to or forming an integral
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17
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.
•
Deferred Charges. Deferred charges are generally understood to represent the amount which has been paid for services already received by the company but has not been charged to operations.
•
Finished Goods. Finished goods generally comprise the ready-for-sale inventory.
•
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.
•
Progress Payments. Progress payments are commonly defined as periodic payments to a supplier, contractor, or subcontractor for work as it is completed as desired, in order to reduce working capital requirements.
•
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).
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•
Raw Materials. Raw materials are materials which will be converted by a manufacturer into a finished product.
•
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.
•
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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Financial Indicators
3.2.3
19
Asset Structure: Outlook
Using the methodology described in the introduction, the following table summarizes asset structure benchmarks for firms involved in sanitary services in Bulgaria. To allow comparable benchmarking, a common index of Total Assets = 100 is used. All figures are current-year projections for companies operating in Bulgaria based on latest financial results available. Asset Structure Bulgaria Europe World Avg. _________________________________________________________________________________________________________
Cash & Short Term Investments Cash Short Term Investments Receivables (Net) Total Inventories Raw Materials Finished Goods Progress Payments & Other 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 Deferred Charges Intangible Other Assets Total Assets
6.51 5.56 0.95 11.20 3.58 3.37 0.02 0.20 0.50 21.79 0.01 1.43 61.82 128.73 2.07 60.29 56.37 1.01 8.99 66.91 0.06 24.69 40.85 0.92 0.39 1.32 0.28 1.04 100.00
7.54 4.96 2.32 12.90 3.28 1.76 0.44 0.29 2.00 25.90 1.34 5.46 57.12 107.68 3.16 26.80 57.24 7.48 23.74 50.35 0.47 12.75 33.72 5.24 11.96 6.46 0.45 4.46 100.00
8.61 4.67 3.34 13.59 2.41 0.81 0.47 1.49 2.09 27.24 0.33 3.14 54.17 88.01 4.81 13.03 49.92 1.86 22.10 33.17 0.44 3.81 21.61 1.13 6.89 5.48 0.79 1.74 100.00
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Financial Indicators
3.2.4
20
Large Variances: Assets
The following graphics summarize for sanitary services the large asset structure gaps between firms operating in Bulgaria 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: Current Assets - Total 30
21.79
25.9
27.24
20 10 0 -5.45 -10
Bulgaria
Europe
World Average
Gap
Gap: Property Plant and Equipment - Net 80 61.82 60
57.12
54.17
40 20 0
7.65 Bulgaria
Europe
World Average
Gap
Gap: Property Plant and Equipment - Gross 150
128.73 107.68 88.01
100
40.72
50 0
Bulgaria
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Europe
World Average
Gap
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Financial Indicators
21
Gap: Buildings 80 60
60.29 47.26
40
26.8 13.03
20 0
Bulgaria
Europe
World Average
Gap
Gap: Machinery & Equipment 60
56.37
57.24 49.92
50 40 30 20
6.45
10 0
Bulgaria
Europe
World Average
Gap
Gap: Other Property Plant & Equipment 30
23.74
22.1
20 10
8.99
0 -10 -20
-13.11 Bulgaria
Europe
World Average
Gap
Gap: Accumulated Depreciation - Total 80
66.91
60
50.35 33.17
40
33.74
20 0
Bulgaria
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Europe
World Average
Gap
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Financial Indicators
22
Gap: Accumulated Depreciation - Buildings 25
24.69 20.88
20 12.75
15 10
3.81
5 0
Bulgaria
Europe
World Average
Gap
Gap: Accumulated Depreciation -Machinery & Equipment 50
40.85
40
33.72
30
21.61
20
19.24
10 0
Bulgaria
Europe
World Average
Gap
Gap: Accumulated Depreciation - Other Prop & Equip 15
11.96
10 5
6.89 0.39
0 -5 -10
-6.5 Bulgaria
Europe
World Average
Gap
Gap: Other Assets 8 6 4 2 0 -2 -4 -6
6.46
5.48
1.32
-4.16 Bulgaria
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Europe
World Average
Gap
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Financial Indicators
3.2.5
23
Key Percentiles and Rankings
We now consider the distribution of asset ratios for sanitary services using ranks and percentiles. What percent of countries have a value lower or higher than Bulgaria (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
Bulgaria
Rank of Total
Percentile
6.51 5.56 0.95 11.20 3.58 3.37 0.02 0.20 0.50 21.79 0.01 1.43 61.82 128.73 2.07 60.29 56.37 1.01 8.99 66.91 0.06 24.69 40.85 0.92 0.39 1.32 0.28 1.04 100.00
29 of 54 13 of 51 38 of 49 31 of 54 17 of 54 7 of 47 32 of 35 29 of 44 36 of 53 32 of 54 42 of 43 43 of 47 28 of 54 11 of 52 18 of 40 4 of 49 21 of 51 14 of 36 33 of 52 10 of 52 10 of 14 5 of 46 9 of 47 9 of 33 43 of 49 40 of 54 23 of 34 33 of 52
46.30 74.51 22.45 42.59 68.52 85.11 8.57 34.09 32.08 40.74 2.33 8.51 48.15 78.85 55.00 91.84 58.82 61.11 36.54 80.77 28.57 89.13 80.85 72.73 12.24 25.93 32.35 36.54
_________________________________________________________________________________________________________
Cash & Short Term Investments Cash Short Term Investments Receivables (Net) Total Inventories Raw Materials Finished Goods Progress Payments & Other 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 Deferred Charges Intangible Other Assets Total Assets
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
24
Cash & Short Term Investments Countries
Value (total assets = 100)
Rank
Percentile
27.84 27.77 18.10 17.02 16.12 15.90 14.07 12.20 11.77 11.02 9.94 9.24 9.16 8.11 7.89 7.89 7.86 7.81 7.71 7.54 7.42 7.34 6.48 6.15 6.12 5.55 5.34 5.28 5.27 5.08 5.03 4.89 4.78 4.55 3.76 3.36 3.05 2.86 2.76 2.27 2.13 1.84 1.65 1.53 1.22
1 2 4 5 6 7 9 11 12 13 14 15 16 18 19 20 21 22 23 24 25 27 29 30 31 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 51 52 53
98.11 96.23 92.45 90.57 88.68 86.79 83.02 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 49.06 45.28 43.40 41.51 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
_________________________________________________________________________________________________________
Turkey Mexico Thailand Singapore China Malaysia Switzerland Pakistan Germany Belgium Philippines Luxembourg France South Africa New Zealand Czech Republic Indonesia Hong Kong Norway Poland South Korea the United Kingdom Denmark Netherlands Greece Austria Argentina Italy Spain Israel Ireland India Canada Brazil Japan Finland Australia Sweden USA Peru Taiwan Russian Federation Hungary Chile Portugal
the Middle East Latin America Asia Asia Asia Asia Europe the Middle East Europe Europe Asia Europe Europe Africa Oceana Europe Asia Asia Europe Europe Asia Europe Europe Europe Europe Europe Latin America Europe Europe the Middle East Europe Asia North America Latin America Asia Europe Oceana Europe North America Latin America Asia Europe Europe Latin America Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
25
Cash & Short Term Investments (Sanitary Services) Countries in Europe
Value (total assets = 100)
Rank
Percentile
26.45 24.28 23.59 22.76 16.51 14.07 13.13 11.77 11.02 9.24 9.16 8.17 7.89 7.71 7.54 7.49 7.49 7.49 7.34 7.15 7.07 7.05 6.78 6.52 6.51 6.48 6.15 6.12 5.67 5.59 5.55 5.50 5.36 5.36 5.32 5.28 5.27 5.03 4.95 3.36 2.86 2.78 1.98 1.84 1.84 1.65 1.48 1.41 1.39 1.22 1.17
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 Monaco Switzerland Liechtenstein Germany Belgium Luxembourg France Andorra Czech Republic Norway Poland Latvia Faroe Islands Croatia the United Kingdom Estonia Belarus Slovakia Moldova Kazakhstan Bulgaria Denmark Netherlands Greece Malta Isle of Man Austria San Marino Jersey Guernsey Vatican City Italy Spain Ireland Slovenia Finland Sweden Iceland Albania Russian Federation Lithuania Hungary Ukraine Gibraltar Georgia Portugal Cyprus
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
26
Receivables (Net) Countries
Value (total assets = 100)
Rank
Percentile
37.93 26.09 25.37 25.16 23.38 22.27 20.63 19.47 18.79 18.74 18.71 16.91 16.71 15.67 15.54 14.39 14.19 13.99 13.84 13.82 13.37 12.96 12.86 12.57 12.39 11.62 11.43 11.03 10.40 10.15 9.76 8.67 8.40 8.31 8.16 8.05 7.21 7.06 6.91 6.75 6.75 6.18 4.98 4.61 3.94
1 2 3 4 5 6 7 8 9 10 11 13 14 15 16 17 19 20 21 22 23 24 25 27 28 29 30 31 32 33 34 36 37 38 39 40 41 42 43 44 45 46 49 50 51
98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 75.47 73.58 71.70 69.81 67.92 64.15 62.26 60.38 58.49 56.60 54.72 52.83 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 32.08 30.19 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 7.55 5.66 3.77
Region
_________________________________________________________________________________________________________
Singapore Netherlands Israel Ireland India Russian Federation France Italy Turkey Mexico South Korea Philippines Switzerland Pakistan Germany Finland South Africa Spain Denmark Hungary Indonesia Poland Norway Chile Belgium the United Kingdom Greece New Zealand Brazil Malaysia Luxembourg Japan Canada Argentina Portugal USA Peru Australia Hong Kong China Sweden Czech Republic Austria Thailand Taiwan
Asia Europe the Middle East Europe Asia Europe Europe Europe the Middle East Latin America Asia Asia Europe the Middle East Europe Europe Africa Europe Europe Europe Asia Europe Europe Latin America Europe Europe Europe Oceana Latin America Asia Europe Asia North America Latin America Europe North America Latin America Oceana Asia Asia Europe Europe Europe Asia Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
27
Receivables (Net) (Sanitary Services) Countries in Europe
Value (total assets = 100)
Rank
Percentile
36.78 26.09 25.16 22.27 22.22 20.63 19.62 19.47 18.03 17.85 16.71 16.38 15.92 15.60 15.54 15.36 14.39 13.99 13.84 13.82 13.13 12.96 12.86 12.43 12.39 11.82 11.65 11.64 11.62 11.43 11.42 11.22 11.20 10.59 10.45 9.76 8.16 8.13 7.81 6.75 6.63 6.29 6.18 5.87 5.86 5.16 5.15 4.98 4.93 4.81 4.81
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
_________________________________________________________________________________________________________
Monaco Netherlands Ireland Russian Federation Lithuania France Vatican City Italy Estonia Romania Switzerland Bosnia & Herzegovina Macedonia Liechtenstein Germany Serbia & Montenegro Finland Spain Denmark Hungary Slovenia Poland Norway Ukraine Belgium Gibraltar Moldova Georgia the United Kingdom Greece Andorra Kazakhstan Bulgaria Malta Isle of Man Luxembourg Portugal Iceland Cyprus Sweden Faroe Islands Albania Czech Republic Latvia Croatia Belarus Slovakia Austria San Marino Jersey Guernsey
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
28
Total Inventories Countries
Value (total assets = 100)
Rank
Percentile
25.19 24.98 11.91 7.60 7.53 7.50 4.76 4.71 4.33 4.15 4.00 3.97 3.88 3.75 3.72 3.60 3.15 3.12 2.90 2.61 2.53 2.49 2.47 2.45 2.23 2.14 2.06 1.83 1.75 1.62 1.57 1.48 1.47 1.41 1.22 1.00 0.99 0.99 0.88 0.88 0.87 0.57 0.35 0.12 0.07
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 20 22 23 24 25 26 28 29 31 33 35 36 37 38 39 40 41 42 43 44 45 46 47 50 51 52 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 47.17 45.28 41.51 37.74 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 5.66 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Israel Ireland Singapore Greece Norway South Korea Belgium Russian Federation Denmark Poland Japan Canada Finland Italy France Pakistan Philippines Sweden India Germany Thailand Indonesia Australia USA Spain Taiwan South Africa China the United Kingdom Luxembourg Switzerland Hong Kong Hungary Malaysia Czech Republic Peru Austria Netherlands Turkey Mexico Portugal Chile Brazil Argentina New Zealand
the Middle East Europe Asia Europe Europe Asia Europe Europe Europe Europe Asia North America Europe Europe Europe the Middle East Asia Europe Asia Europe Asia Asia Oceana North America Europe Asia Africa Asia Europe Europe Europe Asia Europe Asia Europe Latin America Europe Europe the Middle East Latin America Europe Latin America Latin America Latin America Oceana
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
29
Total Inventories (Sanitary Services) Countries in Europe
Value (total assets = 100)
Rank
Percentile
24.98 11.55 7.60 7.53 7.23 7.04 6.95 4.76 4.71 4.70 4.33 4.15 3.88 3.78 3.75 3.73 3.72 3.59 3.58 3.12 2.99 2.98 2.61 2.48 2.23 2.10 1.75 1.62 1.57 1.47 1.47 1.42 1.32 1.26 1.24 1.22 1.16 1.16 0.99 0.99 0.98 0.96 0.96 0.88 0.87 0.84 0.84 0.77 0.75 0.72 0.07
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
_________________________________________________________________________________________________________
Ireland Monaco Greece Norway Estonia Malta Isle of Man Belgium Russian Federation Lithuania Denmark Poland Finland Vatican City Italy Moldova France Kazakhstan Bulgaria Sweden Belarus Slovakia Germany Iceland Spain Slovenia the United Kingdom Luxembourg Switzerland Hungary Liechtenstein Faroe Islands Ukraine Gibraltar Georgia Czech Republic Latvia Croatia Austria Netherlands San Marino Jersey Guernsey Albania Portugal Romania Cyprus Bosnia & Herzegovina Macedonia Serbia & Montenegro Andorra
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
30
Current Assets - Total Countries
Value (total assets = 100)
Rank
Percentile
68.43 56.90 56.43 53.87 53.72 37.58 36.08 34.89 34.52 34.17 33.80 33.30 32.71 29.72 29.71 29.32 29.24 28.93 27.84 27.29 26.73 26.05 25.96 25.34 25.23 25.08 24.95 23.66 21.31 20.63 20.34 20.03 19.26 18.58 17.71 15.99 15.70 15.61 14.17 14.06 14.02 12.21 12.03 10.89 9.01
1 2 3 4 5 7 8 9 10 11 12 13 14 16 17 18 19 20 22 23 24 25 26 27 28 29 30 31 34 35 36 38 39 40 41 42 43 44 46 47 48 49 50 51 52
98.11 96.23 94.34 92.45 90.57 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 69.81 67.92 66.04 64.15 62.26 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 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
Region
_________________________________________________________________________________________________________
Singapore Israel Ireland Turkey Mexico Philippines India France South Korea Germany Netherlands Switzerland Pakistan Italy Indonesia Norway Russian Federation Belgium Malaysia Greece Finland Czech Republic Thailand Denmark Poland China South Africa the United Kingdom Spain Luxembourg Hong Kong New Zealand Hungary Canada Japan USA Chile Brazil Argentina Australia Sweden Portugal Austria Peru Taiwan
Asia the Middle East Europe the Middle East Latin America Asia Asia Europe Asia Europe Europe Europe the Middle East Europe Asia Europe Europe Europe Asia Europe Europe Europe Asia Europe Europe Asia Africa Europe Europe Europe Asia Oceana Europe North America Asia North America Latin America Latin America Latin America Oceana Europe Europe Europe Latin America Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
31
Current Assets - Total (Sanitary Services) Countries in Europe
Value (total assets = 100)
Rank
Percentile
66.35 56.43 51.19 46.97 45.65 44.04 34.89 34.17 33.80 33.30 33.27 31.08 29.96 29.72 29.32 29.24 29.17 28.93 27.29 26.73 26.05 25.34 25.30 25.23 24.96 24.72 24.71 23.66 22.68 21.83 21.79 21.31 20.74 20.63 20.00 19.51 19.26 17.32 16.47 16.22 16.15 15.55 15.51 14.02 12.21 12.03 11.91 11.68 11.61 11.61 9.50
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
_________________________________________________________________________________________________________
Monaco Ireland Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro France Germany Netherlands Switzerland Estonia Liechtenstein Vatican City Italy Norway Russian Federation Lithuania Belgium Greece Finland Czech Republic Denmark Malta Poland Isle of Man Latvia Croatia the United Kingdom Moldova Kazakhstan Bulgaria Spain Andorra Luxembourg Slovenia Faroe Islands Hungary Ukraine Gibraltar Georgia Iceland Belarus Slovakia Sweden Portugal Austria San Marino Cyprus Guernsey Jersey Albania
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
32
Property Plant and Equipment - Net Countries
Value (total assets = 100)
Rank
Percentile
85.41 85.36 76.44 74.23 73.08 71.80 71.58 71.26 70.27 68.31 68.30 67.61 65.98 65.90 65.50 65.15 64.72 64.57 64.49 64.17 63.74 63.57 63.35 62.66 62.56 59.07 57.94 57.79 56.93 54.48 53.52 53.40 52.39 46.86 42.63 42.06 40.81 40.60 38.26 38.16 37.74 29.84 28.43 9.38 9.30
1 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 26 27 28 29 30 31 33 34 35 36 38 39 40 41 42 43 44 45 48 49 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 62.26 60.38 58.49 56.60 54.72 50.94 49.06 47.17 45.28 43.40 41.51 37.74 35.85 33.96 32.08 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 9.43 7.55 1.89 0.00
Region
_________________________________________________________________________________________________________
Argentina Peru Hungary Japan Brazil Greece Poland Luxembourg Canada Chile Russian Federation Sweden Australia Czech Republic Thailand the United Kingdom USA Pakistan South Africa Spain Portugal Taiwan Denmark Malaysia China Austria Hong Kong Netherlands Norway South Korea India Italy New Zealand France Germany Finland Belgium Switzerland Turkey Mexico Philippines Indonesia Singapore Israel Ireland
Latin America Latin America Europe Asia Latin America Europe Europe Europe North America Latin America Europe Europe Oceana Europe Asia Europe North America the Middle East Africa Europe Europe Asia Europe Asia Asia Europe Asia Europe Europe Asia Asia Europe Oceana Europe Europe Europe Europe Europe the Middle East Latin America Asia Asia Asia the Middle East Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
33
Property Plant and Equipment - Net (Sanitary Services) Countries in Europe
Value (total assets = 100)
Rank
Percentile
76.82 76.64 76.44 74.51 71.80 71.58 71.26 68.74 68.30 68.14 67.61 66.55 65.90 65.67 65.39 65.36 65.15 64.36 64.35 64.17 63.74 63.35 62.55 62.52 61.93 61.82 61.01 60.24 59.07 58.51 57.79 57.04 57.04 56.93 55.55 54.25 53.83 53.40 52.52 46.86 42.63 42.06 40.81 40.60 37.89 36.35 33.36 32.42 31.27 27.57 9.30
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
_________________________________________________________________________________________________________
Belarus Slovakia Hungary Albania Greece Poland Luxembourg Ukraine Russian Federation Lithuania Sweden Malta Czech Republic Isle of Man Iceland Gibraltar the United Kingdom Moldova Georgia Spain Portugal Denmark Latvia Croatia Kazakhstan Bulgaria Cyprus Slovenia Austria San Marino Netherlands Guernsey Jersey Norway Faroe Islands Andorra Vatican City Italy Estonia France Germany Finland Belgium Switzerland Liechtenstein Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Monaco Ireland
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
34
Accumulated Depreciation - Total Countries
Value (total assets = 100)
Rank
Percentile
148.74 136.33 106.39 104.32 90.67 83.55 77.85 77.48 58.84 56.75 48.28 46.55 45.15 44.26 43.50 40.46 39.52 37.04 35.89 35.05 34.89 34.82 32.78 31.28 31.28 30.61 27.56 26.69 24.94 23.36 22.45 18.87 14.81 14.46 14.37 14.33 11.67 11.58 11.32 10.72 8.95 4.36 2.41
1 2 3 4 5 6 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 33 34 35 36 37 41 42 43 45 47 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 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 19.61 17.65 15.69 11.76 7.84 1.96 0.00
Region
_________________________________________________________________________________________________________
Portugal Luxembourg Germany Japan Netherlands Austria Russian Federation Poland Denmark Hungary Spain Finland Switzerland Belgium Brazil Sweden India USA Czech Republic Pakistan Norway France the United Kingdom Chile Canada China Taiwan Singapore Italy South Korea Hong Kong Peru Malaysia Thailand Turkey Mexico Israel Ireland Philippines Australia Indonesia Greece New Zealand
Europe Europe Europe Asia Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Latin America Europe Asia North America Europe the Middle East Europe Europe Europe Latin America North America Asia Asia Asia Europe Asia Asia Latin America Asia Asia the Middle East Latin America the Middle East Europe Asia Oceana Asia Europe Oceana
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
35
Accumulated Depreciation - Total (Sanitary Services) Countries in Europe
Value (total assets = 100)
Rank
Percentile
148.74 142.38 136.33 106.39 90.67 83.55 82.75 80.68 80.68 77.85 77.67 77.48 73.59 73.42 69.66 67.03 66.91 58.84 56.75 51.03 48.52 48.28 47.77 46.55 45.33 45.15 44.26 42.13 40.46 37.42 35.89 34.89 34.82 34.06 34.05 32.78 25.88 25.14 24.94 22.52 21.52 16.47 13.65 12.53 12.17 11.74 11.58 4.36 4.04 3.98 2.49
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 Luxembourg Germany Netherlands Austria San Marino Guernsey Jersey Russian Federation Lithuania Poland Belarus Slovakia Moldova Kazakhstan Bulgaria Denmark Hungary Ukraine Gibraltar Spain Georgia Finland Slovenia Switzerland Belgium Liechtenstein Sweden Iceland Czech Republic Norway France Latvia Croatia the United Kingdom Monaco Vatican City Italy Estonia Faroe Islands Albania Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Ireland Greece Malta Isle of Man Andorra
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
36
Intangible Other Assets Countries
Value (total assets = 100)
Rank
Percentile
34.53 34.24 27.53 13.23 12.58 11.62 10.24 9.69 8.30 8.24 6.60 6.40 5.75 5.75 5.63 5.23 4.38 4.13 3.96 3.91 3.06 1.84 1.65 1.51 1.33 1.20 1.07 0.92 0.89 0.89 0.78 0.65 0.54 0.47 0.41 0.34 0.32 0.16 0.16 0.09 0.06 0.02 0.01
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 18 19 20 21 23 25 26 28 30 31 32 33 34 35 36 37 38 39 40 42 43 45 46 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 64.71 62.75 60.78 58.82 54.90 50.98 49.02 45.10 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 17.65 15.69 11.76 9.80 5.88 3.92 1.96 0.00
Region
_________________________________________________________________________________________________________
Israel Ireland New Zealand Finland Australia France Portugal Italy Austria USA Chile the United Kingdom Norway Hong Kong Switzerland Philippines Malaysia Indonesia Spain Belgium Germany Thailand Netherlands Canada Luxembourg Poland Singapore Czech Republic Sweden China Japan South Africa South Korea Peru Brazil Hungary Greece Turkey Mexico Denmark Russian Federation Pakistan Argentina
the Middle East Europe Oceana Europe Oceana Europe Europe Europe Europe North America Latin America Europe Europe Asia Europe Asia Asia Asia Europe Europe Europe Asia Europe North America Europe Europe Asia Europe Europe Asia Asia Africa Asia Latin America Latin America Europe Europe the Middle East Latin America Europe Europe the Middle East Latin America
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
37
Intangible Other Assets (Sanitary Services) Countries in Europe
Value (total assets = 100)
Rank
Percentile
34.24 28.50 13.23 11.62 10.24 9.80 9.77 9.69 8.32 8.30 8.22 8.02 8.02 6.40 5.75 5.63 5.51 5.26 3.96 3.91 3.71 3.06 1.65 1.33 1.20 1.08 1.04 1.04 1.03 0.92 0.89 0.87 0.87 0.52 0.41 0.34 0.32 0.30 0.30 0.30 0.29 0.28 0.22 0.22 0.16 0.14 0.14 0.13 0.09 0.06 0.06
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
_________________________________________________________________________________________________________
Ireland Andorra Finland France Portugal Cyprus Vatican City Italy Iceland Austria San Marino Guernsey Jersey the United Kingdom Norway Switzerland Faroe Islands Liechtenstein Spain Belgium Slovenia Germany Netherlands Luxembourg Poland Moldova Kazakhstan Bulgaria Monaco Czech Republic Sweden Latvia Croatia Estonia Albania Hungary Greece Ukraine Malta Isle of Man Gibraltar Georgia Belarus Slovakia Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Denmark Russian Federation Lithuania
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.3 3.3.1
FINANCIAL RETURNS RATIOS
IN
38
BULGARIA: LIABILITY STRUCTURE
Overview
In this chapter we consider the liability structure of firms operating in Bulgaria 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 Bulgaria and the average global benchmarks (sometimes referred to as a financial “gap” analysis). The figure reflect firms involved in sanitary services in Bulgaria. For ratios where there are large deviations between Bulgaria 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. •
Accounts Payable. Accounts payable are defined as amounts owed on open account to private persons or organizations for goods or services received.
•
Accrued Payroll. Accrued payroll is defined as the cost of payroll that has been incurred but has not yet been paid. Payroll is typically defined as comprising records detailing the salaries, wages, allowances and deductions for each employee for a specific period of time.
•
Capital Surplus. Capital surplus is commonly defined as an amount of equity which is directly contributed capital in excess of the par value.
•
Capitalized Lease Obligations. A capitalized lease obligation is commonly defined as an ownership arrangement in which the item under lease is typically a long-term asset. Capital leases are generally recorded as assets with liability at the current value of the lease payment.
•
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.
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Financial Indicators
39
•
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.
•
Deferred Taxes. Deferred taxes are compulsory charges from a previous accounting period which are yet unpaid.
•
Deferred Taxes - Credit. Deferred tax credits are defined as credits against compulsory charges from a previous accounting period which are yet unpaid.
•
Long Term Debt. Long-term debt is defined to be due in a period exceeding one year or one operating cycle, whichever is longer. Long-term debt can have an extended repayment period such as a many-year mortgage on land and buildings, or debt that's intended to be permanent such as bonds issued to investors.
•
Long Term Debt Excluding Capitalized Leases. Long term debt excluding capitalized leases is defined as debt which is typically due in a period exceeding one year or one operating cycle, whichever is longer, less capitalized leases (see Long Term Debt for exceptions). Capital leases are generally recorded as assets with liability at the current value of the lease payment.
•
Minority Interest. Minority interest is the proportional share of the minority ownership's interest (less than 50 percent) in the earnings or losses.
•
Non-Equity Reserves. Non-equity reserves are the amount set aside for losses or liabilities which are certain to arise but cannot be quantified with certainty, and are not part of the firm’s equity.
•
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.
•
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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Retained earnings is an equity account reflecting the accumulated earnings of
©2007 Icon Group International, Inc.
Financial Indicators
3.3.3
40
Liability Structure: Outlook
Using the methodology described in the introduction, the following table summarizes liability and equity structure benchmarks for firms involved in sanitary services in Bulgaria. 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 Bulgaria based on latest financial results available. Liability Structure Bulgaria Europe World Avg. _________________________________________________________________________________________________________
Accounts Payable Short Term Debt & Current Portion of Long Term Debt Accrued Payroll Other Current Liabilities Current Liabilities - Total Long Term Debt Long Term Debt Excluding Capitalized Leases Capitalized Lease Obligations Provision For Risks and Charges Deferred Income Deferred Taxes Deferred Taxes - Credit Deferred Taxes - Debit Other Liabilities Total Liabilities Non-Equity Reserves Minority Interest Common Equity Common Stock Capital Surplus Revaluation Reserves Other Appropriated Reserves Retained Earnings Total Liabilities & Shareholders Equity
7.83 3.23 0.08 4.28 15.42 4.95 4.95 0.00 2.08 1.87 0.76 1.97 1.21 0.01 25.09 1.64 2.64 57.81 7.11 14.41 17.67 19.52 -0.90 100.00
7.95 5.36 0.44 8.54 23.15 15.08 14.52 0.57 5.98 3.31 1.38 2.67 1.39 3.34 47.57 3.64 1.20 43.99 14.81 8.45 3.54 7.62 11.50 100.00
6.65 4.71 0.27 6.75 19.54 15.79 15.67 0.12 1.45 0.81 2.40 1.13 0.46 4.13 43.14 1.00 2.20 46.30 15.01 9.48 0.88 6.76 17.55 100.00
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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©2007 Icon Group International, Inc.
Financial Indicators
3.3.4
41
Large Variances: Liabilities
The following graphics summarize for sanitary services the large liability structure gaps between firms operating in Bulgaria 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: Current Liabilities - Total 23.15
25 20
19.54 15.42
15 10 5 0 -5
Bulgaria
Europe
World Average
-4.12 Gap
Gap: Long Term Debt 20 15 10 5 0 -5 -10 -15
15.08
15.79
4.95
-10.84 Bulgaria
Europe
World Average
Gap
Gap: Long Term Debt Excluding Capitalized Leases 20 15 10 5 0 -5 -10 -15
14.52
15.67
4.95
-10.72 Bulgaria
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Europe
World Average
Gap
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Financial Indicators
42
Gap: Other Liabilities 6 3.34
4 2 0
4.13
0.01
-2 -4 -6
-4.12 Bulgaria
Europe
World Average
Gap
Gap: Total Liabilities 60 40
47.57
43.14
25.09
20 0 -20
Bulgaria
Europe
World Average
-18.05 Gap
Gap: Common Equity 60
57.81 43.99
50
46.3
40 30 20
11.51
10 0
Bulgaria
Europe
World Average
Gap
Gap: Common Stock 20
14.81
15 10
15.01
7.11
5 0 -5 -10
-7.9 Bulgaria
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Europe
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
43
Gap: Capital Surplus 15
14.41
8.45
10
9.48 4.93
5 0
Bulgaria
Europe
World Average
Gap
Gap: Revaluation Reserves 20
17.67
16.79
15 10 3.54
5 0
0.88 Bulgaria
Europe
World Average
Gap
Gap: Other Appropriated Reserves 20
19.52
15
12.76
10
7.62
6.76
5 0
Bulgaria
Europe
World Average
Gap
Gap: Retained Earnings 17.55
20
11.5
10 0.9 0 -10 -20
-16.65 Bulgaria
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Europe
World Average
Gap
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Financial Indicators
3.3.5
44
Key Percentiles and Rankings
We now consider the distribution of liability ratios for sanitary services using ranks and percentiles. What percent of countries have a value lower or higher than Bulgaria (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
Bulgaria
Rank of Total
Percentile
7.83 3.23 0.08 4.28 15.42 4.95 4.95 0.00 2.08 1.87 0.76 1.97 1.21 0.01 25.09 1.64 2.64 57.81 7.11 14.41 17.67 19.52 -0.90 100.00
19 of 52 43 of 54 27 of 27 38 of 54 38 of 54 48 of 53 48 of 53 22 of 23 20 of 39 12 of 29 24 of 41 14 of 23 15 of 24 52 of 52 51 of 54 14 of 26 13 of 40 9 of 54 36 of 52 8 of 43 2 of 21 5 of 48 51 of 52
63.46 20.37 0.00 29.63 29.63 9.43 9.43 4.35 48.72 58.62 41.46 39.13 37.50 0.00 5.56 46.15 67.50 83.33 30.77 81.40 90.48 89.58 1.92
_________________________________________________________________________________________________________
Accounts Payable Short Term Debt & Current Portion of Long Term Debt Accrued Payroll Other Current Liabilities Current Liabilities - Total Long Term Debt Long Term Debt Excluding Capitalized Leases Capitalized Lease Obligations Provision For Risks and Charges Deferred Income Deferred Taxes Deferred Taxes - Credit Deferred Taxes - Debit Other Liabilities Total Liabilities Non-Equity Reserves Minority Interest Common Equity Common Stock Capital Surplus Revaluation Reserves Other Appropriated Reserves Retained Earnings Total Liabilities & Shareholders Equity
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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©2007 Icon Group International, Inc.
Financial Indicators
45
Accounts Payable Countries
Value (total liabilities & equity = 100)
Rank
Percentile
21.59 21.43 19.36 15.33 14.63 14.54 14.42 14.01 13.98 11.98 11.59 9.44 9.37 9.07 8.99 8.73 8.19 7.60 7.57 6.58 6.09 5.81 5.57 5.04 5.02 4.68 4.48 4.36 3.93 3.65 3.64 3.64 3.45 3.02 2.94 2.90 2.64 2.55 2.32 2.16 2.00 1.78 1.59
1 2 3 4 5 6 7 8 9 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 32 33 34 36 38 39 40 42 43 45 46 47 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 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 37.25 35.29 33.33 29.41 25.49 23.53 21.57 17.65 15.69 11.76 9.80 7.84 1.96 0.00
Region
_________________________________________________________________________________________________________
Singapore Netherlands South Korea Luxembourg Czech Republic Israel Ireland Turkey Mexico Russian Federation India New Zealand Italy Poland Belgium Canada France Spain Switzerland Pakistan Hungary the United Kingdom USA Denmark Norway Germany Portugal Philippines Brazil Peru Chile Hong Kong Indonesia Japan Austria China Sweden Australia Thailand Finland Taiwan Malaysia Greece
Asia Europe Asia Europe Europe the Middle East Europe the Middle East Latin America Europe Asia Oceana Europe Europe Europe North America Europe Europe Europe the Middle East Europe Europe North America Europe Europe Europe Europe Asia Latin America Latin America Latin America Asia Asia Asia Europe Asia Europe Oceana Asia Europe Asia Asia Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
46
Accounts Payable (Sanitary Services) Countries in Europe
Value (total liabilities & equity = 100)
Rank
Percentile
21.43 20.94 18.67 15.33 14.63 14.42 13.89 13.88 13.31 12.22 11.98 11.96 11.87 11.45 9.77 9.45 9.37 9.07 8.99 8.19 8.15 7.85 7.83 7.60 7.57 7.14 7.07 6.09 5.81 5.63 5.48 5.21 5.13 5.04 5.02 4.68 4.48 4.29 3.49 3.47 3.46 3.19 2.94 2.91 2.84 2.84 2.64 2.16 1.59 1.48 1.46
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
_________________________________________________________________________________________________________
Netherlands Monaco Estonia Luxembourg Czech Republic Ireland Latvia Croatia Romania Bosnia & Herzegovina Russian Federation Lithuania Macedonia Serbia & Montenegro Andorra Vatican City Italy Poland Belgium France Moldova Kazakhstan Bulgaria Spain Switzerland Slovenia Liechtenstein Hungary the United Kingdom Iceland Ukraine Gibraltar Georgia Denmark Norway Germany Portugal Cyprus Faroe Islands Belarus Slovakia Albania Austria San Marino Guernsey Jersey Sweden Finland Greece Malta Isle of Man
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
47
Current Liabilities - Total Countries
Value (total liabilities & equity = 100)
Rank
Percentile
43.35 37.78 34.09 32.31 32.30 31.60 31.51 31.08 30.85 30.82 30.29 27.70 27.66 25.04 24.81 24.58 24.36 23.13 21.59 21.59 21.49 21.01 20.92 20.11 19.47 19.04 19.00 18.36 17.97 17.89 17.86 17.85 17.53 17.53 17.30 14.93 14.67 13.66 13.01 12.72 12.36 12.35 11.80 8.64 8.61
1 2 3 4 5 6 7 8 9 10 11 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 38 39 40 41 42 44 45 46 49 50
98.11 96.23 94.34 92.45 90.57 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 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 28.30 26.42 24.53 22.64 20.75 16.98 15.09 13.21 7.55 5.66
Region
_________________________________________________________________________________________________________
Netherlands South Korea Singapore Italy Hungary Turkey Mexico Israel Denmark Ireland Czech Republic France Japan the United Kingdom Spain Pakistan Norway India Luxembourg South Africa Austria Belgium Russian Federation Finland Portugal Germany China Chile USA Canada Switzerland Poland Greece Argentina New Zealand Philippines Australia Hong Kong Peru Brazil Sweden Malaysia Indonesia Taiwan Thailand
Europe Asia Asia Europe Europe the Middle East Latin America the Middle East Europe Europe Europe Europe Asia Europe Europe the Middle East Europe Asia Europe Africa Europe Europe Europe Europe Europe Europe Asia Latin America North America North America Europe Europe Europe Latin America Oceana Asia Oceana Asia Latin America Latin America Europe Asia Asia Asia Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
48
Current Liabilities - Total (Sanitary Services) Countries in Europe
Value (total liabilities & equity = 100)
Rank
Percentile
43.35 36.43 33.06 32.57 32.31 32.30 30.85 30.82 30.29 30.02 29.05 28.75 28.74 27.70 27.62 27.55 27.19 26.78 25.83 25.04 24.81 24.36 23.29 21.59 21.49 21.29 21.01 20.92 20.88 20.75 20.75 20.11 19.47 19.04 18.64 18.16 17.92 17.86 17.85 17.53 16.99 16.95 16.67 16.25 16.05 16.04 15.44 15.42 13.10 12.36 11.35
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
_________________________________________________________________________________________________________
Netherlands Estonia Monaco Vatican City Italy Hungary Denmark Ireland Czech Republic Romania Ukraine Latvia Croatia France Gibraltar Bosnia & Herzegovina Georgia Macedonia Serbia & Montenegro the United Kingdom Spain Norway Slovenia Luxembourg Austria San Marino Belgium Russian Federation Lithuania Guernsey Jersey Finland Portugal Germany Cyprus Iceland Andorra Switzerland Poland Greece Belarus Slovakia Liechtenstein Malta Moldova Isle of Man Kazakhstan Bulgaria Faroe Islands Sweden Albania
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
49
Long Term Debt Countries
Value (total liabilities & equity = 100)
Rank
Percentile
47.88 43.51 39.30 37.32 35.27 34.64 33.94 31.73 27.48 27.34 27.10 26.00 25.25 25.18 24.86 24.56 21.64 19.98 19.66 19.31 19.26 19.15 19.06 18.91 17.35 16.96 16.60 16.53 15.59 15.43 14.47 12.55 12.29 9.59 9.24 8.22 7.17 6.84 5.73 2.01 1.24 1.06 0.35 0.05
1 2 4 5 7 8 9 10 11 12 13 15 16 17 18 19 21 23 24 25 26 27 28 29 31 32 33 34 35 36 37 39 40 42 43 44 45 46 47 48 49 50 51 52
98.08 96.15 92.31 90.38 86.54 84.62 82.69 80.77 78.85 76.92 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 40.38 38.46 36.54 34.62 32.69 30.77 28.85 25.00 23.08 19.23 17.31 15.38 13.46 11.54 9.62 7.69 5.77 3.85 1.92 0.00
Region
_________________________________________________________________________________________________________
Thailand Canada Japan Australia Norway Portugal Sweden USA Malaysia Netherlands Pakistan Finland Turkey Mexico Philippines New Zealand the United Kingdom Austria Indonesia Chile Belgium Spain Israel Ireland South Africa Italy China France South Korea Peru Switzerland Hong Kong Denmark India Czech Republic Luxembourg Germany Brazil Poland Singapore Hungary Russian Federation Greece Taiwan
Asia North America Asia Oceana Europe Europe Europe North America Asia Europe the Middle East Europe the Middle East Latin America Asia Oceana Europe Europe Asia Latin America Europe Europe the Middle East Europe Africa Europe Asia Europe Asia Latin America Europe Asia Europe Asia Europe Europe Europe Latin America Europe Asia Europe Europe Europe Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
50
Long Term Debt (Sanitary Services) Countries in Europe
Value (total liabilities & equity = 100)
Rank
Percentile
35.27 34.64 33.94 33.16 32.06 27.34 27.14 27.08 26.00 25.43 23.99 22.01 21.64 21.39 20.64 19.98 19.79 19.30 19.30 19.26 19.15 18.91 17.98 17.10 16.96 16.53 15.03 14.47 13.50 13.47 12.29 12.03 9.24 8.77 8.77 8.22 7.17 5.73 5.15 4.96 4.95 1.94 1.24 1.11 1.06 1.06 1.06 1.04 0.35 0.32 0.32
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 Portugal Sweden Cyprus Iceland Netherlands Belarus Slovakia Finland Andorra Romania Bosnia & Herzegovina the United Kingdom Macedonia Serbia & Montenegro Austria San Marino Guernsey Jersey Belgium Spain Ireland Slovenia Vatican City Italy France Estonia Switzerland Liechtenstein Albania Denmark Faroe Islands Czech Republic Latvia Croatia Luxembourg Germany Poland Moldova Kazakhstan Bulgaria Monaco Hungary Ukraine Russian Federation Gibraltar Lithuania Georgia Greece Malta Isle of Man
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
51
Total Liabilities Countries
Value (total liabilities & equity = 100)
Rank
Percentile
75.08 74.25 67.54 66.32 65.55 65.44 62.79 62.51 62.47 62.13 61.96 60.76 60.43 59.09 58.60 58.47 57.43 57.36 56.43 56.28 54.92 54.90 54.30 52.49 51.40 50.97 50.43 49.90 49.02 47.51 47.29 44.43 40.70 40.13 38.91 38.12 36.90 36.84 32.78 30.77 29.51 29.05 27.84 22.80 17.76
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 29 30 32 33 36 37 38 39 40 41 42 44 45 47 48 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 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 37.74 32.08 30.19 28.30 26.42 24.53 22.64 20.75 16.98 15.09 11.32 9.43 5.66 3.77 0.00
Region
_________________________________________________________________________________________________________
Netherlands Japan USA France Pakistan Canada Norway Germany Sweden Turkey Mexico Portugal Switzerland South Africa Finland Thailand Italy Austria Belgium Australia South Korea the United Kingdom Spain Malaysia Israel Ireland Denmark New Zealand Chile Czech Republic India Luxembourg Peru Singapore Philippines Taiwan China Hungary Greece Indonesia Hong Kong Poland Brazil Russian Federation Argentina
Europe Asia North America Europe the Middle East North America Europe Europe Europe the Middle East Latin America Europe Europe Africa Europe Asia Europe Europe Europe Oceana Asia Europe Europe Asia the Middle East Europe Europe Oceana Latin America Europe Asia Europe Latin America Asia Asia Asia Asia Europe Europe Asia Asia Europe Latin America Europe Latin America
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
52
Total Liabilities (Sanitary Services) Countries in Europe
Value (total liabilities & equity = 100)
Rank
Percentile
75.08 68.24 66.32 62.79 62.51 62.47 60.76 60.43 59.03 58.60 58.16 57.89 57.43 57.36 56.81 56.43 56.39 55.39 55.39 54.90 54.30 54.17 52.94 52.65 51.67 50.97 50.97 50.78 50.43 47.51 46.87 46.77 45.09 45.07 44.43 38.92 36.84 35.53 33.13 32.78 31.50 31.01 30.39 29.99 29.05 28.30 26.12 25.13 25.09 22.80 22.75
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
_________________________________________________________________________________________________________
Netherlands Iceland France Norway Germany Sweden Portugal Switzerland Romania Finland Cyprus Vatican City Italy Austria San Marino Belgium Liechtenstein Guernsey Jersey the United Kingdom Spain Bosnia & Herzegovina Estonia Macedonia Andorra Ireland Slovenia Serbia & Montenegro Denmark Czech Republic Belarus Slovakia Latvia Croatia Luxembourg Monaco Hungary Albania Ukraine Greece Gibraltar Georgia Malta Isle of Man Poland Faroe Islands Moldova Kazakhstan Bulgaria Russian Federation Lithuania
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
53
Common Equity Countries
Value (total liabilities & equity = 100)
Rank
Percentile
82.24 75.90 66.94 63.16 61.88 61.34 59.30 57.89 55.37 54.20 53.41 52.71 51.89 50.11 50.10 49.43 49.03 48.61 48.12 45.31 44.67 42.89 41.92 41.89 40.83 40.69 39.62 38.53 37.87 37.77 37.27 37.02 34.37 33.98 31.25 31.01 30.41 30.36 30.17 29.44 29.11 27.97 27.66 25.26 17.40
1 2 3 4 5 6 7 8 9 10 11 12 14 15 16 17 18 19 20 21 22 24 26 27 28 29 30 31 32 33 35 36 38 40 42 43 44 45 46 47 48 50 51 52 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 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 54.72 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 33.96 32.08 28.30 24.53 20.75 18.87 16.98 15.09 13.21 11.32 9.43 5.66 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Argentina Russian Federation Poland Hungary Taiwan Hong Kong Peru China Singapore Luxembourg Greece India Czech Republic Philippines New Zealand Israel Ireland Brazil Chile Malaysia South Korea the United Kingdom Australia Spain Thailand South Africa Indonesia Italy Turkey Mexico Switzerland Belgium Pakistan Denmark Portugal Austria Finland USA Norway Canada Germany Sweden France Japan Netherlands
Latin America Europe Europe Europe Asia Asia Latin America Asia Asia Europe Europe Asia Europe Asia Oceana the Middle East Europe Latin America Latin America Asia Asia Europe Oceana Europe Asia Africa Asia Europe the Middle East Latin America Europe Europe the Middle East Europe Europe Europe Europe North America Europe North America Europe Europe Europe Asia Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
54
Common Equity (Sanitary Services) Countries in Europe
Value (total liabilities & equity = 100)
Rank
Percentile
75.90 75.72 66.94 63.16 60.19 58.82 57.92 57.81 56.80 54.20 54.00 53.69 53.41 53.17 52.37 52.25 51.89 51.88 51.76 49.50 49.25 49.23 49.03 48.85 43.07 42.89 41.89 39.32 38.84 38.53 37.27 37.02 35.99 34.77 33.98 33.02 32.10 31.25 31.01 30.96 30.71 30.67 30.41 30.17 29.94 29.94 29.92 29.11 27.97 27.66 17.40
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
_________________________________________________________________________________________________________
Russian Federation Lithuania Poland Hungary Moldova Faroe Islands Kazakhstan Bulgaria Ukraine Luxembourg Gibraltar Monaco Greece Georgia Belarus Slovakia Czech Republic Andorra Albania Malta Latvia Croatia Ireland Isle of Man Estonia the United Kingdom Spain Slovenia Vatican City Italy Switzerland Belgium Romania Liechtenstein Denmark Bosnia & Herzegovina Macedonia Portugal Austria Serbia & Montenegro San Marino Iceland Finland Norway Jersey Guernsey Cyprus Germany Sweden France Netherlands
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
55
Retained Earnings Countries
Value (total liabilities & equity = 100)
Rank
Percentile
45.06 44.69 42.13 32.11 27.59 24.28 23.86 22.97 22.91 22.44 21.66 20.16 19.79 17.78 17.78 17.13 16.12 15.80 15.76 15.56 13.28 12.83 11.11 10.61 9.62 9.34 9.10 8.60 7.90 7.55 7.04 6.34 6.30 6.05 5.48 3.80 3.34 3.20 2.86 2.50 1.44 0.00 -1.04
1 2 3 4 5 6 7 8 9 10 11 12 13 15 16 17 19 20 21 22 26 27 29 30 31 32 33 34 35 36 37 39 40 41 42 43 44 45 46 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 70.59 68.63 66.67 62.75 60.78 58.82 56.86 49.02 47.06 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 5.88 3.92 1.96 0.00
Region
_________________________________________________________________________________________________________
Israel Ireland India South Africa the United Kingdom Norway Switzerland Austria New Zealand Hong Kong Philippines Finland Denmark Thailand Czech Republic Indonesia Malaysia Turkey Mexico Japan Singapore Canada USA Germany Portugal South Korea Greece Russian Federation Chile China Spain Argentina Italy Australia Sweden Peru Luxembourg France Brazil Taiwan Hungary Pakistan Poland
the Middle East Europe Asia Africa Europe Europe Europe Europe Oceana Asia Asia Europe Europe Asia Europe Asia Asia the Middle East Latin America Asia Asia North America North America Europe Europe Asia Europe Europe Latin America Asia Europe Latin America Europe Oceana Europe Latin America Europe Europe Latin America Asia Europe the Middle East Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Financial Indicators
56
Retained Earnings (Sanitary Services) Countries in Europe
Value (total liabilities & equity = 100)
Rank
Percentile
44.69 27.59 24.28 23.86 23.73 22.97 22.75 22.26 22.19 22.19 21.52 20.16 19.79 17.78 16.87 16.86 15.02 13.78 13.39 12.92 12.88 11.22 10.61 9.62 9.21 9.10 9.00 8.60 8.58 8.43 8.32 7.04 6.72 6.70 6.61 6.35 6.30 5.48 3.34 3.31 3.20 1.44 1.29 1.23 1.21 -0.90 -0.90 -0.93 -1.04
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
97.96 95.92 93.88 91.84 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 63.27 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 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
_________________________________________________________________________________________________________
Ireland the United Kingdom Norway Switzerland Andorra Austria San Marino Liechtenstein Guernsey Jersey Faroe Islands Finland Denmark Czech Republic Latvia Croatia Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Monaco Iceland Germany Portugal Cyprus Greece Estonia Russian Federation Lithuania Malta Isle of Man Spain Belarus Slovakia Slovenia Vatican City Italy Sweden Luxembourg Albania France Hungary Ukraine Gibraltar Georgia Bulgaria Kazakhstan Moldova Poland
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.4 3.4.1
FINANCIAL RETURNS RATIOS
IN
57
BULGARIA: INCOME STRUCTURE
Overview
In this chapter we consider the income structure of companies operating in Bulgaria 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 sanitary services operating in Bulgaria and the average global benchmarks (total revenue = 100 percent). For ratios where there are large deviations between Bulgaria 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 charged with a portion of such cost. Through this process, the cost of the asset is ultimately charged off as an expense.
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Financial Indicators
58
•
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.
•
Equity in Earnings. Equity in earnings is defined as a company's proportional share (based on ownership) of the net earnings or losses of an unconsolidated company.
•
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.
•
Minority Interest. Minority interest is the proportional share of the minority ownership's interest (less than 50 percent) in the earnings or losses.
•
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 Equity In Earnings. Pretax equity in earnings is generally defined to equal a company's proportional share (based on ownership) of the gross earnings or losses of an unconsolidated company.
•
Pretax Income. Pretax income is generally defined as income before tax deductions.
•
Selling, General & Administrative Expenses. Selling, general and administrative expenses are expenses independent from cost of sales for the purpose of illustrating the amount of the company's selling and administrative costs. Generally included in this figure are the costs of employees' salaries, commissions, and travel expenses; company payroll and office costs; and advertising and promotion.
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Financial Indicators
3.4.3
59
Income Structure: Outlook
Using the methodology described in the introduction, the following table summarizes income structure benchmarks for firms involved in sanitary services in Bulgaria. 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 Bulgaria based on latest financial results available. Income Structure Bulgaria Europe World Avg. _________________________________________________________________________________________________________
Net Sales or Revenues Cost of Goods Sold (Excluding Depreciation) Depreciation, Depletion & Amortization Gross Income Selling, General & Administrative Expenses Other Operating Expenses Operating Expenses - Total Operating Income Extraordinary Credit - Pretax Extraordinary Charge - Pretax Non-Operating Interest Income Pretax Equity In Earnings 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 Minority Interest Equity in Earnings After Tax Other Income/Expense Net Income Before Extra Items/Prefer Dividends Net Income Before Preferred Dividends Net Income Available to Common
100.00 69.44 10.34 6.58 7.26 88.60 1.57 -2.24 0.00 0.00 2.98 0.03 -0.19 0.57 2.61 -2.04 -0.28 0.05 -0.39 -0.19 0.00 -0.06 -1.59 -1.59 -1.59
100.00 64.69 10.02 21.70 9.88 84.13 4.79 11.40 0.88 1.73 3.20 0.13 5.92 19.11 4.38 14.74 3.64 2.69 0.41 0.04 0.48 -0.07 11.09 11.10 11.02
100.00 55.52 9.96 26.33 5.29 69.79 3.78 20.28 0.34 0.50 2.12 -0.08 1.81 23.37 4.13 19.38 4.49 2.11 0.12 1.31 0.08 0.17 13.56 13.55 13.54
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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©2007 Icon Group International, Inc.
Financial Indicators
3.4.4
60
Large Variances: Income
The following graphics summarize for sanitary services the large income structure gaps between firms operating in Bulgaria 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) 80
69.44
64.69 55.52
60 40
13.92
20 0
Bulgaria
Europe
World Average
Gap
Gap: Gross Income 30
21.7
26.33
20 10
6.58
0 -10 -20
Bulgaria
Europe
-19.75 Gap
World Average
Gap: Other Operating Expenses 100
88.6
84.13 69.79
80 60 40
18.81
20 0
Bulgaria
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Europe
World Average
Gap
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Financial Indicators
61
Gap: Operating Expenses - Total 6
4.79
4 2
3.78
1.57
0 -2 -4
-2.21 Bulgaria
Europe
World Average
Gap
Gap: Operating Income 30
20.28
20 10
11.4 2.24
0 -10 -20
Bulgaria
Europe
World Average
-18.04 Gap
Gap: Earnings Before Interest and Taxes (EBIT) 30
19.11
20 10
23.37
0.57
0 -10 -20 -30
-22.8 Bulgaria
Europe
World Average
Gap
Gap: Pretax Income 19.38
20 10
14.74 2.04
0 -10 -20
-17.34 Bulgaria
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Europe
World Average
Gap
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Financial Indicators
62
Gap: Income Taxes 6
3.64
4 2
4.49
0.28
0 -2 -4 -6
-4.21 Bulgaria
Europe
World Average
Gap
Gap: Net Income Before Extra Items/Prefer Dividends 15
11.09
13.56
10 5
1.59
0 -5 -10 -15
-11.97 Bulgaria
Europe
World Average
Gap
Gap: Net Income Before Preferred Dividends 15
11.1
13.55
10 5
1.59
0 -5 -10 -15
-11.96 Bulgaria
Europe
World Average
Gap
Gap: Net Income Available to Common 15
11.02
13.54
10 5
1.59
0 -5 -10 -15
-11.95 Bulgaria
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Europe
World Average
Gap
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Financial Indicators
3.4.5
63
Key Percentiles and Rankings
We now consider the distribution of income ratios for sanitary services using ranks and percentiles. What percent of countries have a value lower or higher than Bulgaria (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
Bulgaria
Rank of Total
Percentile
100.00 69.44 10.34 6.58 7.26 88.60 1.57 -2.24 0.00 0.00 2.98 0.03 -0.19 0.57 2.61 -2.04 -0.28 0.05 -0.39 -0.19 0.00 -0.06 -1.59 -1.59 -1.59
16 of 53 29 of 54 51 of 53 22 of 37 22 of 52 34 of 45 53 of 54 29 of 29 36 of 37 11 of 52 14 of 33 47 of 54 54 of 54 41 of 54 53 of 54 53 of 54 39 of 39 30 of 34 35 of 37 17 of 18 4 of 9 53 of 54 53 of 54 53 of 54
69.81 46.30 3.77 40.54 57.69 24.44 1.85 0.00 2.70 78.85 57.58 12.96 0.00 24.07 1.85 1.85 0.00 11.76 5.41 5.56 55.56 1.85 1.85 1.85
_________________________________________________________________________________________________________
Net Sales or Revenues Cost of Goods Sold (Excluding Depreciation) Depreciation, Depletion & Amortization Gross Income Selling, General & Administrative Expenses Other Operating Expenses Operating Expenses - Total Operating Income Extraordinary Credit - Pretax Extraordinary Charge - Pretax Non-Operating Interest Income Pretax Equity In Earnings 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 Minority Interest Equity in Earnings After Tax Other Income/Expense 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
64
Cost of Goods Sold (Excluding Depreciation) Countries
Value (total revenue = 100)
Rank
Percentile
89.77 85.48 84.41 81.99 81.66 80.98 80.41 80.14 78.27 78.04 76.78 76.76 76.59 72.32 70.33 69.01 69.00 64.56 64.42 64.23 63.85 63.75 63.00 59.48 59.13 59.10 58.60 58.44 56.71 55.31 55.19 54.97 53.65 53.20 51.86 50.94 50.44 49.46 46.57 43.59 41.85 40.78 37.25 29.45
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 34 35 36 37 38 39 40 41 42 43 45 50
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 34.62 32.69 30.77 28.85 26.92 25.00 23.08 21.15 19.23 17.31 13.46 3.85
Region
_________________________________________________________________________________________________________
Netherlands Belgium Hungary South Korea Israel Ireland Poland Russian Federation Czech Republic Denmark Portugal Germany Taiwan India France New Zealand Austria Spain Singapore Finland Luxembourg Sweden Switzerland Japan Canada Pakistan Turkey Mexico the United Kingdom Chile Argentina USA China Italy Peru Hong Kong Norway Brazil Malaysia Greece Australia Thailand Philippines Indonesia
Europe Europe Europe Asia the Middle East Europe Europe Europe Europe Europe Europe Europe Asia Asia Europe Oceana Europe Europe Asia Europe Europe Europe Europe Asia North America the Middle East the Middle East Latin America Europe Latin America Latin America North America Asia Europe Latin America Asia Europe Latin America Asia Europe Oceana Asia Asia Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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©2007 Icon Group International, Inc.
Financial Indicators
65
Cost of Goods Sold (Excluding Depreciation) (Sanitary Services) Countries in Europe
Value (total revenue = 100)
Rank
Percentile
89.77 85.48 84.41 80.98 80.41 80.14 79.95 79.05 78.27 78.04 76.78 76.76 75.91 74.30 74.26 73.49 72.29 72.17 71.46 71.06 70.33 69.57 69.44 69.00 68.35 66.64 66.64 64.56 64.23 63.85 63.75 63.00 62.47 60.61 58.79 56.71 55.68 55.53 53.63 53.20 51.09 50.44 49.66 48.85 47.90 45.27 43.59 40.40 39.87 35.71 35.63
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
_________________________________________________________________________________________________________
Netherlands Belgium Hungary Ireland Poland Russian Federation Lithuania Estonia Czech Republic Denmark Portugal Germany Ukraine Latvia Croatia Cyprus Moldova Gibraltar Andorra Georgia France Kazakhstan Bulgaria Austria San Marino Jersey Guernsey Spain Finland Luxembourg Sweden Switzerland Monaco Slovenia Liechtenstein the United Kingdom Romania Iceland Vatican City Italy Bosnia & Herzegovina Norway Macedonia Faroe Islands Serbia & Montenegro Albania Greece Malta Isle of Man Belarus Slovakia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
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Financial Indicators
66
Selling, General & Administrative Expenses Countries
Value (total revenue = 100)
Rank
Percentile
30.95 28.57 28.31 27.14 25.60 19.02 16.57 15.93 14.74 14.45 12.69 11.91 11.61 10.74 9.70 9.22 8.79 8.40 7.62 7.60 7.48 7.23 6.91 6.11 5.88 5.47 5.37 5.01 4.48 3.93 0.95 0.06
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 24 25 26 28 29 31 32 33 35 36
97.22 94.44 91.67 88.89 86.11 83.33 80.56 77.78 75.00 72.22 69.44 66.67 63.89 61.11 58.33 55.56 52.78 50.00 47.22 44.44 41.67 38.89 33.33 30.56 27.78 22.22 19.44 13.89 11.11 8.33 2.78 0.00
Region
_________________________________________________________________________________________________________
Japan Norway Greece Brazil France Italy Finland the United Kingdom USA Canada Chile New Zealand Taiwan Australia Singapore Denmark Sweden Poland Turkey Mexico Germany Malaysia Thailand Switzerland Hungary Hong Kong China South Korea Peru Pakistan Austria Russian Federation
Asia Europe Europe Latin America Europe Europe Europe Europe North America North America Latin America Oceana Asia Oceana Asia Europe Europe Europe the Middle East Latin America Europe Asia Asia Europe Europe Asia Asia Asia Latin America the Middle East Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Financial Indicators
67
Selling, General & Administrative Expenses (Sanitary Services) Countries in Europe
Value (total revenue = 100)
Rank
Percentile
28.57 28.31 26.24 25.89 25.60 19.17 19.02 16.57 15.93 14.89 12.34 9.40 9.22 8.79 8.40 7.55 7.48 7.27 7.26 7.24 6.64 6.46 6.23 6.11 5.88 5.71 5.28 5.25 5.02 4.95 4.83 3.91 0.95 0.94 0.92 0.92 0.06 0.06
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
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
_________________________________________________________________________________________________________
Norway Greece Malta Isle of Man France Vatican City Italy Finland the United Kingdom Iceland Andorra Monaco Denmark Sweden Poland Moldova Germany Kazakhstan Bulgaria Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Switzerland Hungary Liechtenstein Ukraine Faroe Islands Gibraltar Georgia Estonia Albania Austria San Marino Guernsey Jersey Russian Federation Lithuania
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Financial Indicators
68
Operating Expenses - Total Countries
Value (total revenue = 100)
Rank
Percentile
23.87 15.69 14.73 13.28 13.25 12.63 12.53 10.96 10.48 10.18 9.22 8.71 7.49 7.17 6.45 6.37 5.86 5.22 5.09 4.88 3.56 3.18 3.08 2.37 1.97 1.91 1.86 1.81 1.70 1.28 0.90 0.83 0.62 0.59 0.43 0.02 0.01
1 2 3 4 5 6 7 9 10 11 14 15 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 39 41 42 43 44
97.73 95.45 93.18 90.91 88.64 86.36 84.09 79.55 77.27 75.00 68.18 65.91 61.36 59.09 56.82 54.55 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 11.36 6.82 4.55 2.27 0.00
Region
_________________________________________________________________________________________________________
Belgium Singapore Norway USA Philippines Israel Ireland Switzerland Indonesia Canada Germany France Russian Federation Luxembourg the United Kingdom Australia Spain Austria Italy Brazil Hong Kong Czech Republic China Hungary Portugal Japan India Poland Malaysia Finland Thailand Peru Netherlands Sweden South Korea Pakistan Denmark
Europe Asia Europe North America Asia the Middle East Europe Europe Asia North America Europe Europe Europe Europe Europe Oceana Europe Europe Europe Latin America Asia Europe Asia Europe Europe Asia Asia Europe Asia Europe Asia Latin America Europe Europe Asia the Middle East Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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©2007 Icon Group International, Inc.
Financial Indicators
69
Operating Expenses - Total (Sanitary Services) Countries in Europe
Value (total revenue = 100)
Rank
Percentile
23.87 15.21 14.73 13.41 12.53 10.96 10.22 9.89 9.87 9.22 8.71 7.49 7.47 7.17 6.45 5.86 5.50 5.22 5.17 5.13 5.09 5.04 5.04 3.42 3.18 3.02 3.02 2.37 2.13 2.02 1.99 1.97 1.88 1.81 1.63 1.57 1.57 1.28 0.72 0.62 0.59 0.41 0.01
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
_________________________________________________________________________________________________________
Belgium Monaco Norway Iceland Ireland Switzerland Liechtenstein Belarus Slovakia Germany France Russian Federation Lithuania Luxembourg the United Kingdom Spain Slovenia Austria San Marino Vatican City Italy Guernsey Jersey Faroe Islands Czech Republic Latvia Croatia Hungary Ukraine Gibraltar Georgia Portugal Cyprus Poland Moldova Kazakhstan Bulgaria Finland Albania Netherlands Sweden Estonia Denmark
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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©2007 Icon Group International, Inc.
Financial Indicators
70
Operating Income Countries
Value (total revenue = 100)
Rank
Percentile
44.32 37.92 35.04 34.23 33.02 32.11 31.87 27.86 26.54 25.24 25.01 24.94 24.39 20.12 19.55 18.79 18.52 18.49 18.45 16.94 16.67 15.07 13.05 12.87 12.29 11.88 9.68 9.41 9.26 9.14 8.89 8.68 8.29 7.99 7.11 6.98 6.16 4.75 3.71 3.68 2.76 2.16 1.13 0.69 -2.59
1 2 4 5 6 9 10 13 14 15 17 18 19 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 52 53
98.11 96.23 92.45 90.57 88.68 83.02 81.13 75.47 73.58 71.70 67.92 66.04 64.15 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 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Philippines Thailand Indonesia Hong Kong Malaysia Peru Australia Pakistan China Argentina Turkey Mexico Chile Sweden South Africa Greece the United Kingdom India Canada USA Spain Brazil New Zealand Switzerland Singapore Italy Portugal Czech Republic Luxembourg Japan Finland Belgium Austria Denmark France South Korea Russian Federation Norway Israel Ireland Hungary Germany Taiwan Netherlands Poland
Asia Asia Asia Asia Asia Latin America Oceana the Middle East Asia Latin America the Middle East Latin America Latin America Europe Africa Europe Europe Asia North America North America Europe Latin America Oceana Europe Asia Europe Europe Europe Europe Asia Europe Europe Europe Europe Europe Asia Europe Europe the Middle East Europe Europe Europe Asia Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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©2007 Icon Group International, Inc.
Financial Indicators
71
Operating Income (Sanitary Services) Countries in Europe
Value (total revenue = 100)
Rank
Percentile
33.06 32.98 32.82 28.02 23.76 21.81 21.19 20.44 20.12 18.79 18.52 17.41 17.18 17.11 16.67 15.65 13.52 12.87 12.01 11.97 11.92 11.88 9.68 9.41 9.26 9.26 8.93 8.93 8.89 8.68 8.29 8.22 8.01 8.01 7.99 7.11 6.73 6.16 6.14 4.75 3.68 2.76 2.48 2.36 2.32 2.16 0.69 -2.24 -2.24 -2.33 -2.59
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
_________________________________________________________________________________________________________
Belarus Slovakia Faroe Islands Albania Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Sweden Greece the United Kingdom Malta Isle of Man Iceland Spain Slovenia Andorra Switzerland Liechtenstein Vatican City Monaco Italy Portugal Czech Republic Cyprus Luxembourg Latvia Croatia Finland Belgium Austria San Marino Jersey Guernsey Denmark France Estonia Russian Federation Lithuania Norway Ireland Hungary Ukraine Gibraltar Georgia Germany Netherlands Bulgaria Kazakhstan Moldova Poland
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
72
Earnings Before Interest and Taxes (EBIT) Countries
Value (total revenue = 100)
Rank
Percentile
59.23 56.58 46.01 41.49 37.74 36.90 36.38 35.92 35.82 32.78 30.79 30.56 28.23 25.76 24.97 23.99 23.62 23.16 22.75 22.52 21.88 20.93 20.90 20.28 19.48 18.67 16.93 16.52 16.02 13.31 12.72 12.58 12.34 11.92 11.29 9.69 8.71 8.69 8.67 8.21 7.97 5.53 3.43 3.40 0.66
1 2 3 4 6 7 8 9 10 15 17 18 19 21 22 23 24 25 26 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 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 71.70 67.92 66.04 64.15 60.38 58.49 56.60 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 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Greece New Zealand Philippines Thailand Malaysia Hong Kong Indonesia Turkey Mexico Australia Pakistan Peru China Chile Luxembourg South Africa Sweden Argentina India Canada Spain the United Kingdom Switzerland Brazil Czech Republic Italy USA Singapore Finland Austria Belgium Germany Portugal Russian Federation Taiwan Norway France Netherlands Japan Denmark South Korea Hungary Israel Ireland Poland
Europe Oceana Asia Asia Asia Asia Asia the Middle East Latin America Oceana the Middle East Latin America Asia Latin America Europe Africa Europe Latin America Asia North America Europe Europe Europe Latin America Europe Europe North America Asia Europe Europe Europe Europe Europe Europe Asia Europe Europe Europe Asia 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
73
Earnings Before Interest and Taxes (EBIT) (Sanitary Services) Countries in Europe
Value (total revenue = 100)
Rank
Percentile
59.23 58.59 54.90 54.18 35.48 35.40 35.38 34.13 31.32 30.44 29.36 26.68 24.97 23.62 21.88 20.93 20.90 20.54 19.51 19.48 18.82 18.67 18.49 18.48 17.10 16.02 16.02 13.31 13.18 12.85 12.85 12.72 12.58 12.34 11.92 11.89 11.82 9.69 8.71 8.69 8.21 7.68 5.53 4.97 4.73 4.65 3.40 0.66 0.59 0.57 0.57
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 Andorra Malta Isle of Man Belarus Slovakia Faroe Islands Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Albania Luxembourg Sweden Spain the United Kingdom Switzerland Slovenia Liechtenstein Czech Republic Vatican City Italy Latvia Croatia Iceland Monaco Finland Austria San Marino Jersey Guernsey Belgium Germany Portugal Russian Federation Lithuania Cyprus Norway France Netherlands Denmark Estonia Hungary Ukraine Gibraltar Georgia Ireland Poland Moldova Kazakhstan Bulgaria
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
74
Pretax Income Countries
Value (total revenue = 100)
Rank
Percentile
58.88 51.62 35.41 34.75 32.00 28.00 26.61 26.54 25.58 25.12 24.71 23.67 23.12 22.61 21.79 19.77 17.20 17.02 15.96 15.93 15.21 14.04 13.40 13.30 12.96 11.35 11.20 11.09 10.56 10.31 9.54 9.46 9.06 8.09 6.52 6.47 5.43 5.42 5.17 4.49 2.96 2.60 1.66 1.65 -2.36
1 2 3 4 5 7 9 10 12 13 14 16 17 18 19 22 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 52 53
98.11 96.23 94.34 92.45 90.57 86.79 83.02 81.13 77.36 75.47 73.58 69.81 67.92 66.04 64.15 58.49 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 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Greece New Zealand Philippines Hong Kong Malaysia Indonesia Turkey Mexico China Thailand Peru Luxembourg Pakistan Argentina India Chile Switzerland Australia Spain the United Kingdom Italy South Africa Singapore Canada Sweden Russian Federation Taiwan USA Germany Brazil Finland Czech Republic Austria Belgium France South Korea Japan Denmark Hungary Portugal Netherlands Norway Israel Ireland Poland
Europe Oceana Asia Asia Asia Asia the Middle East Latin America Asia Asia Latin America Europe the Middle East Latin America Asia Latin America Europe Oceana Europe Europe Europe Africa Asia North America Europe Europe Asia North America Europe Latin America Europe Europe Europe Europe Europe Asia Asia Europe Europe Europe 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
75
Pretax Income (Sanitary Services) Countries in Europe
Value (total revenue = 100)
Rank
Percentile
58.88 54.57 53.85 53.46 33.32 26.87 26.81 25.28 23.67 23.20 22.55 21.75 21.57 17.20 16.05 15.96 15.93 15.34 15.21 14.98 13.00 12.96 11.35 11.32 11.21 10.56 9.54 9.46 9.06 8.98 8.97 8.97 8.75 8.75 8.09 6.52 6.23 5.42 5.17 4.65 4.49 4.42 4.35 4.30 2.96 2.60 1.65 -2.04 -2.04 -2.12 -2.36
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 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 Andorra Faroe Islands Belarus Slovakia Romania Luxembourg Bosnia & Herzegovina Macedonia Serbia & Montenegro Albania Switzerland Liechtenstein Spain the United Kingdom Vatican City Italy Slovenia Monaco Sweden Russian Federation Lithuania Iceland Germany Finland Czech Republic Austria Latvia Croatia San Marino Jersey Guernsey Belgium France Estonia Denmark Hungary Ukraine Portugal Gibraltar Georgia Cyprus Netherlands Norway Ireland Bulgaria Kazakhstan Moldova Poland
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
76
Income Taxes Countries
Value (total revenue = 100)
Rank
Percentile
13.57 9.88 8.63 7.84 7.09 7.07 6.96 5.81 5.50 5.19 4.82 4.52 4.31 4.14 4.05 4.02 3.87 3.63 3.45 3.27 3.14 2.75 2.69 2.67 2.57 2.39 2.31 2.26 2.21 2.19 2.19 1.99 1.95 1.87 1.73 1.40 1.24 0.97 0.91 0.72 0.40 0.40 0.29 0.04 -0.32
1 2 3 4 6 7 8 11 12 13 14 15 16 17 18 19 20 21 22 23 25 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 46 49 50 51 52 53
98.11 96.23 94.34 92.45 88.68 86.79 84.91 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 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 13.21 7.55 5.66 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Greece Peru Argentina Malaysia Turkey Mexico India Italy China Russian Federation Hong Kong Spain Australia Switzerland Brazil USA Thailand Luxembourg Sweden the United Kingdom Germany New Zealand Portugal Singapore Finland Czech Republic Japan Chile Denmark Canada South Korea Austria Belgium France Taiwan Pakistan South Africa Hungary Philippines Indonesia Israel Ireland Norway Netherlands Poland
Europe Latin America Latin America Asia the Middle East Latin America Asia Europe Asia Europe Asia Europe Oceana Europe Latin America North America Asia Europe Europe Europe Europe Oceana Europe Asia Europe Europe Asia Latin America Europe North America Asia Europe Europe Europe Asia the Middle East Africa Europe Asia Asia the Middle East Europe Europe Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
77
Income Taxes (Sanitary Services) Countries in Europe
Value (total revenue = 100)
Rank
Percentile
13.57 12.58 12.41 8.62 6.89 6.87 6.74 6.19 6.01 5.85 5.81 5.80 5.19 5.17 4.62 4.52 4.24 4.14 4.06 3.86 3.63 3.45 3.27 3.14 2.85 2.69 2.59 2.57 2.57 2.39 2.26 2.26 2.21 2.11 1.99 1.97 1.95 1.92 1.92 1.87 0.97 0.87 0.83 0.82 0.40 0.29 0.04 -0.28 -0.28 -0.29 -0.32
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 Albania Belarus Slovakia Romania Bosnia & Herzegovina Macedonia Vatican City Italy Serbia & Montenegro Russian Federation Lithuania Faroe Islands Spain Slovenia Switzerland Iceland Liechtenstein Luxembourg Sweden the United Kingdom Germany Andorra Portugal Monaco Cyprus Finland Czech Republic Latvia Croatia Denmark Estonia Austria San Marino Belgium Jersey Guernsey France Hungary Ukraine Gibraltar Georgia Ireland Norway Netherlands Bulgaria Kazakhstan Moldova Poland
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.5 3.5.1
78
FINANCIAL RETURNS IN BULGARIA: PROFITABILITY RATIOS Overview
In this chapter we consider additional financial ratios estimated for firms involved in sanitary services operating in Bulgaria benchmarked against global averages. The chapter begins by defining relevant terms. Estimates are then presented for the proto-typical firm operating in Bulgaria compared to average global benchmarks. For ratios where there are large deviations between the average firm in Bulgaria 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.
•
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.
•
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.
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Financial Indicators
79
•
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.
•
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 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
80
Ratio Structure: Outlook
Using the methodology described in the introduction, the following table summarizes ratio structure benchmarks for firms involved in sanitary services in Bulgaria. All figures are current-year projections for companies operating in Bulgaria based on latest financial results available. Ratios Bulgaria 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 (%) Selling, General & Administrative Expense/Net Sales (%) Operating Profit Margin (%) Operating Inc / Total Capital (%) Pretax Margin (%) 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 Long Term Debt % Total Capital Equity % Total Capital Total Capital % Assets Fixed Charge Coverage Ratio 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
-1.16 -1.67 0.04 0.07 7.74 11.03 69.44 6.58 7.26 -2.24 -1.60 -2.04 -1.59 0.41
15.62 9.27 6.99 11.24 35.32 19.58 64.69 21.70 9.67 11.40 10.31 14.74 11.10 0.62
14.68 9.23 13.41 11.19 -3271.90 25.99 55.52 26.33 5.23 20.28 -2656.26 19.38 13.55 0.60
83.95 7.57 4.92 7.48 16.18 42.33
60.43 6.11 7.07 7.01 14.26 39.47
66.26 13.53 7.32 7.27 17.64 31.85
10.23 6.50 75.07 66.23 0.74 93.33 8.07
27.38 22.48 67.13 63.68 62.34 154.00 5.36
25.61 21.69 66.62 65.38 298.47 135.22 10.91
1.15 1.33 25.75 45.33 13.35 72.81 30.75
0.99 1.23 25.96 50.68 12.21 77.11 49.56
1.31 1.58 30.05 46.05 8.82 99.26 43.64
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.5.4
81
Large Variances: Ratios
The following graphics summarize for sanitary services the large ratio structure gaps between firms operating in Bulgaria 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: Return on Equity - Total (%) 20 15 10 5 0 -5 -10 -15
15.62
14.68
1.16
Bulgaria
Europe
World Average
-13.52 Gap
Gap: Cash Earnings Return On Equity (%) 3271.9
4000 2000 7.74
0
35.32
-2000 -4000
-3264.16 Bulgaria
Europe
World Average
Gap
Gap: Gross Profit Margin (%) 30
21.7
26.33
20 10
6.58
0 -10 -20
Bulgaria
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Europe
World Average
-19.75 Gap
©2007 Icon Group International, Inc.
Financial Indicators
82
Gap: Operating Profit Margin (%) 30
20.28
20 10
11.4 2.24
0 -10 -20
Bulgaria
Europe
-18.04 Gap
World Average
Gap: Operating Inc / Total Capital (%) 2656.26
3000 2000 1000
1.6
0
10.31
-1000 -2000 -3000
-2654.66 Bulgaria
Europe
World Average
Gap
Gap: Pretax Margin (%) 19.38
20 10
14.74 2.04
0 -10 -20
-17.34 Bulgaria
Europe
World Average
Gap
Gap: Inventory Turnover (%) 100
83.95
80
60.43
66.26
60 40 17.69
20 0
Bulgaria
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Europe
World Average
Gap
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Financial Indicators
83
Gap: Total Debt % Total Capital 27.38
30 20
25.61
10.23
10 0 -10 -20
-15.38 Bulgaria
Europe
World Average
Gap
Gap: Fixed Charge Coverage Ratio 298.47
300 200 100 0
62.34
0.74
-100 -200 -300
Bulgaria
Europe
-297.73 Gap
World Average
Gap: Fixed Assets % Common Equity 200
154
150 100
135.22
93.33
50 0 -50
Bulgaria
Europe
-41.89 Gap
World Average
Gap: Accounts Receivables Days 100
99.26 72.81
77.11
50 0 -26.45 -50
Bulgaria
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Europe
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
3.5.5
84
Key Percentiles and Rankings
We now consider the distribution of financial ratios for sanitary services using ranks and percentiles. What percent of countries have a value lower or higher than Bulgaria (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
Bulgaria
Rank of Total
Percentile
-1.16 -1.67 0.04 0.07 7.74 11.03 69.44 6.58 7.26 -2.24 -1.60 -2.04 -1.59 0.41
52 of 53 50 of 53 53 of 53 53 of 53 51 of 53 47 of 54 16 of 53 51 of 53 22 of 37 53 of 54 50 of 53 53 of 54 53 of 54 36 of 54
1.89 5.66 0.00 0.00 3.77 12.96 69.81 3.77 40.54 1.85 5.66 1.85 1.85 33.33
83.95 7.57 4.92 7.48 16.18 42.33
11 of 53 14 of 54 30 of 52 19 of 54 21 of 54 18 of 52
79.25 74.07 42.31 64.81 61.11 65.38
10.23 6.50 75.07 66.23 0.74 93.33 8.07
49 of 54 48 of 53 12 of 54 28 of 54 54 of 54 48 of 54 28 of 54
9.26 9.43 77.78 48.15 0.00 11.11 48.15
1.15 1.33 25.75 45.33 13.35 72.81 30.75
25 of 54 31 of 54 26 of 54 31 of 54 18 of 54 29 of 53 31 of 53
53.70 42.59 51.85 42.59 66.67 45.28 41.51
_________________________________________________________________________________________________________
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 (%) Selling, General & Administrative Expense/Net Sales (%) Operating Profit Margin (%) Operating Inc / Total Capital (%) Pretax Margin (%) 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 Long Term Debt % Total Capital Equity % Total Capital Total Capital % Assets Fixed Charge Coverage Ratio 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
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©2007 Icon Group International, Inc.
Financial Indicators
85
Gross Profit Margin (%) Countries
Value
Rank
Percentile
Greece Australia Thailand Philippines Malaysia Hong Kong Norway Peru Argentina USA Italy Chile the United Kingdom Indonesia China Brazil Turkey Singapore Mexico Canada Pakistan Switzerland Japan New Zealand Sweden Finland Spain Luxembourg France India Russian Federation Austria Israel Ireland Germany Czech Republic Taiwan South Korea Portugal Denmark Belgium Poland Hungary Netherlands
47.10 45.91 45.74 44.07 41.23 39.98 38.52 37.41 37.34 36.00 35.49 35.41 35.02 34.84 34.01 33.79 32.63 32.60 32.54 31.97 31.51 27.98 26.20 24.96 24.22 22.80 22.80 21.70 20.75 20.03 17.92 17.30 16.34 16.20 13.83 12.78 12.75 12.42 11.64 11.08 7.84 7.62 6.30 1.32
1 2 3 4 6 7 8 10 12 13 14 15 17 18 19 20 22 23 24 25 26 28 30 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52
98.08 96.15 94.23 92.31 88.46 86.54 84.62 80.77 76.92 75.00 73.08 71.15 67.31 65.38 63.46 61.54 57.69 55.77 53.85 51.92 50.00 46.15 42.31 38.46 36.54 34.62 32.69 30.77 28.85 26.92 25.00 23.08 21.15 19.23 17.31 15.38 13.46 11.54 9.62 7.69 5.77 3.85 1.92 0.00
Region
_________________________________________________________________________________________________________
Europe Oceana Asia Asia Asia Asia Europe Latin America Latin America North America Europe Latin America Europe Asia Asia Latin America the Middle East Asia Latin America North America the Middle East Europe Asia Oceana Europe Europe Europe Europe Europe Asia Europe Europe the Middle East Europe Europe Europe Asia Asia Europe Europe Europe Europe Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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©2007 Icon Group International, Inc.
Financial Indicators
86
Gross Profit Margin (%) (Sanitary Services) Countries in Europe
Value
Rank
Percentile
Greece Malta Isle of Man Belarus Slovakia Norway Faroe Islands Iceland Vatican City Italy the United Kingdom Albania Monaco Romania Bosnia & Herzegovina Switzerland Macedonia Serbia & Montenegro Liechtenstein Andorra Sweden Finland Spain Luxembourg Slovenia France Russian Federation Lithuania Austria San Marino Guernsey Jersey Ireland Germany Czech Republic Latvia Croatia Estonia Portugal Cyprus Denmark Belgium Poland Moldova Kazakhstan Bulgaria Hungary Ukraine Gibraltar Georgia Netherlands
47.10 43.65 43.08 42.95 42.85 38.52 38.34 36.37 35.78 35.49 35.02 32.66 31.61 31.00 28.45 27.98 27.65 26.67 26.11 25.85 24.22 22.80 22.80 21.70 21.40 20.75 17.92 17.88 17.30 17.14 16.71 16.71 16.20 13.83 12.78 12.13 12.12 11.98 11.64 11.15 11.08 7.84 7.62 6.85 6.59 6.58 6.30 5.66 5.39 5.30 1.32
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
87
Pretax Margin (%) Countries
Value
Rank
Percentile
Greece New Zealand Philippines Hong Kong Malaysia Indonesia Turkey Mexico China Thailand Peru Luxembourg Pakistan Argentina India Chile Switzerland Australia Spain the United Kingdom Italy South Africa Singapore Canada Sweden Russian Federation Taiwan USA Germany Brazil Finland Czech Republic Austria Belgium France South Korea Japan Denmark Hungary Portugal Netherlands Norway Israel Ireland Poland
58.88 51.62 35.41 34.75 32.00 28.00 26.61 26.54 25.58 25.12 24.71 23.67 23.12 22.61 21.79 19.77 17.20 17.02 15.96 15.93 15.21 14.04 13.40 13.30 12.96 11.35 11.20 11.09 10.56 10.31 9.54 9.46 9.06 8.09 6.52 6.47 5.43 5.42 5.17 4.49 2.96 2.60 1.66 1.65 -2.36
1 2 3 4 5 7 9 10 12 13 14 16 17 18 19 22 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 52 53
98.11 96.23 94.34 92.45 90.57 86.79 83.02 81.13 77.36 75.47 73.58 69.81 67.92 66.04 64.15 58.49 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 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Europe Oceana Asia Asia Asia Asia the Middle East Latin America Asia Asia Latin America Europe the Middle East Latin America Asia Latin America Europe Oceana Europe Europe Europe Africa Asia North America Europe Europe Asia North America Europe Latin America Europe Europe Europe Europe Europe Asia Asia Europe Europe Europe 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
88
Pretax Margin (%) (Sanitary Services) Countries in Europe
Value
Rank
Percentile
Greece Malta Isle of Man Andorra Faroe Islands Belarus Slovakia Romania Luxembourg Bosnia & Herzegovina Macedonia Serbia & Montenegro Albania Switzerland Liechtenstein Spain the United Kingdom Vatican City Italy Slovenia Monaco Sweden Russian Federation Lithuania Iceland Germany Finland Czech Republic Austria Latvia Croatia San Marino Jersey Guernsey Belgium France Estonia Denmark Hungary Ukraine Portugal Gibraltar Georgia Cyprus Netherlands Norway Ireland Bulgaria Kazakhstan Moldova Poland
58.88 54.57 53.85 53.46 33.32 26.87 26.81 25.28 23.67 23.20 22.55 21.75 21.57 17.20 16.05 15.96 15.93 15.34 15.21 14.98 13.00 12.96 11.35 11.32 11.21 10.56 9.54 9.46 9.06 8.98 8.97 8.97 8.75 8.75 8.09 6.52 6.23 5.42 5.17 4.65 4.49 4.42 4.35 4.30 2.96 2.60 1.65 -2.04 -2.04 -2.12 -2.36
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 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
89
Quick Ratio Countries
Value
Rank
Percentile
3.30 2.49 2.31 2.22 1.98 1.93 1.90 1.89 1.83 1.61 1.47 1.44 1.44 1.33 1.23 1.23 1.17 1.16 1.11 1.09 1.07 1.00 0.99 0.99 0.98 0.98 0.97 0.96 0.94 0.92 0.90 0.87 0.82 0.78 0.71 0.71 0.70 0.69 0.66 0.64 0.64 0.50 0.49 0.48 0.36
1 4 5 6 7 9 10 11 12 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 42 43 44 45 46 47 48 50 51 52 53
98.11 92.45 90.57 88.68 86.79 83.02 81.13 79.25 77.36 71.70 69.81 67.92 66.04 64.15 60.38 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 20.75 18.87 16.98 15.09 13.21 11.32 9.43 5.66 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Thailand Germany Philippines Malaysia Switzerland Singapore Turkey Mexico Indonesia Brazil Canada India China Poland Belgium Russian Federation Pakistan France Norway New Zealand South Africa Greece Denmark Israel Hong Kong Ireland Finland Italy Spain Chile Luxembourg the United Kingdom Sweden Argentina South Korea Australia Taiwan Peru USA Netherlands Czech Republic Austria Hungary Portugal Japan
Asia Europe Asia Asia Europe Asia the Middle East Latin America Asia Latin America North America Asia Asia Europe Europe Europe the Middle East Europe Europe Oceana Africa Europe Europe the Middle East Asia Europe Europe Europe Europe Latin America Europe Europe Europe Latin America Asia Oceana Asia Latin America North America Europe Europe Europe Europe Europe Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
90
Quick Ratio (Sanitary Services) Countries in Europe
Value
Rank
Percentile
2.49 1.98 1.87 1.85 1.80 1.66 1.61 1.55 1.33 1.23 1.23 1.22 1.20 1.16 1.15 1.15 1.13 1.11 1.00 0.99 0.98 0.97 0.97 0.96 0.94 0.94 0.93 0.92 0.90 0.88 0.87 0.82 0.72 0.72 0.68 0.67 0.64 0.64 0.61 0.60 0.60 0.50 0.49 0.49 0.48 0.48 0.48 0.46 0.44 0.42 0.41
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
_________________________________________________________________________________________________________
Germany Switzerland Monaco Liechtenstein Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Poland Belgium Russian Federation Lithuania Moldova France Kazakhstan Bulgaria Andorra Norway Greece Denmark Ireland Finland Vatican City Italy Faroe Islands Spain Malta Isle of Man Luxembourg Slovenia the United Kingdom Sweden Belarus Slovakia Estonia Iceland Netherlands Czech Republic Albania Latvia Croatia Austria San Marino Hungary Guernsey Jersey Portugal Cyprus Ukraine Gibraltar Georgia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
91
Current Ratio Countries
Value
Rank
Percentile
3.65 3.13 3.05 2.48 2.47 2.37 2.23 2.10 2.09 1.85 1.84 1.83 1.77 1.69 1.56 1.55 1.54 1.53 1.49 1.42 1.38 1.36 1.36 1.33 1.27 1.20 1.16 1.11 1.10 1.06 1.05 1.04 1.02 0.98 0.98 0.96 0.96 0.91 0.81 0.80 0.69 0.64 0.63 0.59 0.52
1 2 3 7 8 9 11 12 13 15 16 17 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 45 46 47 48 49 50 52 53
98.11 96.23 94.34 86.79 84.91 83.02 79.25 77.36 75.47 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 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 15.09 13.21 11.32 9.43 7.55 5.66 1.89 0.00
Region
_________________________________________________________________________________________________________
Thailand Philippines Germany Switzerland Indonesia Malaysia Singapore Turkey Mexico Israel India Ireland Canada Brazil Greece China Poland Belgium Russian Federation Finland Pakistan Norway France Hong Kong Sweden South Africa New Zealand Denmark Italy the United Kingdom Chile Taiwan Spain Czech Republic Luxembourg USA Australia South Korea Argentina Peru Netherlands Hungary Portugal Austria Japan
Asia Asia Europe Europe Asia Asia Asia the Middle East Latin America the Middle East Asia Europe North America Latin America Europe Asia Europe Europe Europe Europe the Middle East Europe Europe Asia Europe Africa Oceana Europe Europe Europe Latin America Asia Europe Europe Europe North America Oceana Asia Latin America Latin America Europe Europe Europe Europe Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
92
Current Ratio (Sanitary Services) Countries in Europe
Value
Rank
Percentile
3.05 2.48 2.32 2.16 1.99 1.83 1.83 1.78 1.71 1.56 1.54 1.53 1.49 1.49 1.44 1.42 1.42 1.38 1.36 1.36 1.33 1.33 1.28 1.27 1.20 1.11 1.11 1.10 1.06 1.02 0.98 0.98 0.97 0.96 0.93 0.93 0.92 0.92 0.88 0.69 0.69 0.64 0.63 0.60 0.59 0.58 0.58 0.57 0.57 0.55 0.54
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
_________________________________________________________________________________________________________
Germany Switzerland Liechtenstein Monaco Romania Ireland Bosnia & Herzegovina Macedonia Serbia & Montenegro Greece Poland Belgium Russian Federation Lithuania Malta Isle of Man Finland Moldova Norway France Kazakhstan Bulgaria Faroe Islands Sweden Andorra Vatican City Denmark Italy the United Kingdom Spain Czech Republic Luxembourg Iceland Slovenia Latvia Croatia Belarus Slovakia Estonia Albania Netherlands Hungary Portugal Cyprus Austria San Marino Ukraine Guernsey Jersey Gibraltar Georgia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
93
Inventories % Total Current Assets Countries
Value
Rank
Percentile
Israel Ireland Greece Canada Sweden Taiwan Denmark South Korea Japan Finland USA Belgium Russian Federation Poland Singapore Norway Italy Thailand Pakistan Peru Spain France Austria Germany South Africa Philippines India Switzerland Malaysia Hungary Australia Czech Republic China Luxembourg the United Kingdom Hong Kong Portugal Indonesia Netherlands Chile Brazil Turkey Mexico Argentina New Zealand
44.64 44.27 27.85 25.17 23.85 23.76 22.74 20.29 18.29 17.40 17.06 16.65 16.27 15.45 14.61 14.42 12.49 11.21 11.17 11.05 10.69 10.64 9.21 9.15 9.07 9.04 8.24 8.18 8.03 7.78 7.74 7.64 7.63 7.60 7.47 7.38 7.16 7.15 6.84 4.67 2.81 1.60 1.59 0.88 0.35
1 2 3 4 5 6 7 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 25 26 27 28 30 31 33 34 35 37 38 39 40 41 42 43 44 47 48 49 50 52 53
98.11 96.23 94.34 92.45 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 64.15 62.26 60.38 58.49 56.60 52.83 50.94 49.06 47.17 43.40 41.51 37.74 35.85 33.96 30.19 28.30 26.42 24.53 22.64 20.75 18.87 16.98 11.32 9.43 7.55 5.66 1.89 0.00
Region
_________________________________________________________________________________________________________
the Middle East Europe Europe North America Europe Asia Europe Asia Asia Europe North America Europe Europe Europe Asia Europe Europe Asia the Middle East Latin America Europe Europe Europe Europe Africa Asia Asia Europe Asia Europe Oceana Europe Asia Europe Europe Asia Europe Asia Europe Latin America Latin America the Middle East Latin America Latin America Oceana
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
94
Inventories % Total Current Assets (Sanitary Services) Countries in Europe
Value
Rank
Percentile
Ireland Greece Malta Isle of Man Sweden Denmark Estonia Belarus Slovakia Finland Iceland Belgium Russian Federation Lithuania Poland Norway Monaco Moldova Kazakhstan Bulgaria Vatican City Italy Spain France Slovenia Albania Austria Germany San Marino Guernsey Jersey Switzerland Hungary Czech Republic Liechtenstein Luxembourg the United Kingdom Latvia Croatia Portugal Faroe Islands Ukraine Cyprus Netherlands Gibraltar Georgia Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Andorra
44.27 27.85 25.81 25.47 23.85 22.74 19.56 19.27 19.23 17.40 17.23 16.65 16.27 16.23 15.45 14.42 14.16 13.89 13.37 13.35 12.59 12.49 10.69 10.64 10.04 9.65 9.21 9.15 9.12 8.90 8.90 8.18 7.78 7.64 7.64 7.60 7.47 7.26 7.25 7.16 7.08 7.00 6.85 6.84 6.65 6.55 1.52 1.39 1.35 1.31 0.37
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
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
95
Accounts Receivables Days Countries
Value
Rank
Percentile
Philippines Indonesia Italy Greece Russian Federation India Malaysia Brazil France Switzerland Singapore Spain Pakistan Luxembourg Canada Germany Chile Israel Poland Ireland Norway Finland Denmark Portugal Australia Sweden Argentina South Africa Turkey Mexico Belgium Netherlands Thailand China Peru the United Kingdom South Korea USA Taiwan Hong Kong Austria Japan Hungary Czech Republic
256.48 202.80 165.75 158.84 147.40 144.73 134.24 132.36 130.07 105.13 101.38 96.72 91.38 90.26 88.42 87.61 85.56 84.36 84.30 83.66 82.49 79.28 76.21 75.41 73.87 72.08 66.96 66.73 65.39 65.21 64.81 60.11 59.68 59.25 58.03 56.93 56.86 53.19 50.84 49.71 44.25 42.04 41.00 33.43
1 3 5 6 7 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 36 37 38 39 40 41 42 43 45 48 50 51 52
98.08 94.23 90.38 88.46 86.54 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 34.62 30.77 28.85 26.92 25.00 23.08 21.15 19.23 17.31 13.46 7.69 3.85 1.92 0.00
Region
_________________________________________________________________________________________________________
Asia Asia Europe Europe Europe Asia Asia Latin America Europe Europe Asia Europe the Middle East Europe North America Europe Latin America the Middle East Europe Europe Europe Europe Europe Europe Oceana Europe Latin America Africa the Middle East Latin America Europe Europe Asia Asia Latin America Europe Asia North America Asia Asia Europe Asia Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
96
Accounts Receivables Days (Sanitary Services) Countries in Europe
Value
Rank
Percentile
Vatican City Italy Greece Russian Federation Malta Lithuania Isle of Man France Switzerland Monaco Liechtenstein Spain Slovenia Luxembourg Germany Poland Ireland Norway Finland Denmark Moldova Portugal Kazakhstan Bulgaria Cyprus Sweden Belgium Romania Netherlands Bosnia & Herzegovina the United Kingdom Macedonia Estonia Iceland Serbia & Montenegro Albania Belarus Slovakia Faroe Islands Austria San Marino Guernsey Jersey Hungary Ukraine Gibraltar Georgia Czech Republic Latvia Croatia
167.09 165.75 158.84 147.40 147.21 147.05 145.28 130.07 105.13 98.31 98.10 96.72 90.80 90.26 87.61 84.30 83.66 82.49 79.28 76.21 75.80 75.41 72.94 72.81 72.19 72.08 64.81 62.13 60.11 57.01 56.93 55.41 54.82 53.74 53.45 50.65 49.16 49.05 47.67 44.25 43.83 42.73 42.73 41.00 36.87 35.06 34.52 33.43 31.73 31.71
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
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
97
Inventories (# of Days) Held Countries
Value
Rank
Percentile
Greece Thailand Finland Switzerland Israel Ireland Philippines Sweden Indonesia Norway India Pakistan Singapore Malaysia Italy Canada USA Taiwan Hong Kong Poland Belgium France Peru Australia Russian Federation Japan China Denmark Spain South Korea Germany the United Kingdom Luxembourg South Africa Czech Republic Austria Brazil Portugal Chile Netherlands Hungary Turkey Mexico Argentina
317.16 194.42 142.15 106.57 101.78 100.94 96.07 77.54 75.96 67.56 65.06 60.63 57.86 54.42 49.88 48.92 39.01 38.89 37.99 35.61 33.06 32.44 31.53 31.33 29.54 28.75 26.48 25.40 23.28 22.99 22.28 18.70 17.24 16.53 15.17 13.62 12.98 9.68 8.46 6.97 5.40 4.62 4.61 1.15
1 2 5 6 7 8 9 12 13 15 16 17 18 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 52
98.08 96.15 90.38 88.46 86.54 84.62 82.69 76.92 75.00 71.15 69.23 67.31 65.38 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 34.62 30.77 28.85 26.92 25.00 23.08 21.15 19.23 17.31 15.38 13.46 11.54 9.62 7.69 5.77 3.85 0.00
Region
_________________________________________________________________________________________________________
Europe Asia Europe Europe the Middle East Europe Asia Europe Asia Europe Asia the Middle East Asia Asia Europe North America North America Asia Asia Europe Europe Europe Latin America Oceana Europe Asia Asia Europe Europe Asia Europe Europe Europe Africa Europe Europe Latin America Europe Latin America Europe Europe the Middle East Latin America Latin America
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
98
Inventories (# of Days) Held (Sanitary Services) Countries in Europe
Value
Rank
Percentile
Greece Malta Isle of Man Finland Switzerland Ireland Liechtenstein Belarus Slovakia Sweden Norway Monaco Vatican City Italy Iceland Faroe Islands Poland Belgium France Moldova Kazakhstan Bulgaria Russian Federation Lithuania Albania Denmark Spain Germany Estonia Slovenia the United Kingdom Luxembourg Czech Republic Latvia Croatia Austria San Marino Jersey Guernsey Portugal Cyprus Netherlands Hungary Ukraine Gibraltar Georgia Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro
317.16 293.95 290.08 142.15 106.57 100.94 99.44 79.74 79.56 77.54 67.56 56.11 50.28 49.88 39.41 36.42 35.61 33.06 32.44 32.01 30.81 30.75 29.54 29.47 27.52 25.40 23.28 22.28 22.17 21.85 18.70 17.24 15.17 14.40 14.39 13.62 13.49 13.15 13.15 9.68 9.27 6.97 5.40 4.86 4.62 4.55 4.39 4.03 3.91 3.78
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
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.6 3.6.1
99
PRODUCTIVITY IN BULGARIA: ASSET-LABOR RATIOS Overview
In this chapter, we consider numerous asset-labor ratios for sanitary services in Bulgaria benchmarked against global averages. Productivity and utilization ratios are presented for companies oprating in Bulgaria and the average global benchmarks for sanitary services. For ratios where there are large deviations between Bulgaria 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 sanitary services that Bulgaria 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.
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©2007 Icon Group International, Inc.
Financial Indicators
3.6.2
100
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 sanitary services in Bulgaria based on latest financial results available. Labor-asset Ratios ($k/employee) Bulgaria Europe World Avg. _________________________________________________________________________________________________________
Cash & Short Term Investments Cash Short Term Investments Receivables (Net) Total Inventories Raw Materials Finished Goods Progress Payments & Other 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 Deferred Charges Intangible Other Assets Total Assets
20.59 15.96 4.63 43.09 5.34 5.03 0.03 0.29 1.18 70.20 0.04 2.64 213.92 376.75 6.98 217.30 132.84 1.93 17.70 162.84 0.25 75.77 83.77 1.68 1.37 2.95 0.63 2.32 289.74
71.44 40.09 20.74 110.78 24.22 6.80 3.42 4.24 10.98 219.14 26.42 67.58 478.62 914.78 24.26 209.63 544.04 48.51 215.76 418.92 2.91 83.92 306.65 31.54 97.23 90.51 4.94 42.33 875.73
95.27 33.68 45.45 118.83 18.31 4.40 3.48 10.36 19.77 253.88 4.31 39.05 776.49 1221.51 24.35 120.53 421.47 5.40 160.36 375.31 2.12 20.18 131.11 3.62 34.41 127.96 8.38 30.38 1204.34
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.6.3
101
Asset to Labor: International Gaps
The following graphics summarize for sanitary services the large labor-asset gaps between firms operating in Bulgaria 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 ($k/employee) 95.27
100 50
71.44 20.59
0 -50 -74.68 -100
Bulgaria
Europe
World Average
Gap
Gap: Receivables (Net) ($k/employee) 150
110.78
118.83
100 50
43.09
0 -50 -100
-75.74 Bulgaria
Europe
World Average
Gap
Gap: Current Assets - Total ($k/employee) 300
219.14
253.88
200 100
70.2
0 -100 -200
Bulgaria
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Europe
World Average
-183.68 Gap
©2007 Icon Group International, Inc.
Financial Indicators
102
Gap: Property Plant and Equipment - Net ($k/employee) 1000 500
776.49 478.62 213.92
0 -500 -1000
-562.57 Bulgaria
Europe
World Average
Gap
Gap: Property Plant and Equipment - Gross ($k/employee) 1500
1221.51 914.78
1000 500
376.75
0 -500 -1000
-844.76 Bulgaria
Europe
World Average
Gap
Gap: Buildings ($k/employee) 250
217.3
209.63
200 150
120.53
100
96.77
50 0
Bulgaria
Europe
World Average
Gap
Gap: Machinery & Equipment ($k/employee) 544.04
600
421.47
400 200
132.84
0 -200 -400
-288.63 Bulgaria
www.icongrouponline.com
Europe
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
103
Gap: Other Property Plant & Equipment ($k/employee) 300
215.76 160.36
200 100
17.7
0 -100 -200
-142.66 Bulgaria
Europe
World Average
Gap
Gap: Accumulated Depreciation - Total ($k/employee) 600
418.92
400 200
375.31
162.84
0 -200 -400
-212.47 Bulgaria
Europe
World Average
Gap
Gap: Other Assets ($k/employee) 127.96
150
90.51
100 50
2.95
0 -50 -100 -150
-125.01 Bulgaria
Europe
World Average
Gap
Gap: Total Assets ($k/employee) 1500
1204.34 875.73
1000 500
289.74
0 -500 -1000
Bulgaria
www.icongrouponline.com
Europe
World Average
-914.6 Gap
©2007 Icon Group International, Inc.
Financial Indicators
3.6.4
104
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 Bulgaria (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 ($k/employee)
Bulgaria
Rank of Total
Percentile
20.59 15.96 4.63 43.09 5.34 5.03 0.03 0.29 1.18 70.20 0.04 2.64 213.92 376.75 6.98 217.30 132.84 1.93 17.70 162.84 0.25 75.77 83.77 1.68 1.37 2.95 0.63 2.32 289.74
43 of 54 26 of 51 41 of 49 45 of 54 41 of 54 30 of 47 34 of 35 37 of 44 43 of 53 45 of 54 41 of 43 43 of 47 44 of 54 43 of 52 30 of 40 12 of 49 41 of 51 33 of 36 48 of 52 34 of 52 10 of 14 9 of 46 34 of 47 28 of 33 43 of 49 44 of 54 28 of 34 39 of 52 45 of 54
20.37 49.02 16.33 16.67 24.07 36.17 2.86 15.91 18.87 16.67 4.65 8.51 18.52 17.31 25.00 75.51 19.61 8.33 7.69 34.62 28.57 80.43 27.66 15.15 12.24 18.52 17.65 25.00 16.67
_________________________________________________________________________________________________________
Cash & Short Term Investments Cash Short Term Investments Receivables (Net) Total Inventories Raw Materials Finished Goods Progress Payments & Other Other Current Assets Current Assets - Total Long Term Receivables Investments in Unconsolidated Subsidiaries Property Plant and Equipment - Net Property Plant and Equipment - Gross Land Buildings Machinery & Equipment Transportation Equipment Other Property Plant & Equipment Accumulated Depreciation - Total Accumulated Depreciation - Land Accumulated Depreciation - Buildings Accumulated Depreciation -Machinery & Equipment Accumulated Depreciation - Transportation Equipment Accumulated Depreciation - Other Prop & Equip Other Assets Deferred Charges Intangible Other Assets Total Assets
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
105
Cash & Short Term Investments Countries
Value ($K/employee)
Rank
Percentile
777.76 663.64 344.99 281.92 252.20 183.95 183.45 179.21 162.64 135.94 134.14 123.93 94.29 94.29 93.70 83.07 74.09 71.71 67.95 65.67 61.86 60.69 56.30 56.01 45.36 44.52 41.11 38.61 35.72 33.58 24.05 23.84 22.84 22.33 21.80 18.19 14.12 12.87 12.05 11.91 8.95 8.87 4.07 3.49 0.74
1 2 3 5 7 8 9 10 12 13 14 15 16 17 18 19 21 22 24 25 26 27 28 29 31 32 33 34 35 36 38 39 40 41 42 43 44 45 46 47 48 49 51 52 53
98.11 96.23 94.34 90.57 86.79 84.91 83.02 81.13 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 60.38 58.49 54.72 52.83 50.94 49.06 47.17 45.28 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 15.09 13.21 11.32 9.43 7.55 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Belgium Pakistan Thailand Malaysia Switzerland Turkey Mexico USA China Canada Germany Australia South Korea New Zealand Philippines Netherlands Indonesia Hong Kong Denmark Luxembourg the United Kingdom Austria Argentina Spain Peru Norway Italy Sweden France Finland Japan Poland Czech Republic Brazil South Africa Chile Greece Taiwan Portugal Singapore Israel Ireland India Hungary Russian Federation
Europe the Middle East Asia Asia Europe the Middle East Latin America North America Asia North America Europe Oceana Asia Oceana Asia Europe Asia Asia Europe Europe Europe Europe Latin America Europe Latin America Europe Europe Europe Europe Europe Asia Europe Europe Latin America Africa Latin America Europe Asia Europe Asia the Middle East Europe Asia Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
106
Cash & Short Term Investments (Sanitary Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
777.76 252.20 235.34 181.05 174.78 160.39 155.88 150.37 134.14 97.64 90.90 83.07 68.76 67.95 65.67 61.86 60.69 60.11 58.61 58.61 56.01 52.58 44.52 41.44 41.11 39.59 38.61 35.72 33.58 23.84 22.84 21.68 21.67 21.44 20.63 20.59 14.12 13.08 12.91 12.05 11.55 11.53 8.87 6.89 6.87 3.49 3.14 2.98 2.94 0.74 0.74
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Belgium Switzerland Liechtenstein Iceland Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Germany Andorra Estonia Netherlands Faroe Islands Denmark Luxembourg the United Kingdom Austria San Marino Guernsey Jersey Spain Slovenia Norway Vatican City Italy Albania Sweden France Finland Poland Czech Republic Latvia Croatia Moldova Kazakhstan Bulgaria Greece Malta Isle of Man Portugal Monaco Cyprus Ireland Belarus Slovakia Hungary Ukraine Gibraltar Georgia Russian Federation Lithuania
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
107
Receivables (Net) Countries
Value ($K/employee)
Rank
Percentile
1060.13 557.76 337.58 332.82 292.45 238.84 216.06 199.14 173.10 165.60 144.60 143.94 131.72 116.94 116.62 114.33 113.93 111.28 110.04 109.74 103.66 102.26 96.24 87.59 85.84 80.76 71.33 69.46 64.32 61.88 61.83 57.31 55.59 49.89 46.91 44.71 44.34 27.61 26.82 26.38 23.86 23.84 16.94 10.95 8.03
1 2 3 4 5 6 7 8 9 10 11 12 13 15 16 17 18 19 20 21 23 24 27 29 30 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52
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 71.70 69.81 67.92 66.04 64.15 62.26 60.38 56.60 54.72 49.06 45.28 43.40 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 5.66 3.77 1.89
Region
_________________________________________________________________________________________________________
Belgium Netherlands Pakistan South Korea Switzerland China Australia Italy Germany USA Philippines Spain New Zealand Thailand Malaysia Indonesia Canada Peru Turkey Mexico France Denmark Sweden Argentina the United Kingdom Portugal Norway Chile Luxembourg Hong Kong Finland Brazil Austria Poland Japan Israel Ireland Singapore India Greece Taiwan Hungary Czech Republic South Africa Russian Federation
Europe Europe the Middle East Asia Europe Asia Oceana Europe Europe North America Asia Europe Oceana Asia Asia Asia North America Latin America the Middle East Latin America Europe Europe Europe Latin America Europe Europe Europe Latin America Europe Asia Europe Latin America Europe Europe Asia the Middle East Europe Asia Asia Europe Asia Europe Europe Africa Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
108
Receivables (Net) (Sanitary Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
1060.13 557.76 320.85 292.45 272.89 200.75 199.14 173.10 167.30 143.94 136.41 135.13 104.55 103.66 102.26 97.14 96.24 95.95 93.25 89.95 85.84 80.76 77.30 71.33 64.32 61.83 59.34 55.59 55.06 53.68 53.68 49.89 44.86 44.34 43.17 43.09 26.77 26.38 24.45 24.13 23.84 21.44 20.39 20.07 16.94 16.08 16.07 8.03 8.01 5.02 5.01
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Belgium Netherlands Estonia Switzerland Liechtenstein Vatican City Italy Germany Iceland Spain Andorra Slovenia Romania France Denmark Albania Sweden Bosnia & Herzegovina Macedonia Serbia & Montenegro the United Kingdom Portugal Cyprus Norway Luxembourg Finland Faroe Islands Austria San Marino Guernsey Jersey Poland Moldova Ireland Kazakhstan Bulgaria Monaco Greece Malta Isle of Man Hungary Ukraine Gibraltar Georgia Czech Republic Latvia Croatia Russian Federation Lithuania Belarus Slovakia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
109
Total Inventories Countries
Value ($K/employee)
Rank
Percentile
334.42 137.23 123.90 75.51 68.38 58.96 55.16 44.39 44.02 38.64 35.43 31.81 26.91 24.11 21.21 20.29 19.72 19.06 18.74 17.54 17.49 15.87 14.43 14.24 12.96 12.42 12.35 11.76 11.33 10.69 9.56 8.65 8.02 6.18 4.86 4.65 4.64 3.73 3.03 2.93 2.55 1.81 1.62 1.31 0.85
1 2 3 4 5 6 7 9 10 12 13 14 15 16 17 19 20 21 22 24 25 26 28 29 31 32 33 34 35 36 37 38 39 40 41 42 43 45 46 47 49 50 51 52 53
98.11 96.23 94.34 92.45 90.57 88.68 86.79 83.02 81.13 77.36 75.47 73.58 71.70 69.81 67.92 64.15 62.26 60.38 58.49 54.72 52.83 50.94 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 15.09 13.21 11.32 7.55 5.66 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Belgium South Korea Pakistan Finland Sweden Italy Thailand Israel Ireland Switzerland Malaysia Canada USA Philippines Japan Spain Peru Indonesia Germany Greece France China Hong Kong Netherlands Taiwan Luxembourg Austria Denmark Norway Singapore the United Kingdom Portugal Australia Poland South Africa Turkey Mexico Czech Republic India Chile Hungary Russian Federation Brazil Argentina New Zealand
Europe Asia the Middle East Europe Europe Europe Asia the Middle East Europe Europe Asia North America North America Asia Asia Europe Latin America Asia Europe Europe Europe Asia Asia Europe Asia Europe Europe Europe Europe Asia Europe Europe Oceana Europe Africa the Middle East Latin America Europe Asia Latin America Europe Europe Latin America Latin America Oceana
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
110
Total Inventories (Sanitary Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
334.42 132.30 75.51 68.38 59.44 58.96 44.02 38.64 36.06 27.18 20.29 19.05 18.74 17.54 17.49 17.21 16.26 16.05 14.24 13.84 12.42 12.35 12.24 11.93 11.93 11.76 11.33 10.37 9.56 8.65 8.28 6.18 5.56 5.35 5.34 4.42 4.06 3.94 3.80 3.73 3.54 3.54 2.91 2.91 2.55 2.29 2.18 2.14 1.81 1.80 0.88
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Belgium Estonia Finland Sweden Vatican City Italy Ireland Switzerland Liechtenstein Iceland Spain Slovenia Germany Greece France Albania Malta Isle of Man Netherlands Faroe Islands Luxembourg Austria San Marino Jersey Guernsey Denmark Norway Monaco the United Kingdom Portugal Cyprus Poland Moldova Kazakhstan Bulgaria Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Czech Republic Latvia Croatia Belarus Slovakia Hungary Ukraine Gibraltar Georgia Russian Federation Lithuania Andorra
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
111
Current Assets - Total Countries
Value ($K/employee)
Rank
Percentile
2176.38 1273.34 661.20 601.37 577.55 531.09 489.37 437.73 418.41 376.09 374.93 350.69 318.98 318.11 310.26 301.47 277.29 239.21 230.69 223.12 218.85 183.40 181.89 179.60 168.35 161.30 149.24 144.53 142.44 133.36 120.79 104.63 100.27 99.44 98.89 82.78 81.28 69.00 63.00 54.55 51.86 40.23 37.79 33.71 10.78
1 2 3 4 5 6 7 9 10 12 13 14 15 16 17 18 21 23 24 25 26 28 29 30 31 32 33 34 35 36 38 39 40 41 42 43 44 45 46 47 48 49 50 51 53
98.11 96.23 94.34 92.45 90.57 88.68 86.79 83.02 81.13 77.36 75.47 73.58 71.70 69.81 67.92 66.04 60.38 56.60 54.72 52.83 50.94 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 15.09 13.21 11.32 9.43 7.55 5.66 3.77 0.00
Region
_________________________________________________________________________________________________________
Belgium Pakistan Netherlands Switzerland South Korea Thailand USA Malaysia China Germany Australia Philippines Turkey Mexico Italy Canada Indonesia New Zealand Finland Sweden Spain Denmark the United Kingdom Peru Hong Kong France Argentina Norway Luxembourg Austria Portugal Japan Israel Ireland Chile Brazil Poland Czech Republic Greece Taiwan Singapore India South Africa Hungary Russian Federation
Europe the Middle East Europe Europe Asia Asia North America Asia Asia Europe Oceana Asia the Middle East Latin America Europe North America Asia Oceana Europe Europe Europe Europe Europe Latin America Asia Europe Latin America Europe Europe Europe Europe Asia the Middle East Europe Latin America Latin America Europe Europe Europe Asia Asia Asia Africa Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
112
Current Assets - Total (Sanitary Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
2176.38 661.20 601.37 561.17 556.78 494.38 376.09 312.77 310.26 303.08 278.13 270.31 260.75 247.72 230.69 223.12 218.85 205.46 183.40 181.89 161.43 161.30 156.77 144.53 142.44 133.36 132.09 128.79 128.79 120.79 115.63 99.44 81.28 73.08 70.33 70.20 69.00 65.50 65.47 63.00 58.39 57.62 50.28 33.71 30.31 28.82 28.38 15.14 15.11 10.78 10.76
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Belgium Netherlands Switzerland Liechtenstein Estonia Iceland Germany Vatican City Italy Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Andorra Finland Sweden Spain Slovenia Denmark the United Kingdom Faroe Islands France Albania Norway Luxembourg Austria San Marino Guernsey Jersey Portugal Cyprus Ireland Poland Moldova Kazakhstan Bulgaria Czech Republic Latvia Croatia Greece Malta Isle of Man Monaco Hungary Ukraine Gibraltar Georgia Belarus Slovakia Russian Federation Lithuania
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
113
Property Plant and Equipment - Net Countries
Value ($K/employee)
Rank
Percentile
8402.94 2859.49 2679.52 1670.96 1551.04 1182.19 1159.21 1102.27 1013.54 1007.51 974.90 905.48 899.81 845.51 782.65 706.89 705.75 654.83 640.04 630.75 625.75 591.96 523.82 466.46 463.68 452.34 418.10 393.73 389.94 385.81 384.82 384.76 384.33 368.66 311.32 247.69 211.63 165.74 132.62 111.56 53.84 27.05 16.52 16.39 13.71
1 2 3 5 6 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 40 42 44 45 46 47 49 50 51 52 53
98.11 96.23 94.34 90.57 88.68 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 41.51 39.62 37.74 35.85 33.96 32.08 30.19 24.53 20.75 16.98 15.09 13.21 11.32 7.55 5.66 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Australia Pakistan Peru China Thailand Malaysia USA Sweden South Korea Hong Kong Spain Canada Argentina Japan Austria Italy Netherlands Belgium Chile Portugal New Zealand Switzerland Norway Luxembourg the United Kingdom Finland Brazil Philippines Denmark Turkey Taiwan Mexico France Germany Indonesia Poland Czech Republic Greece Hungary South Africa India Russian Federation Israel Ireland Singapore
Oceana the Middle East Latin America Asia Asia Asia North America Europe Asia Asia Europe North America Latin America Asia Europe Europe Europe Europe Latin America Europe Oceana Europe Europe Europe Europe Europe Latin America Asia Europe the Middle East Asia Latin America Europe Europe Asia Europe Europe Europe Europe Africa Asia Europe the Middle East Europe Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
114
Property Plant and Equipment - Net (Sanitary Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
2338.97 1171.10 1102.27 977.09 974.90 966.11 915.22 782.65 775.21 755.83 755.83 712.60 706.89 705.75 654.83 648.01 630.75 603.77 591.96 552.38 523.82 466.46 463.68 452.34 389.94 384.33 368.66 366.57 336.40 326.94 315.38 247.69 222.70 214.31 213.92 211.63 200.88 200.79 165.74 153.61 151.59 132.62 119.26 113.39 111.64 74.82 74.65 27.05 26.99 16.39 13.29
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Albania Iceland Sweden Estonia Spain Faroe Islands Slovenia Austria San Marino Jersey Guernsey Vatican City Italy Netherlands Belgium Andorra Portugal Cyprus Switzerland Liechtenstein Norway Luxembourg the United Kingdom Finland Denmark France Germany Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Poland Moldova Kazakhstan Bulgaria Czech Republic Latvia Croatia Greece Malta Isle of Man Hungary Ukraine Gibraltar Georgia Belarus Slovakia Russian Federation Lithuania Ireland Monaco
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
115
Accumulated Depreciation - Total Countries
Value ($K/employee)
Rank
Percentile
1479.43 1472.03 1314.95 1265.65 1099.93 907.12 839.57 833.72 742.68 655.57 647.23 626.55 580.71 580.65 481.64 428.26 416.84 366.09 333.37 323.79 315.23 304.64 229.66 214.72 209.83 205.08 203.78 202.53 188.55 166.84 152.87 152.45 135.76 132.58 107.34 97.23 40.99 38.82 28.76 20.57 20.40 13.26 10.06
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 20 21 22 23 26 27 28 29 30 31 32 33 34 35 37 38 40 42 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 60.78 58.82 56.86 54.90 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 27.45 25.49 21.57 17.65 11.76 9.80 7.84 5.88 3.92 1.96 0.00
Region
_________________________________________________________________________________________________________
Netherlands Portugal Austria Japan Germany China Luxembourg Pakistan Spain Belgium Finland Sweden Switzerland USA Peru Australia Hong Kong South Korea Canada Chile Thailand Norway Italy Denmark France Brazil Malaysia the United Kingdom Poland Taiwan Turkey Mexico Philippines Czech Republic Indonesia Hungary India Russian Federation New Zealand Israel Ireland Singapore Greece
Europe Europe Europe Asia Europe Asia Europe the Middle East Europe Europe Europe Europe Europe North America Latin America Oceana Asia Asia North America Latin America Asia Europe Europe Europe Europe Latin America Asia Europe Europe Asia the Middle East Latin America Asia Europe Asia Europe Asia Europe Oceana the Middle East Europe Asia Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
116
Accumulated Depreciation - Total (Sanitary Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
1479.43 1472.03 1409.06 1314.95 1302.45 1269.89 1269.89 1099.93 839.57 742.68 697.22 655.57 647.23 626.55 586.60 580.71 541.88 420.43 399.71 352.92 304.64 231.51 229.66 214.72 209.83 202.53 188.55 169.52 163.14 162.84 145.25 133.29 132.58 129.54 125.85 125.79 124.96 97.23 87.43 83.13 81.85 71.68 71.51 38.82 38.73 29.78 20.40 12.86 10.06 9.32 9.20
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Netherlands Portugal Cyprus Austria San Marino Guernsey Jersey Germany Luxembourg Spain Slovenia Belgium Finland Sweden Iceland Switzerland Liechtenstein Albania Faroe Islands Estonia Norway Vatican City Italy Denmark France the United Kingdom Poland Moldova Kazakhstan Bulgaria Romania Bosnia & Herzegovina Czech Republic Macedonia Latvia Croatia Serbia & Montenegro Hungary Ukraine Gibraltar Georgia Belarus Slovakia Russian Federation Lithuania Andorra Ireland Monaco Greece Malta Isle of Man
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
117
Intangible Other Assets Countries
Value ($K/employee)
Rank
Percentile
380.71 328.77 194.33 124.03 101.36 74.19 72.78 72.58 63.95 61.19 60.84 60.34 59.65 59.25 50.57 40.86 40.64 40.46 38.31 35.82 31.23 23.39 20.35 13.17 11.57 10.75 9.76 7.91 6.29 5.80 2.69 2.58 1.88 1.67 1.24 0.88 0.88 0.75 0.67 0.49 0.13 0.02 0.02
1 2 3 4 5 6 7 8 9 10 11 12 13 14 16 18 19 20 21 23 24 27 28 29 30 31 32 33 34 35 37 38 39 40 41 42 43 45 46 47 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 68.63 64.71 62.75 60.78 58.82 54.90 52.94 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 27.45 25.49 23.53 21.57 19.61 17.65 15.69 11.76 9.80 7.84 3.92 1.96 0.00
Region
_________________________________________________________________________________________________________
USA New Zealand Australia Italy Portugal Hong Kong Norway Austria Philippines Switzerland Israel Ireland Belgium the United Kingdom Indonesia Chile Finland France Malaysia Spain Thailand Germany Netherlands South Korea Canada Sweden Luxembourg China Japan Peru Poland Czech Republic Brazil Denmark South Africa Turkey Mexico Greece Hungary Singapore Argentina Russian Federation Pakistan
North America Oceana Oceana Europe Europe Asia Europe Europe Asia Europe the Middle East Europe Europe Europe Asia Latin America Europe Europe Asia Europe Asia Europe Europe Asia North America Europe Europe Asia Asia Latin America Europe Europe Latin America Europe Africa the Middle East Latin America Europe Europe Asia Latin America Europe the Middle East
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
118
Intangible Other Assets (Sanitary Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
384.61 340.47 125.03 124.03 101.36 97.03 72.78 72.58 71.89 71.15 70.09 70.09 61.19 60.34 59.65 59.25 57.10 40.64 40.46 35.82 33.63 23.39 20.35 12.70 10.75 9.76 5.07 2.69 2.58 2.45 2.45 2.42 2.33 2.32 1.67 0.84 0.77 0.75 0.75 0.72 0.69 0.68 0.67 0.60 0.57 0.57 0.48 0.22 0.22 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 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
_________________________________________________________________________________________________________
Iceland Andorra Vatican City Italy Portugal Cyprus Norway Austria San Marino Faroe Islands Jersey Guernsey Switzerland Ireland Belgium the United Kingdom Liechtenstein Finland France Spain Slovenia Germany Netherlands Estonia Sweden Luxembourg Albania Poland Czech Republic Latvia Croatia Moldova Kazakhstan Bulgaria Denmark Romania Bosnia & Herzegovina Macedonia Greece Serbia & Montenegro Malta Isle of Man Hungary Ukraine Gibraltar Georgia Monaco Belarus Slovakia Russian Federation Lithuania
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.7 3.7.1
119
PRODUCTIVITY IN BULGARIA: LIABILITY-LABOR RATIOS Overview
In this chapter we consider the liability-labor ratios of companies operating in Bulgaria benchmarked against global averages for sanitary services. For ratios where there are large deviations between Bulgaria 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 sanitary 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 sanitary services that Bulgaria 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.
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Financial Indicators
3.7.2
120
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 sanitary services in Bulgaria based on latest financial results available. Labor-liability Ratios ($k/employee) Bulgaria Europe World Avg. _________________________________________________________________________________________________________
Accounts Payable Short Term Debt & Current Portion of Long Term Debt Accrued Payroll Other Current Liabilities Current Liabilities - Total Long Term Debt Long Term Debt Excluding Capitalized Leases Capitalized Lease Obligations Provision For Risks and Charges Deferred Income Deferred Taxes Deferred Taxes - Credit Deferred Taxes - Debit Other Liabilities Total Liabilities Non-Equity Reserves Minority Interest Common Equity Common Stock Capital Surplus Revaluation Reserves Other Appropriated Reserves Retained Earnings Total Liabilities & Shareholders Equity
24.30 4.89 0.33 12.49 42.01 16.10 16.09 0.01 8.89 4.98 3.90 9.30 5.40 0.01 75.89 2.27 3.66 209.06 25.60 46.80 38.44 98.66 -0.44 289.74
72.61 62.57 3.53 56.05 194.98 178.15 167.16 11.07 62.74 15.43 18.56 34.96 19.08 63.91 499.26 30.08 8.79 340.76 110.76 53.12 31.82 53.36 95.06 875.73
51.76 107.78 1.39 63.00 231.08 397.36 395.59 1.83 14.78 4.31 22.92 23.19 5.93 43.88 707.54 5.34 64.52 425.89 161.04 48.86 7.52 37.57 62.93 1204.34
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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©2007 Icon Group International, Inc.
Financial Indicators
3.7.3
121
Liability and Equity to Labor: International Gaps
The following graphics summarize for sanitary services the large labor-liability gaps between firms operating in Bulgaria 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 ($k/employee) 150
107.78
100 50
62.57 4.89
0 -50 -100 -150
-102.89 Bulgaria
Europe
World Average
Gap
Gap: Current Liabilities - Total ($k/employee) 300
194.98
200 100
231.08
42.01
0 -100 -200
Bulgaria
Europe
-189.07 Gap
World Average
Gap: Long Term Debt ($k/employee) 397.36
400 178.15
200 16.1 0 -200 -400
Bulgaria
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Europe
World Average
-381.26 Gap
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Financial Indicators
122
Gap: Long Term Debt Excluding Capitalized Leases ($k/employee) 395.59
400 167.16
200 16.09 0 -200 -400
Bulgaria
Europe
-379.5 Gap
World Average
Gap: Total Liabilities ($k/employee) 1000 500
499.26
707.54
75.89
0 -500 -1000
-631.65 Bulgaria
Europe
World Average
Gap
Gap: Minority Interest ($k/employee) 100
64.52
50 3.66
8.79
0 -50 -100
-60.86 Bulgaria
Europe
World Average
Gap
Gap: Common Equity ($k/employee) 600 400
340.76
425.89
209.06
200 0 -200 -400
-216.83 Bulgaria
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Europe
World Average
Gap
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Financial Indicators
123
Gap: Common Stock ($k/employee) 200 150 100 50 0 -50 -100 -150
161.04 110.76 25.6
Bulgaria
Europe
-135.44 Gap
World Average
Gap: Other Appropriated Reserves ($k/employee) 98.66
100 80
61.09
53.36
60
37.57
40 20 0
Bulgaria
Europe
World Average
Gap
Gap: Retained Earnings ($k/employee) 95.06
100
62.93
50 0
0.44
-50 -100
-62.49 Bulgaria
Europe
World Average
Gap
Gap: Total Liabilities & Shareholders Equity ($k/employee) 1500
1204.34 875.73
1000 500
289.74
0 -500 -1000
Bulgaria
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Europe
World Average
-914.6 Gap
©2007 Icon Group International, Inc.
Financial Indicators
3.7.4
124
Key Percentiles and Rankings
We now consider the distribution of liability-labor ratios using ranks and percentiles across . What percent of countries have a value lower or higher than Bulgaria (what is the indicator's rank or percentile)? The table below answers this question with respect to liability-labor ratios. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance or productivity. After the summary table below, a few key liabilitylabor ratios are highlighted in additional tables. Liability Structure ($k/employee)
Bulgaria
Rank of Total
Percentile
24.30 4.89 0.33 12.49 42.01 16.10 16.09 0.01 8.89 4.98 3.90 9.30 5.40 0.01 75.89 2.27 3.66 209.06 25.60 46.80 38.44 98.66 -0.44 289.74
38 of 52 50 of 54 25 of 27 50 of 54 48 of 54 47 of 53 47 of 53 23 of 23 24 of 39 18 of 29 22 of 41 17 of 23 17 of 24 52 of 52 48 of 54 17 of 26 30 of 40 41 of 54 44 of 52 18 of 43 10 of 21 9 of 48 51 of 52 45 of 54
26.92 7.41 7.41 7.41 11.11 11.32 11.32 0.00 38.46 37.93 46.34 26.09 29.17 0.00 11.11 34.62 25.00 24.07 15.38 58.14 52.38 81.25 1.92 16.67
_________________________________________________________________________________________________________
Accounts Payable Short Term Debt & Current Portion of Long Term Debt Accrued Payroll Other Current Liabilities Current Liabilities - Total Long Term Debt Long Term Debt Excluding Capitalized Leases Capitalized Lease Obligations Provision For Risks and Charges Deferred Income Deferred Taxes Deferred Taxes - Credit Deferred Taxes - Debit Other Liabilities Total Liabilities Non-Equity Reserves Minority Interest Common Equity Common Stock Capital Surplus Revaluation Reserves Other Appropriated Reserves Retained Earnings Total Liabilities & Shareholders Equity
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Financial Indicators
125
Accounts Payable Countries
Value ($K/employee)
Rank
Percentile
1041.24 482.81 255.84 176.55 149.67 112.73 106.91 101.11 91.22 90.68 76.01 71.12 68.37 64.05 50.78 50.64 50.64 44.33 44.01 42.93 42.04 39.89 39.19 37.05 33.96 33.49 28.14 27.05 25.62 25.41 23.77 22.40 21.11 20.37 19.98 19.74 17.65 12.10 11.06 10.40 10.28 4.22 3.68
1 2 3 4 5 6 7 8 9 10 11 12 13 14 18 19 20 23 24 25 26 27 28 29 31 32 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 64.71 62.75 60.78 54.90 52.94 50.98 49.02 47.06 45.10 43.14 39.22 37.25 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96
Region
_________________________________________________________________________________________________________
Belgium Netherlands South Korea Australia Switzerland New Zealand USA Italy China Luxembourg Canada Spain Thailand Philippines Turkey Mexico Indonesia Portugal Pakistan Peru France Czech Republic Sweden the United Kingdom Austria Germany Poland Hong Kong Israel Ireland Japan Brazil Norway Malaysia Denmark Chile Singapore Taiwan India Hungary Finland Russian Federation Greece
Europe Europe Asia Oceana Europe Oceana North America Europe Asia Europe North America Europe Asia Asia the Middle East Latin America Asia Europe the Middle East Latin America Europe Europe Europe Europe Europe Europe Europe Asia the Middle East Europe Asia Latin America Europe Asia Europe Latin America Asia Asia Asia Europe Europe Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
126
Accounts Payable (Sanitary Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
1041.24 482.81 246.64 149.67 139.66 116.74 108.00 101.92 101.11 90.68 71.12 66.77 48.25 44.33 44.28 43.03 42.43 42.04 41.51 39.89 39.19 37.87 37.85 37.47 37.05 33.96 33.64 33.49 32.80 32.80 28.14 25.94 25.41 25.30 24.35 24.30 21.11 19.98 17.11 10.40 10.28 9.35 8.89 8.75 4.22 4.21 3.68 3.41 3.38 3.37 3.37
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
_________________________________________________________________________________________________________
Belgium Netherlands Estonia Switzerland Liechtenstein Andorra Iceland Vatican City Italy Luxembourg Spain Slovenia Romania Portugal Bosnia & Herzegovina Macedonia Cyprus France Serbia & Montenegro Czech Republic Sweden Latvia Croatia Albania the United Kingdom Austria San Marino Germany Guernsey Jersey Poland Faroe Islands Ireland Moldova Kazakhstan Bulgaria Norway Denmark Monaco Hungary Finland Ukraine Gibraltar Georgia Russian Federation Lithuania Greece Malta Belarus Slovakia Isle of Man
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
127
Current Liabilities - Total Countries
Value ($K/employee)
Rank
Percentile
1445.92 965.60 786.73 724.09 651.70 491.34 388.98 381.37 326.95 319.13 282.17 257.98 226.98 210.87 206.68 195.11 192.73 190.72 189.62 184.69 177.92 174.88 173.37 167.66 158.37 157.93 155.06 154.42 144.24 140.68 140.46 134.60 130.12 80.42 76.93 57.85 54.76 54.31 52.30 48.64 40.47 28.56 28.47 26.21 7.64
1 2 3 4 5 6 7 8 9 10 11 12 14 15 16 17 18 19 20 21 22 23 24 25 27 28 29 30 34 35 36 37 39 41 42 43 44 45 46 47 48 49 50 51 53
98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 49.06 47.17 45.28 43.40 35.85 33.96 32.08 30.19 26.42 22.64 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 3.77 0.00
Region
_________________________________________________________________________________________________________
Belgium Pakistan Netherlands Australia South Korea China Italy USA Peru Spain Switzerland Austria Japan Malaysia New Zealand Sweden Portugal Thailand the United Kingdom Argentina Philippines Hong Kong Canada Finland Turkey Mexico Germany Norway Denmark Indonesia Luxembourg France Chile Czech Republic Brazil Hungary Israel Ireland Taiwan Poland Greece South Africa Singapore India Russian Federation
Europe the Middle East Europe Oceana Asia Asia Europe North America Latin America Europe Europe Europe Asia Asia Oceana Europe Europe Asia Europe Latin America Asia Asia North America Europe the Middle East Latin America Europe Europe Europe Asia Europe Europe Latin America Europe Latin America Europe the Middle East Europe Asia Europe Europe Africa Asia Asia Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
128
Current Liabilities - Total (Sanitary Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
1445.92 786.73 628.26 392.13 388.98 385.28 319.13 299.59 285.40 282.17 263.31 257.98 255.53 249.14 249.14 214.03 195.11 192.73 189.62 184.49 167.69 167.66 155.06 154.42 150.47 144.24 140.46 138.08 134.60 134.20 129.45 80.42 76.34 76.30 57.85 54.31 52.02 49.47 48.70 48.64 43.73 42.09 42.01 40.47 37.51 37.02 27.61 16.55 16.51 7.64 7.62
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 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
_________________________________________________________________________________________________________
Belgium Netherlands Estonia Vatican City Italy Iceland Spain Slovenia Albania Switzerland Liechtenstein Austria San Marino Guernsey Jersey Andorra Sweden Portugal the United Kingdom Cyprus Faroe Islands Finland Germany Norway Romania Denmark Luxembourg Bosnia & Herzegovina France Macedonia Serbia & Montenegro Czech Republic Latvia Croatia Hungary Ireland Ukraine Gibraltar Georgia Poland Moldova Kazakhstan Bulgaria Greece Malta Isle of Man Monaco Belarus Slovakia Russian Federation Lithuania
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
129
Long Term Debt Countries
Value ($K/employee)
Rank
Percentile
5053.36 1718.01 1114.48 928.34 665.12 643.06 637.93 614.52 475.98 465.67 440.17 383.58 344.20 342.83 339.55 338.78 333.57 329.43 293.30 269.21 268.48 268.47 258.81 256.07 228.09 215.45 190.94 159.56 71.48 65.89 55.36 48.37 44.47 39.06 33.59 33.32 28.18 18.64 12.01 2.13 1.28 0.80 0.50 0.30
1 2 3 5 7 8 9 10 11 12 13 14 16 17 18 19 20 21 22 24 25 26 27 28 31 32 34 35 36 37 38 39 40 41 42 43 44 46 47 48 49 50 51 52
98.08 96.15 94.23 90.38 86.54 84.62 82.69 80.77 78.85 76.92 75.00 73.08 69.23 67.31 65.38 63.46 61.54 59.62 57.69 53.85 51.92 50.00 48.08 46.15 40.38 38.46 34.62 32.69 30.77 28.85 26.92 25.00 23.08 21.15 19.23 17.31 15.38 11.54 9.62 7.69 5.77 3.85 1.92 0.00
Region
_________________________________________________________________________________________________________
Australia Pakistan Thailand China Canada USA Malaysia Sweden Japan Peru Belgium Austria Finland Portugal Philippines South Korea Netherlands Norway New Zealand Turkey Indonesia Mexico Italy Spain Hong Kong Chile the United Kingdom Switzerland France Denmark Germany Luxembourg Brazil South Africa Israel Ireland Czech Republic Poland India Hungary Singapore Greece Russian Federation Taiwan
Oceana the Middle East Asia Asia North America North America Asia Europe Asia Latin America Europe Europe Europe Europe Asia Asia Europe Europe Oceana the Middle East Asia Latin America Europe Europe Asia Latin America Europe Europe Europe Europe Europe Europe Latin America Africa the Middle East Europe Europe Europe Asia Europe Asia Europe Europe Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
130
Long Term Debt (Sanitary Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
649.66 614.52 440.17 406.49 383.58 379.93 370.43 370.43 344.20 342.83 333.57 329.43 328.17 326.60 303.73 260.90 258.81 256.07 255.78 240.40 234.73 228.13 220.06 218.72 190.94 159.56 148.89 71.48 65.89 55.36 48.37 33.32 28.18 26.75 26.74 26.43 26.37 18.64 16.76 16.13 16.10 2.13 1.92 1.83 1.80 1.24 0.80 0.74 0.73 0.50 0.50
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
_________________________________________________________________________________________________________
Iceland Sweden Belgium Albania Austria San Marino Guernsey Jersey Finland Portugal Netherlands Norway Cyprus Estonia Andorra Vatican City Italy Spain Romania Slovenia Bosnia & Herzegovina Macedonia Serbia & Montenegro Faroe Islands the United Kingdom Switzerland Liechtenstein France Denmark Germany Luxembourg Ireland Czech Republic Latvia Croatia Belarus Slovakia Poland Moldova Kazakhstan Bulgaria Hungary Ukraine Gibraltar Georgia Monaco Greece Malta Isle of Man Russian Federation Lithuania
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
131
Total Liabilities Countries
Value ($K/employee)
Rank
Percentile
6613.83 2696.71 2676.79 1983.24 1428.68 1339.61 1173.71 1047.77 1031.31 1030.81 1021.45 1002.73 906.27 883.05 780.77 757.68 711.22 639.46 601.28 596.00 561.51 523.78 500.81 470.26 462.25 448.88 447.66 442.54 414.15 398.88 288.56 285.03 230.76 187.10 164.58 139.18 95.25 90.57 89.83 87.88 75.68 64.93 50.42 32.53 8.47
1 2 3 4 5 6 7 9 11 12 13 14 15 16 17 19 20 21 22 23 24 25 26 27 28 29 30 32 34 35 38 39 40 41 42 43 44 45 46 47 48 49 50 52 53
98.11 96.23 94.34 92.45 90.57 88.68 86.79 83.02 79.25 77.36 75.47 73.58 71.70 69.81 67.92 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 39.62 35.85 33.96 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 1.89 0.00
Region
_________________________________________________________________________________________________________
Australia Pakistan Belgium USA China Thailand Netherlands Malaysia Peru Sweden South Korea Switzerland Canada Austria Japan Italy Spain Finland Portugal New Zealand Germany Philippines Norway Hong Kong France Turkey Mexico the United Kingdom Indonesia Chile Denmark Luxembourg Taiwan Argentina Brazil Czech Republic South Africa Israel Ireland Poland Greece Hungary India Singapore Russian Federation
Oceana the Middle East Europe North America Asia Asia Europe Asia Latin America Europe Asia Europe North America Europe Asia Europe Europe Europe Europe Oceana Europe Asia Europe Asia Europe the Middle East Latin America Europe Asia Latin America Europe Europe Asia Latin America Latin America Europe Africa the Middle East Europe Europe Europe Europe Asia Asia Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
132
Total Liabilities (Sanitary Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
2676.79 2003.58 1173.71 1030.81 1002.73 984.71 935.69 900.24 883.05 874.65 852.78 852.78 763.81 757.68 711.22 667.68 639.46 617.19 601.28 575.56 561.51 500.81 462.25 450.94 442.54 426.50 391.39 380.39 366.93 288.56 285.03 139.18 132.11 132.05 89.83 87.88 79.01 76.03 75.89 75.68 70.14 69.22 64.93 58.38 55.51 54.66 45.65 45.55 31.54 8.47 8.45
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
_________________________________________________________________________________________________________
Belgium Iceland Netherlands Sweden Switzerland Estonia Liechtenstein Albania Austria San Marino Jersey Guernsey Vatican City Italy Spain Slovenia Finland Andorra Portugal Cyprus Germany Norway France Faroe Islands the United Kingdom Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Denmark Luxembourg Czech Republic Latvia Croatia Ireland Poland Moldova Kazakhstan Bulgaria Greece Malta Isle of Man Hungary Ukraine Gibraltar Georgia Belarus Slovakia Monaco Russian Federation Lithuania
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
133
Common Equity Countries
Value ($K/employee)
Rank
Percentile
3193.36 2023.62 1897.43 1032.13 950.56 924.81 884.97 866.46 742.82 652.55 620.86 612.83 598.43 586.53 460.24 444.94 418.44 408.94 379.69 375.92 374.59 354.32 335.75 334.83 318.74 309.46 309.30 289.14 286.84 257.08 244.69 242.07 236.28 209.60 203.29 165.50 124.14 123.29 108.87 87.11 86.39 79.18 58.94 32.31 29.74
1 2 3 5 6 7 8 9 10 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 30 31 32 33 35 36 37 38 40 41 43 44 45 46 47 48 49 50 52 53
98.11 96.23 94.34 90.57 88.68 86.79 84.91 83.02 81.13 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 43.40 41.51 39.62 37.74 33.96 32.08 30.19 28.30 24.53 22.64 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 1.89 0.00
Region
_________________________________________________________________________________________________________
Australia Peru Pakistan Hong Kong USA Belgium Thailand Argentina South Korea Switzerland Malaysia China New Zealand Spain Italy Canada Chile Sweden Luxembourg Germany Taiwan Austria Turkey Mexico Brazil Philippines Portugal the United Kingdom Norway Denmark Indonesia Poland Japan Finland Netherlands Czech Republic France Greece Hungary Israel Ireland South Africa India Singapore Russian Federation
Oceana Latin America the Middle East Asia North America Europe Asia Latin America Asia Europe Asia Asia Oceana Europe Europe North America Latin America Europe Europe Europe Asia Europe the Middle East Latin America Latin America Asia Europe Europe Europe Europe Asia Europe Asia Europe Europe Europe Europe Europe Europe the Middle East Europe Africa Asia Asia Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
134
Common Equity (Sanitary Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
1766.43 989.72 960.31 924.81 716.10 652.55 619.72 608.92 586.53 550.63 463.97 460.24 408.94 379.69 375.92 354.32 350.95 342.18 342.18 319.01 309.30 296.07 292.75 289.14 286.84 284.52 274.45 257.08 242.07 217.64 209.60 209.44 209.06 203.29 165.50 157.09 157.02 124.14 123.29 114.27 112.76 108.87 97.91 93.09 91.65 86.39 51.01 50.89 31.34 29.74 29.67
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
_________________________________________________________________________________________________________
Albania Faroe Islands Iceland Belgium Estonia Switzerland Andorra Liechtenstein Spain Slovenia Vatican City Italy Sweden Luxembourg Germany Austria San Marino Guernsey Jersey Romania Portugal Cyprus Bosnia & Herzegovina the United Kingdom Norway Macedonia Serbia & Montenegro Denmark Poland Moldova Finland Kazakhstan Bulgaria Netherlands Czech Republic Latvia Croatia France Greece Malta Isle of Man Hungary Ukraine Gibraltar Georgia Ireland Belarus Slovakia Monaco Russian Federation Lithuania
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
135
Retained Earnings Countries
Value ($K/employee)
Rank
Percentile
377.27 309.78 276.91 273.65 273.15 265.16 260.72 227.13 208.95 196.97 160.44 151.05 149.84 128.23 124.48 122.41 106.60 106.31 101.39 95.19 85.30 79.40 78.75 75.29 73.16 71.05 66.83 66.34 63.84 43.76 34.23 23.82 22.51 21.00 18.92 18.24 15.11 7.19 6.05 2.92 2.35 0.00 -0.51
1 2 3 4 5 6 7 10 11 12 13 14 15 16 17 18 20 21 22 25 26 27 28 29 30 32 33 34 35 36 37 39 40 41 42 43 44 45 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 60.78 58.82 56.86 50.98 49.02 47.06 45.10 43.14 41.18 37.25 35.29 33.33 31.37 29.41 27.45 23.53 21.57 19.61 17.65 15.69 13.73 11.76 7.84 5.88 3.92 1.96 0.00
Region
_________________________________________________________________________________________________________
Switzerland Thailand Malaysia New Zealand Hong Kong Austria USA Norway South Korea Canada the United Kingdom Japan Germany Philippines Finland Australia Turkey Mexico Indonesia Portugal Spain Israel Ireland South Africa Italy Sweden Argentina Czech Republic Chile Peru India Denmark Luxembourg Greece France Brazil Taiwan China Singapore Russian Federation Hungary Pakistan Poland
Europe Asia Asia Oceana Asia Europe North America Europe Asia North America Europe Asia Europe Asia Europe Oceana the Middle East Latin America Asia Europe Europe the Middle East Europe Africa Europe Europe Latin America Europe Latin America Latin America Asia Europe Europe Europe Europe Latin America Asia Asia Asia Europe Europe the Middle East Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Financial Indicators
136
Retained Earnings (Sanitary Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
377.27 352.05 283.38 265.16 263.39 262.64 261.92 256.07 256.07 227.13 201.44 160.44 149.84 124.48 101.29 95.19 92.95 91.12 90.34 87.14 85.30 80.08 78.75 73.75 73.16 71.05 66.34 62.97 62.94 38.20 23.82 22.51 21.00 19.46 19.20 18.92 6.54 6.53 5.87 2.92 2.91 2.35 2.11 2.01 1.98 -0.44 -0.44 -0.46 -0.51
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 39 40 41 42 43 44 45 46 47 48 49
97.96 95.92 93.88 91.84 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 63.27 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 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
_________________________________________________________________________________________________________
Switzerland Liechtenstein Andorra Austria Iceland San Marino Faroe Islands Guernsey Jersey Norway Estonia the United Kingdom Germany Finland Romania Portugal Bosnia & Herzegovina Cyprus Macedonia Serbia & Montenegro Spain Slovenia Ireland Vatican City Italy Sweden Czech Republic Latvia Croatia Albania Denmark Luxembourg Greece Malta Isle of Man France Belarus Slovakia Monaco Russian Federation Lithuania Hungary Ukraine Gibraltar Georgia Bulgaria Kazakhstan Moldova Poland
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.8 3.8.1
137
PRODUCTIVITY IN BULGARIA: INCOME-LABOR RATIOS Overview
In this chapter we consider the income-labor ratios for sanitary services in Bulgaria benchmarked against global averages. For ratios where there are large deviations between the average firm operating in Bulgaria 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 sanitary services that Bulgaria 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.
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Financial Indicators
3.8.2
138
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 sanitary services in Bulgaria based on latest financial results available. Labor-income Ratios ($k/employee) Bulgaria Europe World Avg. _________________________________________________________________________________________________________
Net Sales or Revenues Cost of Goods Sold (Excluding Depreciation) Depreciation, Depletion & Amortization Gross Income Selling, General & Administrative Expenses Other Operating Expenses Operating Expenses - Total Operating Income Extraordinary Credit - Pretax Extraordinary Charge - Pretax Non-Operating Interest Income Pretax Equity In Earnings 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 Minority Interest Equity in Earnings After Tax Other Income/Expense Net Income Before Extra Items/Prefer Dividends Net Income Before Preferred Dividends Net Income Available to Common
144.34 115.77 17.20 11.38 11.75 146.00 1.29 -1.66 0.00 0.01 3.18 0.02 0.25 1.78 2.40 -0.62 -0.40 0.03 -0.24 -0.12 0.00 -0.03 -0.12 -0.12 -0.12
564.87 494.27 36.79 83.66 27.14 419.32 16.09 48.96 3.07 8.15 13.15 0.38 21.77 75.80 18.11 57.86 15.03 11.97 3.31 0.40 2.07 -0.42 42.70 42.74 42.52
554.26 408.20 38.32 126.90 26.85 253.94 11.58 75.11 0.87 2.24 8.54 -0.23 6.84 82.52 23.78 63.72 12.64 6.95 1.53 6.12 0.55 0.06 45.85 45.80 45.74
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.8.3
139
Income to Labor: Gaps
The following graphics summarize for sanitary services the large labor-income gaps between firms operating in Bulgaria 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) 564.87
600 400 200
554.26
144.34
0 -200 -400 -600
-409.92 Bulgaria
Europe
World Average
Gap
Gap: Cost of Goods Sold (Excluding Depreciation) ($k/employee) 494.27
600
408.2
400 200
115.77
0 -200 -400
-292.43 Bulgaria
Europe
World Average
Gap
Gap: Gross Income ($k/employee) 126.9
150 83.66
100 50
11.38
0 -50 -100 -150
-115.52 Bulgaria
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Europe
World Average
Gap
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Financial Indicators
140
Gap: Other Operating Expenses ($k/employee) 500 400 300 200 100 0 -100 -200
419.32 253.94 146
-107.94 Bulgaria
Europe
World Average
Gap
Gap: Operating Income ($k/employee) 100
75.11 48.96
50 1.66 0 -50
-73.45 -100
Bulgaria
Europe
World Average
Gap
Gap: Earnings Before Interest and Taxes (EBIT) ($k/employee) 100
75.8
82.52
50 1.78 0 -50 -100
-80.74 Bulgaria
Europe
World Average
Gap
Gap: Interest Expense on Debt ($k/employee) 30
18.11
20 10
23.78
2.4
0 -10 -20 -30
-21.38 Bulgaria
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Europe
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
141
Gap: Pretax Income ($k/employee) 100
57.86
63.72
50 0
0.62
-50 -100
-63.1 Bulgaria
Europe
World Average
Gap
Gap: Net Income Before Extra Items/Prefer Dividends ($k/employee) 60
42.7
45.85
40 20 0
0.12
-20 -40 -60
-45.73 Bulgaria
Europe
World Average
Gap
Gap: Net Income Before Preferred Dividends ($k/employee) 60
42.74
45.8
40 20 0
0.12
-20 -40 -60
-45.68 Bulgaria
Europe
World Average
Gap
Gap: Net Income Available to Common ($k/employee) 60
42.52
45.74
40 20 0
0.12
-20 -40 -60
-45.62 Bulgaria
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Europe
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
3.8.4
142
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 Bulgaria (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 income-labor ratios are highlighted in additional tables. Income Structure ($k/employee)
Bulgaria
Rank of Total
Percentile
144.34 115.77 17.20 11.38 11.75 146.00 1.29 -1.66 0.00 0.01 3.18 0.02 0.25 1.78 2.40 -0.62 -0.40 0.03 -0.24 -0.12 0.00 -0.03 -0.12 -0.12 -0.12
46 of 54 42 of 53 44 of 54 50 of 53 30 of 37 41 of 52 43 of 45 52 of 54 29 of 29 35 of 37 31 of 52 17 of 33 47 of 54 54 of 54 48 of 54 53 of 54 52 of 54 39 of 39 26 of 34 35 of 37 18 of 18 4 of 9 53 of 54 53 of 54 53 of 54
14.81 20.75 18.52 5.66 18.92 21.15 4.44 3.70 0.00 5.41 40.38 48.48 12.96 0.00 11.11 1.85 3.70 0.00 23.53 5.41 0.00 55.56 1.85 1.85 1.85
_________________________________________________________________________________________________________
Net Sales or Revenues Cost of Goods Sold (Excluding Depreciation) Depreciation, Depletion & Amortization Gross Income Selling, General & Administrative Expenses Other Operating Expenses Operating Expenses - Total Operating Income Extraordinary Credit - Pretax Extraordinary Charge - Pretax Non-Operating Interest Income Pretax Equity In Earnings Other Income/Expense Net Earnings Before Interest and Taxes (EBIT) Interest Expense on Debt Pretax Income Income Taxes Current Domestic Income Tax Deferred Domestic Income Tax Minority Interest Equity in Earnings After Tax Other Income/Expense Net Income Before Extra Items/Prefer Dividends Net Income Before Preferred Dividends Net Income Available to Common
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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©2007 Icon Group International, Inc.
Financial Indicators
143
Cost of Goods Sold (Excluding Depreciation) Countries
Value ($K/employee)
Rank
Percentile
8588.44 2877.97 1910.73 1046.96 967.62 902.94 780.65 620.89 524.20 393.83 376.81 362.27 330.94 325.65 295.08 291.35 288.36 287.58 285.16 281.91 276.04 271.77 271.17 263.72 226.48 213.67 202.00 178.78 173.50 170.61 159.52 153.05 140.23 134.05 128.18 127.12 120.75 98.65 84.42 78.00 62.11 59.33 25.94 17.64
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 23 24 26 28 29 31 32 33 34 35 36 37 38 39 40 41 42 43 45 47 48 50 51
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 55.77 53.85 50.00 46.15 44.23 40.38 38.46 36.54 34.62 32.69 30.77 28.85 26.92 25.00 23.08 21.15 19.23 17.31 13.46 9.62 7.69 3.85 1.92
Region
_________________________________________________________________________________________________________
Belgium Netherlands South Korea Switzerland China Pakistan Australia Germany USA Spain Austria New Zealand the United Kingdom Thailand Sweden Japan Turkey Mexico Peru Italy Portugal Denmark Canada Argentina Luxembourg Hong Kong France Finland Hungary Chile Norway Czech Republic Malaysia Poland Israel Ireland Taiwan Philippines India Indonesia Singapore Brazil Greece Russian Federation
Europe Europe Asia Europe Asia the Middle East Oceana Europe North America Europe Europe Oceana Europe Asia Europe Asia the Middle East Latin America Latin America Europe Europe Europe North America Latin America Europe Asia Europe Europe Europe Latin America Europe Europe Asia Europe the Middle East Europe Asia Asia Asia Asia Asia Latin America Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
144
Cost of Goods Sold (Excluding Depreciation) (Sanitary Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
8588.44 2877.97 1842.01 1046.96 976.97 620.89 529.58 393.83 376.81 375.16 373.22 369.72 363.89 363.89 330.94 295.08 284.19 281.91 276.04 273.98 271.77 264.23 251.43 248.92 244.36 235.72 226.48 204.89 202.00 178.78 173.50 159.52 156.02 153.05 148.35 146.06 145.27 145.21 134.05 127.12 120.52 115.98 115.77 60.23 25.94 24.04 23.72 17.64 17.60 13.98 13.94
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Belgium Netherlands Estonia Switzerland Liechtenstein Germany Iceland Spain Austria Andorra San Marino Slovenia Guernsey Jersey the United Kingdom Sweden Vatican City Italy Portugal Romania Denmark Cyprus Bosnia & Herzegovina Albania Macedonia Serbia & Montenegro Luxembourg Faroe Islands France Finland Hungary Norway Ukraine Czech Republic Gibraltar Georgia Latvia Croatia Poland Ireland Moldova Kazakhstan Bulgaria Monaco Greece Malta Isle of Man Russian Federation Lithuania Belarus Slovakia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
145
Selling, General & Administrative Expenses Countries
Value ($K/employee)
Rank
Percentile
131.11 96.42 94.93 92.19 62.55 55.72 47.76 47.00 45.59 38.86 38.64 38.53 37.09 33.20 31.36 28.31 28.16 26.39 25.65 23.48 21.94 18.31 16.85 16.11 13.60 10.33 9.42 8.86 8.28 7.24 6.98 0.02
1 2 3 4 5 6 7 8 9 10 11 12 13 15 16 17 18 19 20 22 23 26 27 28 29 30 31 32 33 34 35 36
97.22 94.44 91.67 88.89 86.11 83.33 80.56 77.78 75.00 72.22 69.44 66.67 63.89 58.33 55.56 52.78 50.00 47.22 44.44 38.89 36.11 27.78 25.00 22.22 19.44 16.67 13.89 11.11 8.33 5.56 2.78 0.00
Region
_________________________________________________________________________________________________________
Japan USA South Korea Italy New Zealand the United Kingdom China Canada Norway Sweden Turkey Mexico Brazil Chile Germany Peru Thailand Australia France Switzerland Pakistan Taiwan Greece Malaysia Poland Hong Kong Denmark Singapore Hungary Austria Finland Russian Federation
Asia North America Asia Europe Oceana Europe Asia North America Europe Europe the Middle East Latin America Latin America Latin America Europe Latin America Asia Oceana Europe Europe the Middle East Asia Europe Asia Europe Asia Europe Asia Europe Europe Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
146
Selling, General & Administrative Expenses (Sanitary Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
97.41 92.94 92.19 91.52 64.77 55.72 45.59 38.86 36.71 33.69 32.74 31.58 31.36 25.65 24.71 23.48 21.91 16.85 15.61 15.41 13.60 12.23 11.77 11.75 9.91 9.42 8.60 8.28 7.44 7.24 7.17 7.08 6.99 6.99 6.98 6.97 0.02 0.02
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38
97.37 94.74 92.11 89.47 86.84 84.21 81.58 78.95 76.32 73.68 71.05 68.42 65.79 63.16 60.53 57.89 55.26 52.63 50.00 47.37 44.74 42.11 39.47 36.84 34.21 31.58 28.95 26.32 23.68 21.05 18.42 15.79 13.16 10.53 7.89 5.26 2.63 0.00
_________________________________________________________________________________________________________
Iceland Vatican City Italy Estonia Andorra the United Kingdom Norway Sweden Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Germany France Albania Switzerland Liechtenstein Greece Malta Isle of Man Poland Moldova Kazakhstan Bulgaria Faroe Islands Denmark Monaco Hungary Ukraine Austria San Marino Gibraltar Guernsey Jersey Finland Georgia Russian Federation Lithuania
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
147
Operating Expenses - Total Countries
Value ($K/employee)
Rank
Percentile
92.60 72.85 62.92 59.96 53.75 50.14 43.21 36.36 34.24 32.04 28.75 28.41 27.09 23.55 22.52 21.00 19.83 19.67 14.04 11.48 10.57 10.28 7.96 7.07 6.71 6.28 5.83 5.14 4.94 4.90 4.53 2.48 1.86 1.80 1.49 0.01 0.01
1 2 3 4 5 6 7 8 9 10 12 13 14 16 17 18 20 21 22 23 24 25 28 29 30 31 32 33 34 35 37 39 40 41 42 43 44
97.73 95.45 93.18 90.91 88.64 86.36 84.09 81.82 79.55 77.27 72.73 70.45 68.18 63.64 61.36 59.09 54.55 52.27 50.00 47.73 45.45 43.18 36.36 34.09 31.82 29.55 27.27 25.00 22.73 20.45 15.91 11.36 9.09 6.82 4.55 2.27 0.00
Region
_________________________________________________________________________________________________________
Australia USA Belgium Switzerland Canada Germany Norway Philippines Austria Italy Indonesia France Spain the United Kingdom Netherlands Hong Kong Israel Ireland South Korea Japan Thailand Luxembourg Finland Portugal Malaysia Peru Czech Republic Singapore China Hungary Brazil India Sweden Russian Federation Poland Pakistan Denmark
Oceana North America Europe Europe North America Europe Europe Asia Europe Europe Asia Europe Europe Europe Europe Asia the Middle East Europe Asia Asia Asia Europe Europe Europe Asia Latin America Europe Asia Asia Europe Latin America Asia 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
148
Operating Expenses - Total (Sanitary Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
73.60 62.92 59.96 55.95 50.14 43.21 34.24 33.91 33.06 33.06 32.30 32.04 28.41 27.09 25.43 23.55 22.52 20.13 19.67 13.53 10.28 7.96 7.07 6.77 5.83 5.54 5.53 5.49 4.98 4.90 4.41 4.19 4.13 3.87 3.86 1.86 1.80 1.79 1.49 1.34 1.29 1.29 0.01
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43
97.67 95.35 93.02 90.70 88.37 86.05 83.72 81.40 79.07 76.74 74.42 72.09 69.77 67.44 65.12 62.79 60.47 58.14 55.81 53.49 51.16 48.84 46.51 44.19 41.86 39.53 37.21 34.88 32.56 30.23 27.91 25.58 23.26 20.93 18.60 16.28 13.95 11.63 9.30 6.98 4.65 2.33 0.00
_________________________________________________________________________________________________________
Iceland Belgium Switzerland Liechtenstein Germany Norway Austria San Marino Guernsey Jersey Vatican City Italy France Spain Slovenia the United Kingdom Netherlands Faroe Islands Ireland Estonia Luxembourg Finland Portugal Cyprus Czech Republic Latvia Croatia Albania Monaco Hungary Ukraine Gibraltar Georgia Belarus Slovakia Sweden Russian Federation Lithuania Poland Moldova Kazakhstan Bulgaria Denmark
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
149
Operating Income Countries
Value ($K/employee)
Rank
Percentile
691.54 685.01 268.59 187.36 183.81 164.53 145.39 132.51 120.61 120.29 119.96 117.23 102.15 97.55 87.96 86.73 79.16 75.16 68.52 62.94 61.38 59.43 55.35 49.23 45.80 34.80 32.34 31.49 28.34 18.43 18.09 18.09 17.83 17.82 15.20 14.03 11.18 7.73 5.82 5.80 5.77 1.85 1.79 -1.92 -11.98
1 2 3 5 6 7 8 10 12 13 14 15 17 18 19 20 21 22 23 25 26 27 29 30 31 33 34 35 36 37 38 39 40 41 42 43 45 46 47 48 49 50 51 52 53
98.11 96.23 94.34 90.57 88.68 86.79 84.91 81.13 77.36 75.47 73.58 71.70 67.92 66.04 64.15 62.26 60.38 58.49 56.60 52.83 50.94 49.06 45.28 43.40 41.51 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 18.87 15.09 13.21 11.32 9.43 7.55 5.66 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Australia Pakistan Peru Belgium Hong Kong Thailand Malaysia USA Argentina Turkey Mexico South Korea Sweden Switzerland Canada Spain China Philippines New Zealand Italy Chile Indonesia the United Kingdom Japan Austria Portugal Luxembourg Finland Denmark France Norway South Africa Germany Brazil Czech Republic Singapore Greece India Israel Hungary Ireland Russian Federation Taiwan Poland Netherlands
Oceana the Middle East Latin America Europe Asia Asia Asia North America Latin America the Middle East Latin America Asia Europe Europe North America Europe Asia Asia Oceana Europe Latin America Asia Europe Asia Europe Europe Europe Europe Europe Europe Europe Africa Europe Latin America Europe Asia Europe Asia the Middle East Europe Europe Europe Asia Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
150
Operating Income (Sanitary Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
234.45 187.36 176.25 133.86 114.29 113.02 104.88 102.15 101.93 98.33 97.55 91.02 86.73 81.42 70.95 63.45 62.94 55.35 45.80 45.36 44.23 44.23 34.80 33.31 32.34 31.49 28.34 18.43 18.09 17.83 15.20 14.43 14.42 13.61 12.94 12.91 11.18 10.36 10.22 5.80 5.77 5.21 4.96 4.88 1.85 1.84 -1.66 -1.66 -1.73 -1.92 -11.98
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
_________________________________________________________________________________________________________
Albania Belgium Faroe Islands Iceland Romania Estonia Bosnia & Herzegovina Sweden Macedonia Serbia & Montenegro Switzerland Liechtenstein Spain Slovenia Andorra Vatican City Italy the United Kingdom Austria San Marino Guernsey Jersey Portugal Cyprus Luxembourg Finland Denmark France Norway Germany Czech Republic Latvia Croatia Monaco Belarus Slovakia Greece Malta Isle of Man Hungary Ireland Ukraine Gibraltar Georgia Russian Federation Lithuania Bulgaria Kazakhstan Moldova Poland Netherlands
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
151
Earnings Before Interest and Taxes (EBIT) Countries
Value ($K/employee)
Rank
Percentile
772.70 756.16 297.03 252.59 239.94 200.12 187.25 186.74 177.14 162.10 159.22 154.68 134.80 116.15 114.49 112.88 110.86 110.65 90.55 90.42 77.88 73.54 68.91 65.29 62.20 61.58 59.48 57.12 45.66 44.38 35.25 31.14 28.09 24.99 23.94 23.30 22.85 18.32 17.80 11.36 9.78 5.38 5.33 2.55 2.06
1 2 3 4 5 6 7 8 10 12 13 14 17 18 19 20 21 22 23 24 25 26 27 29 30 31 32 34 35 36 38 39 40 41 42 43 44 45 46 48 49 50 51 52 53
98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 81.13 77.36 75.47 73.58 67.92 66.04 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 35.85 33.96 32.08 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 9.43 7.55 5.66 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Australia Pakistan New Zealand Belgium Peru Hong Kong Turkey Mexico Thailand USA Switzerland Malaysia South Korea Luxembourg Sweden Spain Canada Argentina Germany Italy Philippines Austria China the United Kingdom Chile Indonesia Netherlands Finland Japan Portugal Greece Czech Republic Norway France Brazil Denmark South Africa Singapore Taiwan Hungary India Israel Ireland Russian Federation Poland
Oceana the Middle East Oceana Europe Latin America Asia the Middle East Latin America Asia North America Europe Asia Asia Europe Europe Europe North America Latin America Europe Europe Asia Europe Asia Europe Latin America Asia Europe Europe Asia Europe Europe Europe Europe Europe Latin America Europe Africa Asia Asia Europe Asia the Middle East Europe Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
152
Earnings Before Interest and Taxes (EBIT) (Sanitary Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
307.60 252.59 209.45 191.90 177.91 163.76 163.27 159.22 158.68 153.06 148.57 129.96 116.15 114.49 112.88 105.97 91.15 90.55 90.42 73.54 72.84 71.02 71.02 65.29 59.48 57.12 44.38 42.49 35.25 32.67 32.24 31.14 29.56 29.54 28.09 24.99 23.30 17.77 13.89 13.85 11.36 10.21 9.71 9.56 5.33 2.55 2.54 2.06 1.86 1.79 1.78
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
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Andorra Belgium Albania Faroe Islands Romania Iceland Bosnia & Herzegovina Switzerland Macedonia Serbia & Montenegro Liechtenstein Estonia Luxembourg Sweden Spain Slovenia Vatican City Germany Italy Austria San Marino Guernsey Jersey the United Kingdom Netherlands Finland Portugal Cyprus Greece Malta Isle of Man Czech Republic Latvia Croatia Norway France Denmark Monaco Belarus Slovakia Hungary Ukraine Gibraltar Georgia Ireland Russian Federation Lithuania Poland Moldova Kazakhstan Bulgaria
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Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
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Pretax Income Countries
Value ($K/employee)
Rank
Percentile
524.60 367.06 271.02 208.54 189.35 188.28 139.33 139.00 138.62 127.22 123.68 113.08 108.40 108.07 91.21 82.06 80.64 71.47 68.44 65.04 56.99 53.37 49.13 46.39 42.20 41.68 35.04 29.65 28.24 26.02 19.95 17.65 17.28 16.15 15.96 14.49 13.05 12.21 10.61 8.51 2.61 2.59 2.44 0.91 -0.72
1 2 3 4 5 6 8 9 10 12 13 14 15 16 17 18 19 21 23 24 25 26 27 28 30 31 33 35 36 37 38 39 40 41 42 43 44 45 46 48 49 50 51 52 53
98.11 96.23 94.34 92.45 90.57 88.68 84.91 83.02 81.13 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 60.38 56.60 54.72 52.83 50.94 49.06 47.17 43.40 41.51 37.74 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 9.43 7.55 5.66 3.77 1.89 0.00
Region
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Pakistan Australia New Zealand Belgium Peru Hong Kong Switzerland Turkey Mexico USA Malaysia Luxembourg South Korea Argentina Thailand Germany Spain China Italy Canada Sweden Philippines the United Kingdom Austria Indonesia Chile Greece Finland Japan Netherlands France Taiwan Czech Republic Portugal Denmark Singapore Brazil South Africa Hungary India Israel Ireland Russian Federation Norway Poland
the Middle East Oceana Oceana Europe Latin America Asia Europe the Middle East Latin America North America Asia Europe Asia Latin America Asia Europe Europe Asia Europe North America Europe Asia Europe Europe Asia Latin America Europe Europe Asia Europe Europe Asia Europe Europe Europe Asia Latin America Africa Europe Asia the Middle East Europe Europe Europe Europe
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Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Pretax Income (Sanitary Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
280.66 208.54 180.54 165.28 139.33 132.06 130.01 128.53 121.20 117.79 113.62 113.08 104.50 82.06 80.64 75.71 68.99 68.44 56.99 49.13 46.39 45.95 44.80 44.80 35.04 32.47 32.04 29.65 26.02 19.95 17.28 16.41 16.40 16.15 15.96 15.46 14.05 10.61 10.52 10.49 9.54 9.07 8.93 2.59 2.44 2.43 0.91 -0.62 -0.62 -0.64 -0.72
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51
98.04 96.08 94.12 92.16 90.20 88.24 86.27 84.31 82.35 80.39 78.43 76.47 74.51 72.55 70.59 68.63 66.67 64.71 62.75 60.78 58.82 56.86 54.90 52.94 50.98 49.02 47.06 45.10 43.14 41.18 39.22 37.25 35.29 33.33 31.37 29.41 27.45 25.49 23.53 21.57 19.61 17.65 15.69 13.73 11.76 9.80 7.84 5.88 3.92 1.96 0.00
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Andorra Belgium Faroe Islands Albania Switzerland Romania Liechtenstein Iceland Bosnia & Herzegovina Macedonia Serbia & Montenegro Luxembourg Estonia Germany Spain Slovenia Vatican City Italy Sweden the United Kingdom Austria San Marino Guernsey Jersey Greece Malta Isle of Man Finland Netherlands France Czech Republic Latvia Croatia Portugal Denmark Cyprus Monaco Hungary Belarus Slovakia Ukraine Gibraltar Georgia Ireland Russian Federation Lithuania Norway Bulgaria Kazakhstan Moldova Poland
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Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
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Income Taxes Countries
Value ($K/employee)
Rank
Percentile
145.39 84.91 83.41 47.84 41.23 36.16 35.46 35.36 34.51 27.20 27.13 25.00 24.37 22.72 16.55 15.30 14.45 12.73 11.89 11.79 11.61 11.50 9.78 9.67 8.48 8.43 8.08 6.91 5.09 5.01 4.94 3.51 3.41 2.77 2.73 2.03 2.03 1.60 1.49 1.08 0.64 0.63 0.38 -0.46 -2.47
1 2 3 5 6 7 8 9 10 12 13 14 15 16 17 18 19 20 21 22 23 24 26 27 29 30 31 32 33 34 35 36 37 38 39 41 42 44 46 48 49 50 51 52 53
98.11 96.23 94.34 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 64.15 62.26 60.38 58.49 56.60 54.72 50.94 49.06 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 22.64 20.75 16.98 13.21 9.43 7.55 5.66 3.77 1.89 0.00
Region
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Australia Belgium Peru USA Argentina South Korea Turkey Mexico Malaysia Italy Hong Kong Switzerland Spain Germany Luxembourg Sweden New Zealand China Austria Thailand Japan the United Kingdom Canada Portugal Denmark Finland Greece France Brazil Chile Czech Republic Netherlands Singapore India Taiwan Hungary Philippines Indonesia Pakistan Russian Federation Israel Ireland South Africa Poland Norway
Oceana Europe Latin America North America Latin America Asia the Middle East Latin America Asia Europe Asia Europe Europe Europe Europe Europe Oceana Asia Europe Asia Asia Europe North America Europe Europe Europe Europe Europe Latin America Latin America Europe Europe Asia Asia Asia Europe Asia Asia the Middle East Europe the Middle East Europe Africa Europe Europe
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Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Income Taxes (Sanitary Services) Countries in Europe
Value ($K/employee)
Rank
Percentile
84.91 72.81 48.34 34.86 33.69 30.92 30.05 28.98 27.42 27.20 26.01 25.00 24.37 23.33 22.88 22.72 16.55 15.30 14.96 11.89 11.78 11.50 11.48 11.48 9.67 9.25 8.48 8.43 8.08 7.49 7.39 6.91 4.94 4.69 4.68 3.51 3.31 2.69 2.69 2.03 1.83 1.74 1.71 1.08 1.08 0.63 -0.40 -0.40 -0.41 -0.46 -2.47
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
_________________________________________________________________________________________________________
Belgium Albania Iceland Estonia Romania Bosnia & Herzegovina Macedonia Serbia & Montenegro Vatican City Italy Faroe Islands Switzerland Spain Liechtenstein Slovenia Germany Luxembourg Sweden Andorra Austria San Marino the United Kingdom Guernsey Jersey Portugal Cyprus Denmark Finland Greece Malta Isle of Man France Czech Republic Latvia Croatia Netherlands Monaco Belarus Slovakia Hungary Ukraine Gibraltar Georgia Russian Federation Lithuania Ireland Bulgaria Kazakhstan Moldova Poland Norway
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Source: Philip M. Parker, Professor, INSEAD, copyright 2007 www.icongrouponline.com
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4 4.1
MACRO-ACCESSIBILITY IN BULGARIA EXECUTIVE SUMMARY
Bulgaria’s commercial climate offers political stability, strong economic growth, a highly qualified work force, strategic location and low costs. Although it has been a long time and sometimes painful process, Bulgaria is successfully transforming itself into a market economy. While the domestic market is relatively small, Bulgaria is an excellent launching pad for sales into the European Union, Russia, Turkey and the Middle East. The general attitude in Bulgaria is pro-American and the Bulgarian market is very receptive to American goods and services. The government is also committed to a conservative fiscal policy. As a result, the country has enjoyed low inflation, a consolidated budget deficit below 1.0 percent, declining external debt and stable foreign exchange. The government has also cut personal income tax rates and corporate profit taxes, and abolished taxation on the capital profits in the bond and securities trade. The Bulgarian market has moved away from its traditional trade relations with Russia and become more oriented towards the EU, the Unites States, Turkey and the Middle East. The EU countries are now Bulgaria’s main export destination (56%) and a major source of foreign direct investment (67%). The Association Agreement between Bulgaria and the EU, a prelude to eventual EU membership, enables most goods to move between these two parties at zero or close to zero tariffs. This can be a great advantage to U.S. companies with production facilities in Bulgaria intended for export into the EU. However, it also a disadvantage for U.S. exporters with European competitors in the Bulgarian market. U.S. products only receive Most Favored Nation tariff rates, which are almost always higher than the tariffs applicable to EU products. Bank privatizations and increased competition between the newly private banks has dramatically increased access to credit for small and medium enterprises. Nonetheless, international financing of major infrastructure projects remains essential, and Bulgaria is still very dependent on financing from multilateral banks and other non-Bulgarian sources. Financing from the Export-Import Bank of the United States (Eximbank) is now available to finance certain U.S. exports to both state-owned and private Bulgarian enterprises. The Overseas Private Investment Corporation (OPIC) is also interested in financing projects in Bulgaria. While the commercial climate is, in general, very positive, there still are factors that inhibit U.S.-Bulgarian trade and investment. Persistent high unemployment and low wages limit consumer purchasing power. An ineffective judicial system and an inadequate rule of law environment have had a negative impact on business activities. Government bureaucracy is improving, but it can still present frustrating delays and unreasonable burdens on investors and exporters. However, despite these issues, Bulgarians are eager to have greater access to American goods and services and there are excellent opportunities for those companies willing to enter and develop this expanding market.
4.2 4.2.1
POLITICAL RISKS Economic Relationship with the United States
Since the fall of Communism at the end of 1989, numerous bilateral agreements have been signed between Bulgaria and the United States. In the areas of aviation and defense these include the Civil Aviation Security Agreement of 1991, an agreement by the United States International Military Education and Training (IMET) Program (1992), and a Memorandum of Cooperation on Defense and Military Relations (1994).
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Agreements on postal matters include a Memorandum of Understanding on the INTELPOST service (1990) and the International Express Mail Agreement (1991). Other trade-related agreements include a 1993 agreement on trade in textiles and textile products, the Investment Incentive Agreement (1991). On February 1, 1999, a bilateral Memorandum of Understanding came into force providing for tax-free treatment of U. S. Government assistance.
4.2.2
The Political System
Following the removal of long time communist leader Todor Zhivkov in 1989, Bulgaria has been a parliamentary republic ruled by a democratically elected government. A new constitution was enacted in 1991, which lays out the basic rights and obligations of citizens and is the basis for Bulgaria’s legal system. The constitution guarantees freedom of association including the right to form political parties. The constitution provides for the separation of powers amongst the executive, judicial and legislative branches and a system of checks and balances. The President is the head of state. The presidency is empowered to conclude international treaties and to schedule parliamentary (or National Assembly) elections. The President is also the commander-in-chief of the armed forces. The National Assembly is a unicameral legislative body that consists of 240 members who are elected for a term of four years. Failure to follow through on reform measures through most of the 1990’s led to the rapid downward spin of the economy which in turn seriously affected the living standards of all Bulgarians. Between 1989 and 1997 there were eight governments in Bulgaria. By giving local groups without management ability priority in the privatization process and access to questionable loans, this cronyism spread weakness throughout the economy causing the banking system to nearly collapse in May 1996. The BSP-led government’s slow progress in implementing reforms and mishandling of the economy led to a host of financial, social and economic problems which reached crisis level in late 1996. In February 1997, after several weeks of escalating public protests televised worldwide over the government’s handling of the economy, the government agreed to step down and was replaced by a caretaker government that moved quickly to stabilize the economy in March 1997 by concluding a $510 million standby arrangement with the IMF to help pull the country out of crisis. In April 1997, a reform-minded coalition headed by Union of Democratic Forces (UDF) won an absolute majority in parliamentary elections.
4.3 4.3.1
MARKETING STRATEGIES Creating a Sales Office
Businesses may establish a representative office for information gathering activities. A representative office is not viewed as a legal entity in Bulgaria. Certain restrictions are placed on the office’s activities. The Commercial Code and the Foreign Investment Law define the various forms of economic associations and regulate their foundation, organization, and termination. While it is possible to register a branch of a foreign entity in Bulgaria, the most common type of organization for foreign investors is a limited liability company (OOD). The procedure for establishing a company in Bulgaria requires registration with the local district court. Registration documents generally include: •
Application
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•
Certificate of Incorporation of the parent company
•
By-laws of the parent company
•
Minutes of a meeting of the parent company at which the resolution for establishment of a subsidiary in Bulgaria is passed
•
A founding act (by-laws) of the Bulgarian subsidiary
•
A letter, issued by the Statistics Institute, confirming the uniqueness of the name of the Bulgarian subsidiary in the district covered by the respective registration court.
•
Specimens of the signatures of the manager
•
Declaration of the management
•
Bank receipt attesting to authorized capital on deposit in a Bulgarian bank
•
Receipt of paid state fees for registration and publication in the State Gazette.
As of May 2001, the Hague Convention Abolishing the Requirement of Legalization for Foreign Public Document has been applied in Bulgaria. Therefore, legalization is no longer necessary. However, in order to be certified in Bulgaria, foreign public documents must be translated and bear an Apostille. The subsequent registrations with the Statistics Institute, the Social Security Institute and the tax authorities should be completed as follows: •
Statistics Institute - within three days as of receiving the court decision for the registration of the company
•
Tax authorities - within fourteen days as of receiving the court decision for the registration of the company
•
Social Security Institute - there is no statutory term for this registration
Registration with the Bulgarian Chamber of Commerce and Industry (BCCI) is optional, but useful, since BCCI issues certificates-of-origin for products. VAT registration is done separately from the general tax registration, and is subject to a number of conditions such as VAT taxable turnover equal to or exceeding BGN 50,000 (fifty thousand). Under the latest amendments of the Law on VAT (effective July 1, 2002), within fifteen days of receiving the VAT registration certificate a company must open a VAT account (i.e. a bank account) under the control of the tax authorities. This account should be used for receiving and paying the VAT amounts payable to or by the company. The VAT account may not be used for payment of or as a security for any other obligations apart from the ones stipulated in the Law on VAT. Similar registration procedures as well as other statutory requirements apply to establishing other legal entities such as joint stock companies (ADs), general partnerships (SDs) and limited partnerships (KDs).
4.3.2
Creating a Joint Venture
There are several laws that govern joint ventures with foreign participation, including the Law on Foreign Investment (hereinafter referred to as the Foreign Investment Law), and the Commercial Code. Joint ventures with state-owned companies (i.e., wholly owned by the Bulgarian State) must be approved by the Council of Ministers or by the relevant minister, as the case may be. The “Regulations for the Regime of Exercising the State’s Rights in Commercial Companies with State Equity Participation”, promulgated in June 2003, provides the authority for the Council of Ministers or for the respective ministers, as the case may be, with respect to exercising State’s rights over shares or stock in commercial companies. www.icongrouponline.com
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The negotiation phase usually addresses the evaluation of existing assets and contribution of the foreign partner. The foreign contribution can be in cash, capital in-kind and/or know-how. The contribution of the local partner is usually in long-term assets (i.e., existing equipment, facilities, etc.). Other usually discussed issues are: labor issues (employment guarantees), future business and marketing plans and management contracts. In kind contributions to the capital of an OOD, AD or a company limited by shares (KDA) are always subject to evaluation by three court appointed experts, regardless of whether such a contribution is made at the establishment of the company, or in view of a subsequent increase of the company’s capital. No evaluation by experts is required In the event of monetary contribution to the capital of the company. Joint ventures with private companies do not follow the same procedures. No government involvement or approval is necessary. After completion of negotiations, the entity must be registered with the relevant court provided that the joint venture company assumes the legal form of a commercial company. If a new legal entity is created, an evaluation of the assets must be performed by a three court-appointed experts provided that any of the participants in the joint venture company makes in-kind contribution against acquisition of share capital. If the party that makes the in-kind contribution is not satisfied with the experts’ evaluation, such a party is entitled to participate in the joint venture company with cash contribution. The most successful American joint venture in Bulgaria has been the one formed by American Standard and the Bulgarian Vidima Ideal. American Standard has since bought out its Bulgarian partner and built its biggest factory in the world, which exports bathroom fixtures throughout Europe.
4.3.3
Agents and Distributors
U.S. exporters, especially small and medium size enterprises, will most likely choose to enter the Bulgarian market through an agent or distributor. This is because the small size of the Bulgarian market, distance and language differences will make it unattractive to set up a branch or subsidiary at the outset. Even some well-known large American companies are currently represented in Bulgaria by an agent for these reasons. In considering a potential agent or distributor, common sense prevails: a U.S. company should not automatically sign up the first Bulgarian company that contacts them, and a due diligence background check of a potential business partner, plus frequent visits by the export sales manager, are essential.
4.3.4
Hiring Local Counsel
Bulgarian law stipulates that representation in court and before administrative agencies must be performed by a duly licensed member of the Bulgarian Bar Association, who are independent practitioners in law firms or who are certain employees of corporations. Bulgaria does not allow foreign lawyers to practice in Bulgarian courts, except in criminal cases while accompanied by a Bulgarian lawyer, on a reciprocal basis by agreement with the other country. In the case of a corporation, representation may be either by an authorized senior executive of the firm such as executive director, or by an employee who has passed the practical examination of the Ministry of Justice and who has a power of attorney from the corporation to represent it as “in-house counsel.” A Bulgarian patent representative who specializes in intellectual property rights and who is admitted to practice before the Bulgarian Patent Office is also essential for preparing documents to protect intellectual property rights. Some lawyers are patent representatives. Other services such as filing of corporate documents with the courts, legal opinions, and legal consultations, are in practice performed by self-styled “legal consultants,” whose qualifications and experience may vary widely as the
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field is entirely unregulated. Some legal consultants may be former in-house counsel. Attorneys who are members of the Bulgarian Bar Association also provide such services. Many Bulgarian law firms have already established relationships and associations with foreign law firms, including American affiliates. Additionally, some of the larger international accounting and consultancy firms have established legal departments which perform some of the services offered by a law firm. A foreign counsel may be used to review documents and to provide general advice as to joint venture or privatization negotiations.
4.3.5
Checking Bona Fides
There is only one internationally recognized credit reporting agencies in Bulgaria, Credit Reform Bulgaria, headquartered in Germany, although there are new companies that have advertised their ability to check corporate references and provide corporate financial data.
4.3.6
Distribution Channel Options
Retailing Bulgaria’s retail sector is dominated by small-scale shops. With the privatization of the state-owned shops and newmarket-entry following the end of Communism in 1989, the predominant part of retail trade is already in private hands. Shop owners are quickly gathering experience in modern marketing and sales promotion. Nearly 100 percent of the food sales are handled by private shops and vendors. Fruits and vegetables are typically sold at open-air, nonrefrigerated public markets. Bulgaria’s first modern retailer, Stambouli, a Cyprus-based company. began operating dollar stores in Bulgaria in 1984. In the early 1990’s, they introduced the first modern general retail stores in Bulgaria, the nationwide Bonjour chain. Local supermarket and food stores such as Oazis, Elemak and Fantastiko were the first modern supermarkets selling both Bulgarian and imported food products. Currently, large foreign food market chains such as Billa (Germany/Austria), Ramstore (Turkey) and others have entered the market. All of these stores utilize contemporary shelving displays, refrigeration display, and even point-of-sale promotions. Except for their relatively small size, these stores increasingly resemble mid-range supermarkets in the United States. A rapidly growing group of retailers include the nationwide networks of gasoline stations operated by Shell, OMV and Lukoil. These offer simple automotive service repairs, car wash, minimarkets, and in many cases, food service operators such as McDonalds or Happy restaurants. Big changes to Bulgaria’s retailing structure started in 1999, when the German firm METRO, the second-largest retailer in the world after Walmart, opened its first cash-and-carry membership store in Sofia. METRO carries a wide variety of direct-imported consumer items, including many U.S. brands. METRO has expanded throughout Bulgaria, and its entry into the market has been followed by the Greek consumer goods chain store Ena, the German/Austrian Billa, the UK franchiser of Picadilly supermarkets chain, the Turkish Ramstore and the French do-it-yourself supermarkets chain Mr. Bricolage. Larger cities outside Sofia have one or two stores on the scale of a department store, although many of these are now out of business. These stores typically retail nonperishable consumer products such as household appliances, furniture, apparel, personal care/hygiene items, and consumer electronics.
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While Bulgaria does not have shopping malls, there are increasing numbers of shopping streets, shopping arcades and co-located stores. Recent examples of this trend in Sofia are the renovated TSUM, formerly a department store, now several floors of fashionable shops; the Centralni Hali, formerly a vegetable market, now two floors of a wide variety of food and clothing shops, plus a food court; and Vitosha Boulevard, Graf Ignatiev Street, Solunska Street and the renovated Pirotska Street, all of which have many fashionable shops. Regional cities typically have a pedestrian-only shopping area in the center of the city. Consumer-oriented trade shows and seasonal bazaars are an important part of the retail scene. The Christmas Bazaar at the National Palace of Culture in Sofia lasts almost two months and features hundreds of booths--actually small shops--on six floors of the complex, turning it into a temporary shopping mall, packed with consumers. Frequent sector-specific bazaars such as food shows and consumer electronics shows do a big business as well.
Wholesaling While each product sector has its own distribution channels, overall the transformation of the industrial products and raw material market segments is much slower paced. Bulgaria’s wholesale sector is characterized by fragmentary development. Previously, wholesaling of Bulgarian products was handled by manufacturers who distributed products directly to retailers, and imports were handled by large state-owned enterprises. Some wholesale operations were established in the consumer sector. Now the wholesaling sector is increasingly composed of private companies. An example is the Ilientsi warehouse and storage facility located in Sofia’s northwest industrial zone. Food and nonfood retailers throughout the country purchase substantial quantities through Ilientsi. Many wholesalers focus on the distribution of imported products. Trade liberalization encouraged many new companies to enter trading activities. An array of companies has entered the market and expanded distribution and services. The introduction of marketing concepts and information technologies is not only accelerating but is facilitating the transformation.
4.3.7
Franchising Activities
Unknown in Bulgaria in 1989, franchising has spread to ten industry sectors in Bulgaria. The first franchise operations were little more than stores or distribution licenses for trademarked products. From the bottling of PepsiCola, the establishment of KFC Chicken, Pizza Hut, Dunkin Donut shops and Office 1 Superstore, and stores featuring well-known European clothing brands, over the past several years franchising have also appeared in the executive recruiting and other services fields. The Bulgarian retail market is now ready for the many products and services that are typically marketed and sold in foreign-based franchise stores. Bulgarian consumers are looking for retailers that can provide a consistent selection of quality products, reasonable prices and good service. An important study has shown that profitable sectors with a relatively fast return of investment are tourism, the food industry, construction, and services. Potential in the service and food sectors include printing/photocopying, automotive product retailing and car rental, laundry and dry cleaning, hardware and retail stores, baked foods, candy and snacks, business aid & services, fast foods, head hunters and hotels & motels. The best opportunities are in the big cities (Sofia, Varna, Plovdiv, Burgas) where the population has a relatively high level of disposable income. Best prospect sectors for U.S. franchisers include automotive products and services; food - restaurants, hotel and motels; laundry and dry-cleaning; and employment services. Good opportunities exist in the following sectors: convenience stores; food -ice cream and yogurt; hardware stores; printing and photocopying services; specialty retail stores; commercial and residential cleaning. Other possibilities exist in the following sectors: equipment rental centers; eye care and optical center; food -baked foods, candy and snacks; and educational services. Despite franchising being a new concept for the Bulgarian business community, the Bulgarian legal system accommodates franchise agreements. Laws on labor relations are clearly spelled out, leases can be freely negotiated, and laws protect trademarks, patents and copyrights. www.icongrouponline.com
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The primary challenge in establishing franchises is obtaining sites. In urban areas, especially Sofia, it is sometimes difficult to locate and lease properties at an affordable cost. Difficulties in finding locations with clear titles also creates complications and delays in finding sites. Recently, some Bulgarian franchisers have entered the market: Policontact (employment services), Piccadilly (retail stores), Happy Bar & Grill (food restaurants), and Sanita (medicine distribution) started their business in Varna and so far they quite successful. The International Executive Service Corps (IESC), a U.S. Agency for International Development (USAID)-funded organization, works with Bulgarian companies, matching them with potential U.S. franchise owners. In addition, there is a Bulgarian Franchise Association.
4.3.8
Direct Marketing Options
Direct marketing is relatively new to Bulgaria. There are few, if any Bulgarian mail-order catalogs. Vacuum cleaners and cosmetics are being sold fairly successfully door-to-door. Companies employ different marketing techniques. An Austrian company is currently using television home shopping “infomercials” to sell kitchen tools and appliances not available in local shops. Home demonstrations are not popular and have generated little success. Avon and the Swedish company Oriflame report success in the direct sale of cosmetics. Limitations to expansion of telemarketing are poor telephone service in rural areas (not everyone has a telephone) and unreliable mail deliveries. There are also no toll-free telephone services offered by BTC. For the time being, direct marketing techniques may have more relevance to larger urban areas. According to industry professionals, the population of smaller towns is suspicious of direct marketing to end-users. In less populated areas where contact between people is infrequent, door-to-door selling is viewed as a way to socialize. Direct marketing through catalogs, telemarketing and the Internet from the United States to Bulgaria is still quite difficult. Few Bulgarians have credit cards, and with residual lack of confidence in the banking system and undeveloped banking infrastructure, debit cards are just now coming into popularity. Together with the low purchasing power, the high cost of shipping and lack of security for parcels and mail at most homes, catalog shopping and Internet shopping from the United States is in its infancy.
4.3.9
Selling Strategies
Bulgarian consumers and companies have low purchasing power, which means that price is a major consideration in developing a market strategy. While some customers may prefer to “buy Bulgarian,” frequently there is no Bulgarian manufacturer or it is recognized that the Bulgarian supplier does not have the capacity or the quality of product to meet the customers’ needs. So frequently the contest is among American, European and Asian suppliers. American companies are widely recognized for their quality and reasonable price, and value sells well in Bulgaria. Market statistics are essential to choosing specific marketing strategies, but the Bulgarian market can be complex and difficult to gauge. Market size statistics are almost nonexistent. Available statistics are usually unreliable and do not assist in accurately predicting market responses. While low official disposable income statistics might initially discourage market entry, the size of the unofficial economy and inferences from observing actual sales activity paints a brighter picture. First-hand observation on the streets and in the shops is essential for gauging the amount of actual economic activity in Bulgaria. Selling to state-owned companies, like selling to the government anywhere, has its own advantages and difficulties. As Bulgaria privatizes, American companies are advised to focus on the private sector. The growth of the private
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sector augers well for foreign businesses that are accustomed to selling products based on price, product quality and after-sales service. In the private segment of the economy, marketing techniques will not vary greatly from other foreign countries. Some techniques for developing greater product awareness include developing close relationships with professionals and non-profit organizations, as in the pharmaceutical, health care and medical equipment sectors, sponsoring research, participating in trade shows and events, and placing advertisements or writing articles in professional journals. Some companies have chosen sponsorship of game shows or events.
4.3.10
Product Pricing
Importers typically mark-up prices 50 percent to wholesalers, who then mark-up their goods another 100 percent. Thus the end price to the consumer can be as much as 300 percent the import price. However, there are great variations, depending on the product, and prices of many goods are 25 percent less than prices in the United States and the European Union. Price supports and state subsidies are being stripped away. The 1997 amendment to the Regulation for Implementing the Law on Prices substantially decreased the number of items subject to limited price control. The products affected are primarily basic necessities. All other prices are directly negotiated between the manufacturer and the distributor. Price competition is becoming more intensive. Realignment of prices has already occurred in many instances. Consumer demand is price elastic in Bulgaria. Due to low per capita income and purchasing power, consumers are highly price sensitive. However, consumers are willing to spend more in return for higher quality. Most people have generally restricted their purchasing to basic necessities. Imported products are typically higher priced than locally produced goods. Pent-up demand for goods not previously available is responsible for some sustained demand for imports. Despite the disparities in purchasing power, a number of imported products in Bulgaria are actually more expensive than the same or similar products sold in stores in the United States. U.S. manufacturers considering export to Bulgaria should look closely at ways to cut transportation and distribution costs for selling to Bulgaria so that Bulgarian customers can benefit from the wide variety and attractive prices of American products.
4.3.11
Licensing Options
Since Bulgarian companies do not have ready access to good financing, it might be difficult for a U.S. company to find a Bulgarian company able to invest large sums to acquire a production license or new manufacturing capability for an American product. However, enterprises with existing and suitable manufacturing capacity and good markets might be eager to take on the manufacturing of an American product. This might be a good market strategy for a U.S. company with high labor costs and product prices that are too high for Bulgarian customers. Production for Bulgaria’s market in Bulgaria, with its low labor costs, might enable market entry. Caution is advised, however, as in any transfer of technology. The Law on Obligations and Contracts and the Commercial Code sets forth the rules for making a licensing contract.
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Advertising and Trade Promotion
Advertising Options Advertising is quickly becoming a key marketing tool in Bulgaria. Today, nearly all companies in Bulgaria engage in some form of advertising. The following advertising media are preferred by Bulgarian companies (in descending order): printed media, both newspapers and magazines, radio, outdoor billboards/signs, event sponsorship, trade shows, sales promotion literature, and last, television. Television is becoming more and more important but the price of commercial airtime is simultaneously rising. While it is more than affordable for foreign companies, it is still expensive for many Bulgarian companies. Because of the cost, the leading users of television advertising are mainly foreign-affiliated companies, especially those specializing in consumer products. It may be necessary for a U.S. supplier to assist their Bulgarian agent or distributor in coping with the cost of television commercials. Advertising is regulated by the 1998 Law on the Protection of Competition. This law prohibits advertisements, which disseminate misleading information to consumers or malign the reputation of competitors. Separate legislation regulates advertising for specific products. Article 35 of the Law on Tobacco and Tobacco Products explicitly prohibits any advertising of tobacco products with the exception of point-of-sale promotions. This provision appears not to be enforced, given ubiquitous advertising of cigarettes in all the media. The Pharmaceutical Law prohibits the marketing and advertising of pharmaceuticals that are not registered in Bulgaria. Advertising content for registered pharmaceuticals must be pre-approved by the Executive Agency on Pharmaceutical Products (the registration authority). There are about thirty companies that provide a full range of professional advertising services. These companies have formed an advertising association, and there is at least one other association comprised of smaller companies. These companies have tried to influence the media to pay attention to international advertising norms and ethics. These firms persuaded the television stations to broadcast cigarette commercials only after 10 p.m. instead of during prime TV viewing hours when minors are watching. These companies are also in regular contact with the Parliamentary Committee on Television and Radio, which is charged with proposing new regulatory legislation. The Government of Bulgaria recognizes that the country does not advertise itself effectively as a tourist destination abroad. The budget for a national advertising campaign have been limited. However, the government intends to establish an Agency for National Information and Advertising to coordinate national advertising campaigns.
Daily Newspapers 24 Hours 47, Tsarigradsko Chausse Boulevard 1504 Sofia Phone: (359)(2) 942-2514 Fax: (359)(2) 942-2819 Banker 5B, Tsvetna Gradina St. 1421 Sofia Phone: (359 2) 658-305; 963-0585 Fax: (359 2) 963-0624; 963-2028 E-mail:
[email protected] Web site: www.banker.bg Capital P.O. Box 198 www.icongrouponline.com
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20 Ivan Vazov Street, floor 3 1000 Sofia Phone: (359)(2) 981-5816 Fax: (359)(2) 980-9439 E-mail:
[email protected] Web site: www.capital.bg Pari 47A, Tsarigradsko Chausse Boulevard 1504 Sofia Phone: (359)(2) 943-3147 Fax:(359)(2) 943-3188 E-mail:
[email protected] Web site: www.pari.bg Standart 113A, Tsarigradsko Chausse Boulevard IPK Rodina 1113 Sofia Phone: (359)(2) 974-3142, 91-975 (477; 482) Fax: (359)(2) 76-2877 E-mail:
[email protected] Web site: www.standartnews.com Trud (Labor Daily) 119, Ekzarh Yosif St. 1000 Sofia Phone: (359)(2) 921-4142, 921-4143, 921-4144 Fax: (359)(2) 921-4226 E-mail:
[email protected]
Weekly Journals 168 Hours 47, Tsarigradsko Chausse Boulevard 1504 Sofia Phone: (359)(2) 942-2732, 942-2731, 942-2735 Fax: (359)(2) 942-2824 E-mail:
[email protected] Bulgarian Business News (English Edition) 47, Tsarigradsko Chausse Boulevard 1504 Sofia Phone: (359)(2) 943-3058 Fax: (359)(2) 433-9249 E-mail:
[email protected] Bulgarian Economic Outlook (English Edition) 49, Tsarigradsko Chausse Boulevard 1124 Sofia Phone: (359)(2) 926-2215, 926-2340 www.icongrouponline.com
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Fax: (359)(2) 986-2289 e-mail:
[email protected];
[email protected] Web site: www.bta.bg The Sofia Echo (published in English) Sofia Echo Media Ltd. 9A San Stefano Street, 3d Fl. 1504 Sofia Phone: (359)(2) 944-1426, 435-011, 464-097 Fax: (359)(2) 944-3937 E-mail:
[email protected] Web site: www.sofiaecho.com
4.3.13
Trade Promotion
In January 1999, Bulgaria acceded to CEFTA. The country is also a member of the Balkan Regional Center for Trade Promotion. Bulgaria is conducting negotiations for liberalization of mutual trade with all neighboring states and has concluded trade agreements with most Mediterranean countries. Bulgaria has a number of industry specific trade shows. Many U.S. products are displayed through agents, distributors and dealers. These shows offer a very good opportunity for U.S. companies to gain market exposure and expand distribution in Bulgaria. Supplying Bulgarian retailers, particularly outside of Sofia, may need assistance in designing point-of-sale promotions. Foreign companies may have to advise their agents and distributors how to educate retailers on shelving displays, product location, promotional campaigns and promotional literature. Bulgarian consumers expect good after-sales service and customer support when purchasing products. New private companies understand the importance of customer support and follow through on promises. Companies expect support from the U.S. exporter when purchasing imported products. Given that prices are generally higher and their limited budgets are already stretched, service and support by their suppliers are mandatory in their view. Emphasis on customer support is an initial step in developing customer loyalty. Most American companies operating in Bulgaria provide training to their distributors/agents. In many cases, agents and distributors are trained in the United States in order to communicate the firm’s distinctive corporate policies, behavior and standards.
4.3.14
Government Procurement
Within the context of the Bulgaria’s accession to the EC, the public procurement law has been substantially revised to comply with EC rules and practices. The list of public procurement assignees has been increased by adding the state and municipal hospitals, the National Insurance Institute, The National Health Insurance Fund and the Bulgarian Embassies abroad.
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The requirement that only a trading company can receive an order through public procurement has been changed and now companies who are involved in scientific-research activity or other types of activities can also participate. A new procedure for delivery of goods, traded on the stock exchange also has been implemented. There is a differentiation between the guarantee for participation in a tender procedure and the guarantee for fulfillment of a contract for public procurement. The guarantee for participation cannot be more than 5% of the value of the order and the guarantee for the fulfillment of the contract cannot be more that 10% of the contract value. In order to make the criteria for evaluation of the proposals clearer, the assigning organizations/companies have to include in the tender documents the methodology for evaluation of the proposals. According to the complaint system set up by the Procurement Law complaints by a contractor may be field to the procuring entity concerned, provided that this action is taken within seven days of the announcement of the award of contract. Selling to state-owned companies can be even more difficult than selling to private companies. Selling to stateowned companies and other state entities still depends on cultivating relationships. Many foreign companies complain that state-owned company officials may request some form of kick-back or bribe which American companies may not offer, pursuant to the U.S. Foreign Corrupt Practices Act. Public procurement financed by international financial institutions such as the EBRD or World Bank offers the best opportunity for transparent purchasing decisions based on price and other competitive factors. Pursuant to the loan guidelines, tenders must be open and transparent. Results of the tender evaluation process are subject to the review and final approval of the financing institution. In general, the Bulgarian public procurement system meets the EU requirements. Substantial work has been undertaken to enhance the national procurement system. These efforts have streamlined enforcement of the law, strengthened the powers of the procurement staff and introduced control and monitor procurement procedures. Bulgaria purchases around $860 million in goods and services annually. Public procurement opportunities are published on the Web site of the Council of Ministers of the Republic of Bulgaria: http://www1.government.bg/rop.
4.4
IMPORT AND EXPORT REGULATION RISKS
Bulgaria became a member of the World Trade Organization in December 1996.
4.4.1
Adherence to Free Trade Agreements
In March 1993, Bulgaria signed an Association Agreement with the European Union under which the EU and Bulgaria will eliminate tariffs asymmetrically with the EU reducing tariffs at an accelerated rate. Agricultural concessions are applied on a reciprocal basis. The Europe Agreement is also calling for the harmonization of Bulgaria’s laws and institutions with those of the European Union in preparation for eventual full membership.
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In July 1993, Bulgaria joined the European Free Trade Agreement (EFTA). The provisions of the EFTA Agreement mirror those of Bulgaria’s Association Agreement with the European Union. Since then, the majority of EFTA member countries have opted to join the EU. Bulgaria joined the World Trade Organizations in December 1996 and the Central European Free Trade Agreement (CEFTA) in January 1999. A free trade agreement between Bulgaria and Turkey took effect in January 1999. Bulgaria has signed and enforced Free Trade Agreements with: Turkey FYROM Estonia Lithuania Israel Croatia
Enforced in 1999 Signed in 1999 Enforced in 2002 Enforced in 2002 Enforced in 2002 Enforced in 2002
The U.S.-Bulgaria bilateral trade (BIT) agreement, in place since 1991, provides mutual most-favored-nation (MFN) status. In order to prevent this agreement from conflicting with any conditions required by Bulgaria’s entry into the EU, negotiations are underway to revise this agreement. The United States gave Bulgaria unconditional MFN treatment in October 1996.
4.4.2
Trade Barrier Risks
Tariff Barriers Products imported from the European Union with a Form EUR 1 certificate are subject to reduced customs duties or exempt entirely in accordance with Bulgaria’s European Union association agreement. In contrast, U.S. products only receive Most Favored Nation customs tariff rates, which are almost always higher than tariffs applicable to EU products. This has placed some dutiable U.S. products at a comparative disadvantage. U.S. Government policy is to urge Bulgaria to reduce its tariffs for non-EU products. One benchmark for reduction would be the level of the European Union’s Common External Tariff, which in almost all cases is lower than Bulgaria’s tariffs. Customs duties on agricultural goods and inputs and distilled spirits are also of concern to U.S. exporters. Preferential treatment applies to some tobacco varieties, mainly for those imported from Argentina, Brazil, India and Zimbabwe.
Non-Tariff Barriers Bulgaria’s non-tariff barriers are described in the annual National Trade Estimate report issued by the Office of the U.S. Trade Representative each March 31. U.S. exports to Bulgaria are hampered by the Pan-European cumulation system, particularly the removal of the availability of customs duty drawback on products originating in the United States and other non-participants in the cumulation system. Under this recently introduced system, customs duties on U.S.-origin inputs, that are used in the production of goods subsequently exported under preferential trade agreements involving the EU, Bulgaria and other countries, are no longer refunded. In general, Bulgaria’s customs regulations and policies are often reported to be cumbersome, arbitrary and inconsistent. Other major concerns are irregular implementation of Bulgaria’s 1997 public procurement law and privatization procedures, and protection of U.S. intellectual property rights.
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Tariff Rates Bulgaria follows the Harmonized System (HS) adopted by the Customs Cooperation Council. Tariffs range between 5 percent and 40 percent on industrial products and 5 percent and 70 percent for agricultural products. Since 1998, average Bulgarian import tariffs have been reduced significantly at the beginning of each year. Tariffs in areas of concern to U.S. exporters - including poultry legs and other agricultural goods and distilled spirits - remain relatively high. Import duties are ad valorem for agricultural products; some products such as meat have minimum import duties in ECU per metric ton. Bulgaria’s tariff schedules consist of two columns of rates. The column 1 rate applies to the 118 countries that qualify for preferential duty rates. Column 2 is equivalent to Most-Favored Nation (MFN) status. Forty-two countries, including the United States, are subject to column 2. Approximately 80 percent by value of Bulgaria’s total imports receive column 2 treatment.
4.4.3
Restrictions on Imports
Bulgaria prohibits imports of ozone-depleting products, ivory, rare birds, and other internationally banned products.
4.4.4
Controls on Exports
Export Licensing A limited number of goods are subject to administrative control, stemming from Bulgaria’s compliance with international agreements and specific domestic legislation. Registration (automatic license) and permits (administrative license) required by some commodity groups for export are issued by the Ministry of Economy. Permits are required for export of gold, silver, platinum, opiates, nuclear materials, explosives, arms, endangered species of animals and plants, and some herbicides. Registration of export of five commodities including kerosene and diesel oil is required. Only licensed dealers may export weapons. Bulgaria maintains quotas on the export of textiles and apparel to Canada and the United States; permits for export in these cases are required. Details about the annually established quotas, carryover and carry forward arrangements could be accessed through the Ministry of Economy Web site at www.mi.government.bg.
4.4.5
Trade in Arms and Dual-Use Goods and Technologies
Bulgarian Customs supervises control over the export, import, re-export and transit arms and dual-use goods and technologies. Bulgarian regulations follow the EU list of dual-use goods, which integrates the control lists of the Wassenaar Arrangement, missile technology control regime, nuclear suppliers group and the Australian group, and the Wassenaar arrangements munitions list. This list includes goods and technologies in the nuclear weapon, chemical and biological warfare and missile areas. A permit for each transaction (import, export and re-export) and transit with dual-use goods and arms issued by the Commission for Control and Permission for Foreign Transactions in Arms and Dual-use Goods and Technologies of the Ministry of Economy required regardless of destination. The requirements are as follows: Export:
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Bulgarian export control authorities require a completed export permit form, import license, end-user certificate with non-re-export clause issued by the competent authorities of the country of end-user, and end-use and end-user statement for each export. The applicant is obliged to provide a certificate verifying the actual delivery of equivalent document by the end-user confirming customs clearance of goods within 3 months after the date of entry.
Re-Export In addition to the requirements for export, a permit for re-export by the competent bodies of the state of initial supplier is required.
Import The applicant is obliged to submit a completed import permit form, and in case of dual-use goods, an end-use and end-user statement and delivery verification certificate after the customs clearance of goods is also required.
Transit Transportation Transit of goods such as arms or radioactive, explosive, inflammable, oxidizing, toxic, infectious or corrosive substances, require a transit permit. A completed form shall be presented by the shipper or an authorized party to the Commission no later than 15 days before the entry of goods into Bulgaria. Transit transportation of other dual-use goods requires a transit statement, which must be presented to Customs upon entry into and exit from Bulgaria. More information on dual use and arms export control is available from the following departments at the Ministry of Economy: •
Dual-use Goods Export Control: phone/fax: (359) (2) 987-0549
•
Arms Export Control: phone/fax (359) (2) 989-6794
Customs officials may make on-the-spot checks of goods being exported to ensure compliance with applicable regulations.
4.4.6
U.S. Exports of Sensitive Technology to Bulgaria
U.S. exporters should consult the U.S. Department of Commerce, Bureau of Export Administration, for specific export licensing requirements concerning exports of sensitive high-technology products to Bulgaria.
4.4.7
Import Tariffs and License Requirements
There are no import taxes. However, all imports are subject to a 20 percent Value Added Tax (VAT) levied at the time of customs clearance. Some commodities are also subject to excise duties. The U.S. Embassy has had no complaints on record from U.S. exporters that Bulgaria’s import license regime has negatively affected U.S. exports. Bulgaria’s import licensing regime is subject to frequent change.
Registration The list of goods subject to registration is changed quite often. In principle, the purpose of registration is to monitor the movement of some “sensitive” goods such as textiles and metals (subject to export registration), or of food products which have been in short supply on the domestic market for a certain period: some types of meat, dairy www.icongrouponline.com
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products, sunflower and vegetable oils. These products will receive an automatic license within one day of receipt of application in the Ministry of Trade and Tourism and Ministry of Agriculture. Applicants are required to present a certificate from the court in which their incorporation was registered and a certificate of tax registration. Other substantiating documentation may be required: a contract, pro forma invoice, order, tax number, certificate of origin, veterinary certificate and/or a certificate of quality. Additional and detailed information could be accessed through the Web site of the Ministry of Economy at www.mi.government.bg/trade/polit.html.
Authorizations (Licenses) Decree Number 307 and Decree 233 stipulate the foreign trade regime of Republic of Bulgaria. Certain products must receive authorization prior to importation. This is a non-automatic licensing process. Authorization, in the form of an import license, is normally issued within two days of the Ministry’s receipt of the application. Applicants are required to present certificates from the court and tax registrations as well as supporting documents. Imports of pharmaceuticals also require a copy of the license for wholesale trade. Appeals following the Ministry of Economy denial of a license must be made in writing to the Minister of Economy within five days after the issuance of the decision. The Minister is required to render a final opinion within five days of receipt of the appeal.
Import Quotas Several decrees state that certain goods are subject to quotas where the tariff is reduced or waived completely. The sizes of the quotas are determined by calendar year. Quota allocations are distributed by the Ministry of Trade and Tourism through a tendering process or auction. No single applicant may receive a quota allocation larger than 35 percent of the total. Quota recipients may be required to place a deposit or a performance bond issued by a bank. Quota allocations are not transferable. Goods that are subject to duty-free or reduced tariff-rate-quota regimes require certified, simplified customs declarations for import, or a favorable resolution in writing from the principal ministry or department. Currently products subject to temporarily duty free quotas are insecticides and fungicides, paper and pulp, wheat and sunflower oil. Products subject to reduced duty quotas are beef, poultry, pork, milk and dairy products, some vegetables and vegetable seeds, barley, corn, rice, canned meat, crude sugar from sugar cane, confections, and some alcoholic beverages.
4.4.8
Customs Regulations and Contact Information
Bulgaria’s customs regulations are based on the 1998 Customs Act, which replaces the former 1960 Customs Act. The new Act generally corresponds to the provisions of the European Community Customs Code. Customs valuation is based on the transaction value - the price actually paid or payable for the goods when sold for export to Bulgaria, defined in Bulgarian levs. The dutiable value is CIF, consisting of the purchase price, transportation costs, insurance charges, commissions, royalties, license fees and all other expenditures associated with the transport (e.g., loading and unloading) for delivery to the Bulgarian border. Goods may be declared by a customs declaration, by designated simplified procedures such as a simplified customs declaration, a commercial or other document, or by entry in the records of the declarer, or by data-processing entry or other approved method. The customs authorities may carry out post-clearance examination of relevant documents or data.
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The law sets out procedures concerning transit, customs warehousing, inward processing, processing under customs control, temporary import, and outward processing. The law provides for public and private bonded warehouses. U.S. companies may direct inquiries to the following: General Customs Agency Director: Assen Assenov 1, Aksakov Street 1000 Sofia Phone: (359)(2) 9859-4443/98 591 Fax: (359)(2) 980-6897
4.4.9
Entering Temporary Imports
Products may be imported into Bulgaria on a temporary basis as long as they are not prohibited by law. The rules on temporary imports are contained in the Regulation for Application of the Law on Customs. Article 58 allows entry of samples and products for trade exhibitions. The term of entry cannot exceed six months although a request for extension can be made. Customs duties will not be levied if a letter of guarantee from a Bulgarian organization is presented vouching for eventual return of the goods or payment of duties. Bulgaria is a party to the Customs Convention on Carnet (ATA) for Temporary Import of Goods. Presentation of an ATA carnet, or TIR carnet, facilitates the process. An entry carnet may be obtained from a local chamber of commerce in the United States. Carnets are usually valid for 1 year and list the products to be imported on a dutyfree basis. The carnet must be presented upon entry into Bulgaria. Customs will stamp the carnet thereby validating it. Upon departure, the carnet must again be presented for validation, confirming that the product is being transported out of Bulgaria. Failure to re-export the goods results in application of the duties. The Regulations also provide for the temporary import of products and equipment. Article 15 lists 15 categories. For example, equipment for repairs, finishing, processing and testing may be imported temporarily duty-free. Any goods intended for re-export, such as textiles and apparel, may also enter duty-free. Article 51 establishes time limits from 3 months to one year for re-export. In practice, Customs requires a deposit equivalent to the assessed duties or a bank guarantee during the temporary import period.
4.4.10
Additional Trade Issues
Import Requirements The Regulations for the Application of the Law on Customs require a certificate of origin, commercial invoice, insurance invoice, bill of lading, and packing list for all imported and exported products. In some cases additional information may be required such as receipt of payment of customs processing fees, bill of health (depending upon products), and certificate of import/export (authorization or license). Agricultural products require a certificate of quality and origin, a veterinary or phyto-sanitary certificate, and other applicable health and safety certificates. If imports are sourced from the European Union, a movement certificate (Form EUR 1) is necessary if the products are to qualify for reduced duties (pursuant to the terms of the Association Agreement). Form EUR 2 should also be included if the shipment is valued below ECU 5,110. Products sourced from member countries of the European Free Trade Agreement (EFTA) -- Norway, Switzerland and Iceland -- require an exporter’s declaration in order to qualify for reduced tariff rates.
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Upon arrival, products for human consumption should be analyzed in approved local laboratories in cooperation with local authorities. The State Agency for Standards and Metrology strictly enforces Bulgarian quality standards, which do not always coincide with generally accepted international standards. Foreign certificates may or may not be considered adequate. After approval is issued, the commodities may be sold on the local market.
Local Standards The 1964 Law on Standardization and Metrology, as amended, together with the Regulation for Implementation of the Law, sets forth the legal requirements for product standards and quality control in Bulgaria. The State Agency for Standardization and Metrology is the designated authority for developing national standards. The Committee on Standardization reports to the Council of Ministers. In certain areas, product and sector-specific standards are issued by other ministries or agencies. The State Agency for Standardization and Metrology is the competent authority for testing and certification of all products except pharmaceuticals, food and telecommunications equipment. The Agency issues approvals attesting to electrical safety and functional characteristics. The Department for Certification and Management Quality Control, within the Committee, handles all testing and certification. In addition to the application, the Department requires a Bulgarian translation as well as certificate(s) of approval from the corresponding home testing authority and a certificate identifying the testing protocol. The fee levied for the testing and certification process is BGN 50-70 per application. The entire testing and certification process requires at least one month. Certificates are valid for two years. The State Agency for Standardization and Metrology shares responsibilities for food products with the Ministries of Agriculture and Health. The responsible authority for pharmaceuticals is the Bulgarian Drug Agency (for pharmaceutical products and implants) and/or Ministry of Healthcare (for medical equipment), which establishes standards and performs testing and certification and is also responsible for drug registration. Approval for any equipment interconnected to Bulgaria’s telecommunications network must be obtained from the State Telecommunications Commission.
4.4.11
Labeling Issues
The 1995 Law on Prices regulates labeling and marking requirements. Labels must contain the following information in Bulgarian: quality, quantity, ingredients, certification authorization number (if any), and manner of storage, transport, use or maintenance. The product must be clearly marked with the date of production, expiration date and the warranty period.
4.4.12
Warranty and Non-Warranty Repairs
When a product is sent out of Bulgaria for repairs, the value of the repaired or replacement part is dutiable.
4.4.13
Free Trade Zone Options
Duty Free Trade Zones (FTZ) were established in Bulgaria in 1987 under Decree No. 2242 “On The Duty Free Zones and its Regulations for Application.” The new Customs Act, whose provisions do not replace those of Decree No. 2242, renamed the six duty-free zones “free zones.” The Customs Act also states that goods located in the free zones and free warehouses are not considered as being in the customs duty of Bulgaria and are not subject to customs
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duty. Free zones must have access control at fixed entrance and exit points. New construction within the free zones is to be undertaken in conformity with the customs authorities. Foreign, including U.S., individuals and corporations, and Bulgarian companies with 1 percent or more foreign ownership may set up operations in a free zone. Thus foreign-owned firms have equal or better investment opportunity in the zones as compared to Bulgarian firms. There are at present six operational “free zones” in Bulgaria: Ruse and Vidin ports on the Danube, Plovdiv, Svilengrad (near the Turkish border), Dragoman (near the Yugoslav border), and Burgas port on the Black Sea. All of them are owned by joint stock companies or a state-owned company owned by the government of Bulgaria. The government provided land and infrastructure for each zone. Plovdiv, the only inland free zone, is the most profitable, with 24 investment projects. The Burgas FTZ has the largest warehousing and automotive distribution facilities in Bulgaria, and is used by more than 100 foreign and joint venture companies including Samsung and Daewoo. Limited manufacturing is conducted in both the Plovdiv and Ruse FTZs. All forms of production and trade activities and services may take place in the free zones. Foreign goods delivered to the free zones for production, storage, processing or re-export are VAT and duty exempt. Bulgarian goods may also be stored in free zones with permission from the customs authorities. Convertible foreign currency may be used, and revenues can be transferred abroad freely without any restrictions. Administrative procedures relieve the investor’s need to contact local authorities directly. Production and labor costs are low with well-trained and highly qualified labor available. All the zones are located on strategic trade rail, road and/or water trade routes. The free trade zones in Bulgaria have attracted a number of foreign investors to undertake processing and trade activities - Hyundai Co., Daewoo Co., KIA Motors, CITCO, Schwarzkopf, Henkel, Landmark Chemicals Ltd., Group Schneider, and BINDL Energie Systeme GmbH.
4.5 4.5.1
INVESTMENT CLIMATE Openness to Foreign Investment
Bulgaria has a liberal foreign investment law, and attracting foreign investment is one of the government’s top priorities. American investment is particularly welcome. The government is focusing on development of promising sectors of the economy, including energy, tourism, information technology, transportation and telecommunications, and agriculture. Bulgaria has enjoyed macro-economic stability since the introduction of a Currency Board arrangement in 1997. Unemployment remains high (around 15 percent) but is declining, and wages are still low (around 140 U.S. dollars per month on average). As a result there is considerable incentive to attract investment that will create good jobs. Many municipalities are prepared to grant concessions or other favorable treatment for significant investments. Bulgaria offers the combination of a well-educated workforce and low wages. The country is well situated in the center of the Balkan region, although transportation infrastructure requires extensive upgrades. The 1997 Law on Foreign Investment established the Foreign Investment Agency as the government’s coordinating body for foreign investment. The law extends national treatment to foreign investors, guarantees compensation in the event of expropriation, and allows the repatriation of profits. The law explicitly recognizes intellectual property and securities as a foreign investment.
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Common Forms of Investment
Foreign investment typically assumes one of the following forms: establishing a joint venture with existing companies, state-owned or private; acquiring a company through privatization; setting up a new (greenfield) venture; or making a portfolio investment. Portfolio investment has been minimal given the relative lack of development and inefficiencies of the capital markets. The most common type of organization for foreign investors is a limited liability company. Other forms are companies limited by shares (joint stock companies), joint enterprises, business associations, general partnerships, limited partnerships, and sole proprietorships. The 1991 Commercial Code, as amended, defines the various forms of economic associations and regulates their foundation, organization, and termination. While the Commercial Code regulates commercial and company law, the 1951 Law on Obligations and Contracts, as amended, regulates civil transactions. These laws are generally deemed adequate for commercial transactions. The law does not limit the extent or amount of foreign participation in companies. Foreign companies have the right to open deposit accounts in hard currency and Bulgarian leva (BGN). Foreign companies are permitted to engage in various forms of business activity including the acquisition of shares in companies, with some restrictions. Prospective U.S. investors should consult appropriate legal counsel for up-to-date legal information before signing any contracts. Local companies where foreign partners have controlling interests must obtain prior approval (licenses) to engage in certain activities: production and export of arms/ammunition; banking and insurance; exploration, development and exploitation of natural resources; and acquisition of property in certain geographic areas. Only firms with over 50 percent Bulgarian participation can be licensed for international trade in arms. The Law on the Special Purpose Investment Companies (SPIC Law), promulgated in the State Gazette on May 20, 2003, provides for two special types of public investment companies: for investments in real estate and for investments in receivables. A SPIC is a pool of assets (real estate or receivables) which are purchased with funds raised by the SPIC by means of publicly offered securities. Since the price of the SPIC securities will depend exclusively on the performance of its assets, the SPIC Law provides for considerable protections of the SPIC assets and their fair valuation. As a SPIC is viewed as a pass-through structure, at least 90 percent of its net income must be distributed to shareholders. The idea is that SPICs shall be exempt from corporate tax and only its shareholders shall be taxed on the dividends received. However, the tax laws are not yet amended to grant tax exemption of SPICs.
4.5.3
Barriers to Direct Investment
The problems most often cited by foreign investors in Bulgaria are: government bureaucracy; poor infrastructure; frequent changes in the legal framework; low domestic purchasing power; a banking system averse to lending; the protracted privatization process; and corruption. In addition, ineffective rule of law, especially in the judicial system, limits investor confidence in the ability of the courts to enforce contracts, ownership and shareholders rights, and intellectual property rights. There is also a perception that it is difficult to have judicial decisions enforced. The Foreign Investment Law removed most restrictions on acquisition of land by locally-registered companies with majority foreign participation. However, the constitutional prohibition against ownership of land by foreign individuals remains in force. This must eventually be changed to comply with European Union accession requirements.
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Privatization
The Privatization and Post-privatization Act of March 13, 2002, which repealed the 1992 Law on the Transformation and Privatization of State and Municipal-owned Enterprises, governs Bulgaria’s privatization process. Privatization of all state-owned companies is administered by the Privatization Agency (PA). The new law made all remaining state-owned enterprises (about 1,783 valued at 25 billion BGN) available for privatization, with the exception of 97 strategic enterprises such as Kozloduy Nuclear Power Plant and Bulgargaz, the natural gas distributor. Foreign companies, including state-owned foreign companies, may purchase Bulgarian state-owned firms, and the government has emphasized its openness to foreign capital. The 2002 Privatization law instituted a Post-privatization Control Agency under the authority of the Council of Ministers tasked to oversee the implementation of privatization contracts. In view of the GOB’s intention to preserve non-price privatization commitments (employee retention, technology transfer, environmental liability and investment) in the privatization selection criteria, this new body may create an extra burden for private businesses. With the new privatization legislation, creditors are no longer required to claim their receivables within six months from the start of the SOE privatization. While the government maintains that the six-month period had discriminated between creditors, the new policy may endanger the successful development of privatized companies and lead to lower privatization prices if the PA fails to make available all information concerning SOEs under privatization. On February 27, 2003, Parliament adopted amendments to the Privatization
