Renewable Energy Equipment and Services in Dominican Republic: A Strategic Reference, 2007
Edited by
Philip M. Parker, Ph.D. Eli Lilly Chair Professor of Innovation, Business and Society INSEAD (Fontainebleau & Singapore)
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About Icon Group International, Inc. Icon Group International, Inc.’s primary mission is to assist managers with their international information needs. U.S.-owned and operated, Icon Group has field offices in Paris, Hong Kong, and Lomé, Togo (West Africa). Created in 1994, Icon Group has published hundreds of multi-client databases, and global/regional market data, industry and country publications. Global/Regional Management Studies: Summarizing over 190 countries, management studies are generally organized into regional volumes and cover key management functions. The human resource series covers minimum wages, child labor, unionization and collective bargaining. The international law series covers media control and censorship, search and seizure, and trial justice and punishment. The diversity management series covers a variety of environmental context drivers that effect global operations. These include women’s rights, children’s rights, discrimination/racism, and religious forces and risks. Global strategic planning studies cover economic risk assessments, political risk assessments, foreign direct investment strategy, intellectual property strategy, and export strategies. Financial management studies cover taxes and tariffs. Global marketing studies focus on target segments (e.g. seniors, children, women) and strategic marketing planning. Country Studies: Often managers need an in-depth, yet broad and up-to-date understanding of a country’s strategic market potential and situation before the first field trip or investment proposal. There are over 190 country studies available. Each study consists of analysis, statistics, forecasts, and information of relevance to managers. The studies are continually updated to insure that the reports have the most relevant information available. In addition to raw information, the reports provide relevant analyses which put a more general perspective on a country (seen in the context of relative performance vis-à-vis benchmarks). Industry Studies: Companies are racing to become more international, if not global in their strategies. For over 2000 product/industry categories, these reports give the reader a concise summary of latent market forecasts, pro-forma financials, import competition profiles, contacts, key references and trends across 200 countries of the world. Some reports focus on a particular product and region (up to four regions per product), while others focus on a product within a particular country.
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Table of Contents 1
INTRODUCTION & METHODOLOGY.............................................................................1
1.1
What Does This Report Cover?
1
1.2
How to Strategically Evaluate Dominican Republic
1
1.3
Latent Demand and Accessibility in Dominican Republic
3
2 RENEWABLE ENERGY EQUIPMENT AND SERVICES IN DOMINICAN REPUBLIC .....................................................................................................................................5 2.1
Latent Demand and Accessibility: Background
5
2.2 Market Issues and Obstacles 5 2.2.1 Legal Framework ....................................................................................................................................... 5 2.3 Latent Demand: Leading Segments 6 2.3.1 Renewable Energy Assessments ................................................................................................................ 6
3 FINANCIAL INDICATORS: STEAM, GAS AND HYDRAULIC TURBINES AND TURBINE GENERATOR SET UNITS .....................................................................................10 3.1 Overview 10 3.1.1 Financial Returns and Gaps in Dominican Republic................................................................................ 11 3.1.2 Labor Productivity Gaps in Dominican Republic .................................................................................... 14 3.1.3 Limitations and Extensions ...................................................................................................................... 14 3.2 Financial Returns in Dominican Republic: Asset Structure Ratios 15 3.2.1 Overview .................................................................................................................................................. 15 3.2.2 Assets – Definitions of Terms .................................................................................................................. 15 3.2.3 Asset Structure: Outlook .......................................................................................................................... 17 3.2.4 Large Variances: Assets ........................................................................................................................... 18 3.2.5 Key Percentiles and Rankings .................................................................................................................. 21 3.3 Financial Returns in Dominican Republic: Liability Structure Ratios 36 3.3.1 Overview .................................................................................................................................................. 36 3.3.2 Liabilities and Equity – Definitions of Terms .......................................................................................... 36 3.3.3 Liability Structure: Outlook ..................................................................................................................... 38 3.3.4 Large Variances: Liabilities ..................................................................................................................... 39 3.3.5 Key Percentiles and Rankings .................................................................................................................. 42 3.4 Financial Returns in Dominican Republic: Income Structure Ratios 55 3.4.1 Overview .................................................................................................................................................. 55 3.4.2 Income Statements – Definitions of Terms .............................................................................................. 55 3.4.3 Income Structure: Outlook ....................................................................................................................... 57 3.4.4 Large Variances: Income.......................................................................................................................... 58 3.4.5 Key Percentiles and Rankings .................................................................................................................. 61 3.5 Financial Returns in Dominican Republic: Profitability Ratios 74 3.5.1 Overview .................................................................................................................................................. 74 3.5.2 Ratios – Definitions of Terms .................................................................................................................. 74
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Contents 3.5.3 3.5.4 3.5.5
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Ratio Structure: Outlook .......................................................................................................................... 76 Large Variances: Ratios ........................................................................................................................... 77 Key Percentiles and Rankings .................................................................................................................. 80
3.6 Productivity in Dominican Republic: Asset-Labor Ratios 95 3.6.1 Overview .................................................................................................................................................. 95 3.6.2 Asset to Labor: Outlook ........................................................................................................................... 95 3.6.3 Asset to Labor: International Gaps........................................................................................................... 96 3.6.4 Key Percentiles and Rankings .................................................................................................................. 99 3.7 Productivity in Dominican Republic: Liability-Labor Ratios 114 3.7.1 Overview ................................................................................................................................................ 114 3.7.2 Liability to Labor: Outlook .................................................................................................................... 114 3.7.3 Liability and Equity to Labor: International Gaps.................................................................................. 115 3.7.4 Key Percentiles and Rankings ................................................................................................................ 118 3.8 Productivity in Dominican Republic: Income-Labor Ratios 131 3.8.1 Overview ................................................................................................................................................ 131 3.8.2 Income to Labor: Outlook ...................................................................................................................... 131 3.8.3 Income to Labor: Gaps ........................................................................................................................... 132 3.8.4 Key Percentiles and Rankings ................................................................................................................ 135
4 4.1
MACRO-ACCESSIBILITY IN DOMINICAN REPUBLIC...........................................148 Executive Summary
148
4.2 Economic Fundamentals and Dynamics 148 4.2.1 Government Role in the Economy ......................................................................................................... 149 4.2.2 Infrastructure Development.................................................................................................................... 149 4.3 Political Risks 150 4.3.1 Economic Relationship with the United States ...................................................................................... 150 4.3.2 Politics and the Business Environment .................................................................................................. 151 4.3.3 The Political System............................................................................................................................... 151 4.4 Marketing Strategies 151 4.4.1 Distribution Channel Options................................................................................................................. 151 4.4.2 Agents and Distributors.......................................................................................................................... 152 4.4.3 Franchising Activities............................................................................................................................. 152 4.4.4 Direct Marketing Options....................................................................................................................... 152 4.4.5 Joint Ventures and Licensing Options.................................................................................................... 152 4.4.6 Selling Strategies.................................................................................................................................... 152 4.4.7 Advertising and Trade Promotion .......................................................................................................... 153 4.4.8 Pricing Issues.......................................................................................................................................... 153 4.4.9 Public Sector Marketing......................................................................................................................... 153 4.4.10 Intellectual Property Risks ..................................................................................................................... 153 4.4.11 Hiring Local Counsel ............................................................................................................................. 154 4.5 Import and Export Regulation Risks 154 4.5.1 Trade Barrier Risks ................................................................................................................................ 154 4.5.2 Valuations on Imports ............................................................................................................................ 155 4.5.3 Licenses Required for Imports ............................................................................................................... 155 4.5.4 Controls on Exports................................................................................................................................ 156 4.5.5 Documentation Required for Trade........................................................................................................ 156
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Contents 4.5.6 4.5.7 4.5.8 4.5.9 4.5.10 4.5.11
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Temporary Entry of Goods..................................................................................................................... 156 Restrictions on Imports .......................................................................................................................... 157 Local Standards ...................................................................................................................................... 157 Direccion General de Normas y Sistemas de Calidad (DIGENOR)....................................................... 157 Free Trade Zone Options........................................................................................................................ 158 Adherence to Free Trade Agreements .................................................................................................... 159
4.6 Investment Climate 160 4.6.1 Openness to Foreign Investment ............................................................................................................ 160 4.6.2 Conversion and Transfer Policies........................................................................................................... 160 4.6.3 Expropriation and Compensation ........................................................................................................... 160 4.6.4 Dispute Settlement ................................................................................................................................. 160 4.6.5 Performance Requirements and Incentives ............................................................................................ 161 4.6.6 Right to Private Ownership and Establishment ...................................................................................... 161 4.6.7 Protection of Property Rights ................................................................................................................. 161 4.6.8 Transparency of the Regulatory System................................................................................................. 161 4.6.9 Capital Market Risks .............................................................................................................................. 162 4.6.10 Political Violence ................................................................................................................................... 162 4.6.11 Corruption .............................................................................................................................................. 162 4.6.12 Bilateral Investment Agreements ........................................................................................................... 162 4.6.13 OPIC and Other Investment Insurance................................................................................................... 162 4.6.14 Labor ...................................................................................................................................................... 163 4.6.15 Free Trade Zones and Free Ports............................................................................................................ 163 4.7 Trade and Project Financing 164 4.7.1 The Banking System .............................................................................................................................. 164 4.7.2 Foreign Exchange Control Risks............................................................................................................ 164 4.7.3 General Financing Availability .............................................................................................................. 164 4.7.4 Financing Export Strategies ................................................................................................................... 164 4.7.5 Types of Available Export Financing and Insurance ............................................................................. 165 4.7.6 Financing Projects .................................................................................................................................. 165 4.8
Local Business Practices
165
4.9 Key Contacts 166 4.9.1 U.S. Government Contacts ..................................................................................................................... 166 4.9.2 Dominican Republic Government Offices ............................................................................................. 167 4.9.3 Chambers of Commerce......................................................................................................................... 169 4.9.4 Trade and Industry Associations ............................................................................................................ 169 4.9.5 Multilateral Development Bank Offices................................................................................................. 170 4.9.6 U.S. Trade-Related Offices .................................................................................................................... 171
5
DISCLAIMERS, WARRANTEES, AND USER AGREEMENT PROVISIONS .........172
5.1
Disclaimers & Safe Harbor
172
5.2
Icon Group International, Inc. User Agreement Provisions
173
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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 renewable energy equipment and services in Dominican Republic. As the editor of this report, I am drawing on a methodology developed at INSEAD, an international business school (www.insead.edu). For any given industry or sector, including renewable energy equipment and services, 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 renewable energy equipment and services in Dominican Republic. It does so by compiling published information that directly relates to latent demand and accessibility, either at the micro or macro level. The reader new to Dominican Republic can quickly understand where Dominican Republic fits into a firm’s strategic perspective. In Chapter 2, the report investigates latent demand and micro-accessibility for renewable energy equipment and services in Dominican Republic. In Chapters 3 and 4, the report covers proxy operating pro-forma financials and macroaccessibility in Dominican Republic. Macro-accessibility is a general evaluation of investment and business conditions in Dominican Republic.
1.2
HOW TO STRATEGICALLY EVALUATE DOMINICAN REPUBLIC
Perhaps the most efficient way of evaluating Dominican Republic is to consider key dimensions which themselves are composites of multiple factors. Composite portfolio approaches have long been used by strategic planners. The biggest challenge in this approach is to choose the appropriate factors that are the most relevant to international planning. The two measures of greatest relevance to renewable energy equipment and services 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”). www.icongrouponline.com
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Introduction & Methodology
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Framework for Prioritizing Countries Demand/Market Potential Driven Firm
High
Highest Priority
High Priority Latent Demand
Moderate Priority Low Priority
Low
Lowest Priority Low
High Relative Accessibility
Accessibility/Supply Averse Firm High Highest Priority High Priority Latent Demand
Moderate Priority Low Priority Lowest Priority
Low High
Low Relative Accessibility
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Introduction & Methodology
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In the top figure, the firm is driven by market potential, whereas the bottom figure represents a firm that is driven by costs or by an aversion to difficult markets. This report treats the reader as coming from a “generic firm” approaching the global market – neither a market-driven nor a costdriven company. Planners must therefore augment this report with their own company-specific factors that might change the priorities (e.g. a Canadian firm may have higher accessibility in Canada than a German firm).
1.3
LATENT DEMAND AND ACCESSIBILITY IN DOMINICAN REPUBLIC
This report provides a detailed overview of factors driving latent demand and accessibility for renewable energy equipment and services in Dominican Republic. Latent demand is largely driven by economic fundamentals specific to renewable energy equipment and services. This topic is discussed in Chapter 2 using work carried out in Dominican Republic on behalf of American firms and authored by the United States government (typically commercial attachés or similar persons in local offices of the U.S. Department of State). I have included a number of edits to clarify the information provided. Latent demand only represents half of the picture. Chapter 2 also deals with micro-accessibility for renewable energy equipment and services in Dominican Republic. I use the term “micro” since the discussion is focused specifically on renewable energy equipment and services. Chapter 3 is also a stand-alone report that I have authored. It covers proxy pro-forma financial indicators of firms operating in Dominican Republic. I use the word “proxy” because the provided figures only cover a “what if” scenario, based on actual operating results for firms in Dominican Republic. The numbers are only indicative of an average firm whose primary activity is in Dominican Republic. It covers a vertical analysis of the maximum likelihood balance sheet, income statement, and financial ratios of firms operating in Dominican Republic. It does so for a particular Standard Industrial Classification (SIC) code. That code covers “steam, gas and hydraulic turbines and turbine generator set units”, as defined in Chapter 3. Again, while “steam, gas and hydraulic turbines and turbine generator set units” does not exactly equate to “renewable energy equipment and services”, it nevertheless gives an indicator of how Dominican Republic compares to other countries for a proxy adjacent category along various dimensions. Chapter 4 deals with macro-accessibility and covers factors that go beyond renewable energy equipment and services. 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 macro-accessibility in Dominican Republic: •
Openness to Trade in Dominican Republic
•
Openness to Direct Investment in Dominican Republic
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Introduction & Methodology
•
Local Marketing and Entry Strategy Alternatives
•
Local Human Resources
•
Local Risks
4
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 Dominican Republic. Chapter 4 is also presented from the perspective of an American firm, though is equally applicable to most firms entering Dominican Republic. This chapter is also authored by local offices of the U.S. government, as is Chapter 2. Likewise, I have included a number of edits to clarify the provided information as it relates to the general strategic framework mentioned earlier.
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2
RENEWABLE ENERGY EQUIPMENT AND SERVICES IN DOMINICAN REPUBLIC
2.1
LATENT DEMAND AND ACCESSIBILITY: BACKGROUND
This report provides an overview of the opportunities for U.S. firms in the renewable energy sector in the Dominican Republic as well as its legal framework. The Dominican Republic experiences frequent electrical blackouts that can last from a couple of hours to more than twelve hours a day. Supply shortfalls in the sector can be attributed mainly to electricity distribution companies’ inability to collect sufficient funds from consumers, theft, and delays in government payments. Rising world petroleum prices and system inefficiencies have magnified the problems. Energy sector problems threaten economic competitiveness and create widespread public dissatisfaction. The government’s response has included a push to increase generating capacity. The Dominican Republic’s installed generation capacity is over 3,000 MW and the average daily peak demand is around only 1,900 MW. Technical and non-technical losses average 45 to 50%. Considering all of these facts, it is easy to conclude that this is the right time for renewable energy solutions in the Dominican Republic. In this report, we have highlighted key laws that affect or will affect renewable energy projects, as well as several considerations for each of the methods for renewable energy production and its potential in the Dominican market.
2.2 2.2.1
MARKET ISSUES AND OBSTACLES Legal Framework
There are several laws that comprise the legal framework for the renewable energy projects in the Dominican Republic. These include the following:
Reform of Public Enterprises Law 141-97 •
Provided the legal framework for the partial privatization of the electricity generation and distribution units.
General Electricity Law 125-01 •
Provides preferential treatment for companies that generate electricity from renewable energy, if prices and conditions are identical to conventional generation.
•
Companies that generate electricity with renewable energy are exempted from taxes for five years.
Presidential Decree 139-03 •
Provides import tax exemptions for solar panels and wind turbines.
•
Supports the diversification of sugar mills into energy producing IPP industries.
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Renewable Energy Equipment and Services •
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Incentive Law to promote industrial development in the border with Haiti regions, which includes incentives for wind, solar and all biofuels.
The Renewable Energy Law This bill was approved by the Chamber of Deputies and is now awaiting approval in the Dominican Senate and then its ratification from the Executive Branch. It includes the following incentives: •
Tax exemptions for imports of renewable energy components.
•
Reduced transmission fees for renewable energy electricity (preferential dispatch and fee).
•
Fixed feed-in price for renewable energy electricity.
•
Income tax exemptions (of up to 5 years) and fiscal incentives for self-suppliers.
•
Grants of up to 50% of financial costs (to be decided on a case-by-case basis, max. 5MW).
The objectives of this law are: •
Environmental impact reduction.
•
To promote renewable energy in all forms.
•
To attract foreign investment.
•
To reduce fossil fuel dependency.
There is also a Renewable Energy Fund or National Interest Fund. The Hydrocarbon Law 112-00 provides funding for the promotion of renewable energy and energy saving programs. It started as a 2% hydrocarbon tax income in 2002, and it increased to 5% in 2005. This fund and its programs are managed by the Ministry of Industry and Commerce of the Dominican Republic.
2.3 2.3.1
LATENT DEMAND: LEADING SEGMENTS Renewable Energy Assessments
Wind Potential •
1,500 km2.
•
Good-to-excellent wind resource potential.
•
>7m/s at 30 m.
•
Approximately 10,000 MW of wind potential.
•
Installed Capacity: None.
Source: NREL provided by the Ministry of Industry and Commerce.
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Renewable Energy Equipment and Services
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Planned Projects Projects CEPM CEPM Parques Eolicos del Caribe Union Fenosa TROC Int. York Caribbean Windpower Groupe AXOR, Inc. ACRES Int.
Capacity 15 MW 100 MW 60 MW and 40 MW 100 MW 40 MW 115 MW N/a N/a
Location East Coast South-West North-west Coast North Coast South-West North-west Coast N/a N/a
Source: Ministry of Industry and Commerce – Non-Conventional Energy Department
Feasible Areas to Exploit Wind Energy in the Dominican Republic Class 1
Provinces Distrito Nacional, La Romana, San Pedro de Macoris.
2
El Seybo, Hato Mayor, Sanchez Ramirez, Dajabon, Salcedo, Valverde, Monsenor Nouel, Monte Plata, Santiago Rodriguez, Duarte.
3
Azua, San Cristobal, Elias Pina, Espaillat.
4
Santiago, San Juan de la Maguana, Barahona, Samana, Montecristi, Peravia, La Vega, Maria Trinidad Sanchez, Bahoruco, Independencia.
5
Puerto Plata, La Altagracia.
6
Pedernales.
Source: Ministry of Industry and Commerce – Non-Conventional Energy Department
Solar Potential Assessment •
High solar radiation of approximately 5 kWh/m2/day.
Source: NREL provided by the Ministry of Industry and Commerce.
Solar Water Heating: •
Huge untapped potential.
•
Inexpensive thermosyphon technology applicable.
•
Concurrent source: expensive electricity.
There are approximately 350,000 rural households without access to modern energy services; a considerable amount of these households could be served by solar home systems.
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Renewable Energy Equipment and Services
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One of the programs being executed by the Renewable Energy Fund of the Ministry of Industry and Commerce is the Water Heater Exchange Program. The program plans to exchange approximately 190,000 electrical water heaters for solar water heaters. The users will have a financial plan through the State-owned bank, Banco de Reservas.
Hydropower •
Installed Capacity: 20 hydropower plants, capacity ranging 3-100 MW, for a total of 534 MW.
•
Hydro constitutes 16% of total installed generation capacity.
•
10% of produced electricity comes from the hydro units.
•
Potential: Approximately another 500 additional MW.
•
There are several small/micro projects in operation or under preparation.
•
Huge untapped potential for rural electrification.
Biomass •
Potential: Large untapped potential, lands previously used for sugar cane production.
•
Biomass yield: 15 to 60 million tons per year depending on technology used.
Biofuel •
Diversifying the sugar cane industry (a dozen sugar mills) for Ethanol production (300 to 1,500 millions of gallons per year) and Biogas as main products.
Ethanol •
There are several ethanol plants in the Dominican Republic that are in operation to produce rum.
•
Export Potential: There are provisions in the Caribbean Basin Initiative for the export to the United States of ethanol (anhydrous fuel) obtained through a renewable source. There is also export potential to the European Union through the Lome IV Agreement.
Under the Central American Free Trade Agreement-Dominican Republic (DR-CAFTA) U.S. imports into the Dominican Republic have been classified by categories. Each category provides for the elimination of customs duties in different stages. Some products will enter the Dominican Republic duty-free on the date the agreement enters into force, while others will receive gradual reductions on the customs duties. Under the DR-CAFTA, ethanol fuel exported from the Dominican Republic to the U.S. is subject to quota and a base tariff of 1.4 cents/liter, which will be phased out. Requirements to establish a company to produce and trade with ethanol fuel in the D.R.: •
Registration of the Commercial Name by the Industrial Property Office (Oficina Nacional de Propiedad Industrial – ONAP). This office is part of the Ministry of Industry and Commerce.
•
Industrial Registry Certificate by the Ministry of Industry and Commerce.
•
Environmental Permit or License by the Ministry of Environmental Issues and Natural Resources.
•
No-Objection Letter by the Municipality where the mill will be located.
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Renewable Energy Equipment and Services •
Land Property Title.
•
National Taxpayer Registration (Registro Nacional de Contribuyentes – RNC).
•
Certificate of Commercial Registry (Registro Mercantil) by the Santo Domingo Chamber of Commerce.
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In the commercial aspect, the company will have to comply with the Dominican Standards: •
NORDOM 600: Alcoholic Beverages – Anhidro Ethanol.
•
NORDOM 751: Liquid Fuel.
•
Gasoline mix with Anhidro Ethanol (Technical and security requirements still being established by DIGENOR).
•
Gasohol Regulation (still in draft) by the Ministry of Industry and Commerce.
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3
3.1
FINANCIAL INDICATORS: STEAM, GAS AND HYDRAULIC TURBINES AND TURBINE GENERATOR SET UNITS OVERVIEW
Is Dominican Republic competitive? With the globalization of markets, the increased mobility of corporate assets, and the need for productive human resources, this question has become all the more complex to answer. The financial indicators section was prepared to tackle this question by focusing on certain fundamentals: financial performance and labor productivity. Rather than focus on the economy as a whole, the analysis presented here considers only one sector: steam, gas and hydraulic turbines and turbine generator set units. We are essentially interested in the degree to which firms operating in Dominican Republic have fundamentally different financial structures and performance compared to firms located elsewhere. With respect to this view of competitiveness, if one were to invest or operate in Dominican Republic, how would the firm’s asset structure likely vary compared to a firm operating in some other country in North America or average location in the world? In Dominican Republic, do firms typically hold more cash and other short term assets, or do they concentrate their assets in physical plant and equipment? On the liability side, do firms operating in Dominican Republic have a higher percent of payables compared to other firms operating in North America, or do they hold a higher concentration of long term debt? The structure of the income statement is also telling. Do firms operating in Dominican Republic have relatively higher costs of goods sold, operating costs, or income taxes compared to firms located elsewhere in the region or the world in general? Are returns on equity higher in Dominican Republic? Are profit margins greater? Are inventories held longer? The financial indicators section was designed to answer these and similar questions that naturally affect one’s decision to invest or operate in Dominican Republic. Again, we are particularly interested in steam, gas and hydraulic turbines and turbine generator set units, 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 Dominican Republic differs from regional and global benchmarks. In this case, we are interested in the amount of labor required to operate a typical business in Dominican Republic and the likely returns on this human investment. What is the typical ratio of short-term and long-term assets to employee (employed in steam, gas and hydraulic turbines and turbine generator set units operations)? What are typical capitallabor ratios? How different are these ratios to those in North America in general and the world as a whole? What are the average sales and net profits per employee in Dominican Republic compared to regional benchmarks? The goal of this section is to assist managers in gauging the competitive performance of Dominican Republic at the global level for steam, gas and hydraulic turbines and turbine generator set units. With the globalization of markets, greater foreign competition, and the reduction of entry barriers, it becomes all the more important to benchmark Dominican Republic against other countries on a worldwide basis. Doing so, however, is not an obvious task. This report generates international benchmarks and measures gaps that might be revealed from such an exercise. First, data is collected from companies across all regions of the world. For each of these firms, data are standardized into comparable categories (assets, liabilities, income and ratios), by country, region and on a worldwide basis. From there, we eliminate all currency effects by standardizing within each category. Global benchmarks are then compared to those estimated for steam, gas and hydraulic turbines and turbine generator set units in Dominican Republic. Though we heavily rely on historical performance, the figures reported are not historical but are forecasts and projections for the coming fiscal year.
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Financial Indicators
3.1.1
11
Financial Returns and Gaps in Dominican Republic
The approach used in this report to evaluate operating performance for steam, gas and hydraulic turbines and turbine generator set units in Dominican Republic is called "vertical analysis." For those unfamiliar with this type of analysis, frequently taught in graduate schools of business, the reader is recommended Jae K. Shim and Joel G. Siegel’s recent book titled Financial Management.1 In their discussion of financial statement analysis and ratios, Skim and Siegel (p. 42-43), describe common-size statement (vertical analysis) as follows: A common-size statement is one that shows each item in percentage terms. Preparation of common-size statements is known as vertical analysis, in which a material financial statement item is used as a base value and all other accounts on the financial statement are compared to it. In the balance sheet, for example, total assets equal 100 percent, and each individual asset is stated as a percentage of total assets. Similarly, total liabilities and stockholders’ equity are assigned a value of 100 percent and each liability or equity account is then stated as a percentage of total liabilities and stockholders’ equity, respectively. … For the income statement, a value of 100 percent is assigned to net sales, and all other revenues and expense accounts are related to it. It is possible to see at a glance how each dollar of sales is distributed among various costs, expenses, and profits. The authors suggest that vertical analyses involve industry-based comparisons. Such a comparison “allows you to answer the question, ‘How does a business fare in the industry?’ You must compare the company’s ratios to… industry norms.” (p. 43-44) This approach is extended to country competitiveness (in this case Dominican Republic) for a particular sector (in this case steam, gas and hydraulic turbines and turbine generator set units). 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
1
Skim and Siegel (2000), Financial Management published by Barron’s Educational Series, Inc. (BARON’S BUSINESS LIBRARY Series), ISBN: 0-7641-1402-6. www.icongrouponline.com
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Financial Indicators •
12
Datastream (Thomson Financial) - www.datastream.com
•
Dun & Bradstreet - www.dnb.com
•
Hoovers - www.hoovers.com
•
HarrisInfoSource - www.HarrisInfo.com
•
InfoUSA - www.infousa.com
•
Investext (Thomson Financial) - www.investext.com
•
Kompass International Neuenschwander SA. – www.kompass.com
•
Moody's Investors Service - www.moodys.com
•
Primark (Thomson Financial) - www.primark.com
•
Profound (The Dialog Corporation – A Thomson Company) - www.profound.com
•
Reuters - www.reuters.com
•
Standard & Poor's - www.standardandpoors.com
It is interesting to note that commercial vendors often report different qualitative descriptions and industrial classifications from one to another. These descriptions and classifications may also be different from those reported by the firm itself. Anyone hoping to perform a benchmarking study, therefore, has to make a judgment call across these various sources in order to determine a reasonable classification. In this report, we have decided a metaanalytic process, by combining various sources (including linking a classification’s keywords to qualitative descriptions of the firm’s product line). In cases of inconsistency, the most recent or globally comparable available is chosen. Again, the overall goal is to classify firms, which either produce similar products, offer similar services, or are in the same stage of the value chain for a particular industrial classification. In the case of this report, the SIC code selected is: 3511 which is defined as “steam, gas and hydraulic turbines and turbine generator set units”. 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 Dominican Republic, for those that report financials (balance sheet and income statements) and that are involved in steam, gas and hydraulic turbines and turbine generator set units. 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 steam, gas and hydraulic turbines and turbine generator set units (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
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Financial Indicators
13
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 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 Dominican Republic and projected global averages for that same ratio. Furthermore, it can be insightful to know the location of each ratio within the distribution of the countries represented in Stage 5. These deviations, in fact, can be seen as projections or likely scenarios for the future. This is often true for two reasons. First, while a company’s financials change from year to year, its ratios are often stable. This is especially true for the country, regional and global benchmarks which represent averages across companies. From a purely Bayesian sense, the difference between the company’s recent ratios and the benchmarks are a reasonable prior for future deviations. This is true, even if the entire industry is hit by an external or exogenous shock, such as an oil crisis or economic slowdown. In other words, we assume that the structure of the variance in the industry’s financials remains stable. Second, many of the data are based on preliminary reports that might be changed in future filings. As forecasts, therefore, the numbers derived from these are also forecasts of past and future performance (with associated uncertainties). The calculation of the difference between a country’s ratios and the global benchmarks is meant to yield roughly approximate forecasts, or "useful measures". In general, more developed countries have more reliable source data. For many, ratios are 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 Dominican Republic whose primary activity is steam, gas and hydraulic turbines and turbine generator set units. 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 Dominican Republic. It is important to note that a percentile being high (or low) does not mean good (or bad) past, present or future financial performance. The reader must draw this conclusion on their own. The estimates provided were created to provide managerial insight, and not a recommendation with respect to particular investments within any country. We graphically report, for each part of the financial statement, the larger structural differences between Dominican Republic and the regional and global benchmarks, and provide a summary table of ranks and percentiles. These are estimates for firm which would be involved in steam, gas and hydraulic turbines and turbine generator set units. A deviation from the global norm need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or perhaps signal a country's relative strength or weakness for the coming fiscal year.
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Financial Indicators
3.1.2
14
Labor Productivity Gaps in Dominican Republic
In the case of labor productivity measures, this report maintains comparability over time and across countries by using a common currency (the US dollar) and relates each measure to a “per employee basis”. Ratios are projected using raw financial statistics and, as ratios, are therefore comparable. Given a country’s human resource ratios, the resulting figures are benchmarked across regional and global averages. The seven stage approach given above is used in a similar manner. We then report, for each part of the financial statement, the larger labor productivity gaps that Dominican Republic has vis-à-vis the worldwide average (for steam, gas and hydraulic turbines and turbine generator set units). 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 Dominican Republic or any other country, “its limitations must be recognized.” They find that (p. 59) “no single ratio or group of ratios is adequate for assessing all aspects of a company’s financial condition” operating in a particular country. The authors note the following limitations associated with ratio analyses which apply to the global benchmarking and vertical analysis presented here (p.60): • Accounting standards or policies may limit useful comparisons across companies • Management accounting practices across companies and countries may not be performed in the same style • Ratios are static and do not reveal future trends • Ratios do not indicate the quality of the components used to calculate the ratios (i.e. ratios have ambiguous interpretations) • Reported ratios may not reflect real values • Companies may be highly diversified, limiting the comparability of their ratios to others • Industry averages or norms are approximate; finer industry definitions may be required for certain interpretations or comparisons • Financial statements and resulting ratios often mean different things to different people depending on their points of view or motivations. Again, all figures reported here are estimates, so due caution is required. The above caveats, and the fact that statements made in this report are forward-looking, requires that this point be emphasized. A number of intervening factors can have material effect on the ratios and variances forecasted. These include changes in a company's management style, exchange rate volatility, changes in accounting standards, the lack of oversight or comparability in accounting standards, changes in economic conditions, changes in competition, changes in the global economy, changes in source data quality, and similar factors.
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Financial Indicators
3.2 3.2.1
15
FINANCIAL RETURNS IN DOMINICAN REPUBLIC: ASSET STRUCTURE RATIOS Overview
In this chapter we consider the asset structure of companies involved in steam, gas and hydraulic turbines and turbine generator set units operating in Dominican Republic 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 Dominican Republic and the average global benchmarks (total assets = 100 percent). For ratios where there are large deviations between Dominican Republic and the benchmarks, graphics are provided (sometimes referred to as a financial “gap” analysis). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key vertical analysis asset ratios are highlighted across countries in the comparison group.
3.2.2
Assets – Definitions of Terms
The following definitions are provided for those less familiar with the asset-side of financial statement analysis. As this chapter deals with the vertical analysis and global benchmarking of assets, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •
Cash. Cash is typically defined as money on hand, on deposit with chartered bank, or held in the form of eligible securities.
•
Current Assets. Current assets are generally defined to be resources which are available, or can readily be made available, to meet the cost of operations or to pay current liabilities.
•
Intangible Other Assets. Intangible assets are generally understood to be nonphysical assets such as legal rights (patents and trademarks) recorded at their historical cost then reduced by systematic amortization.
•
Property Plant and Equipment - Gross. Gross property, plant and equipment generally consists of the gross book value (rather than the more commonly-used measures of fixed capital stocks in current or real value), of all commercial buildings, associated land and equipment used therein that are owned by the company and that are either used or operated by the company or leased or rented to others.
•
Property Plant and Equipment - Net. Net PP&E equals the original cost of property, plant, and equipment (PP&E), less accumulated depreciation, depletion and amortization (DD&A).
•
Receivables (Net). Net receivables are defined as the net amount due to the company from private persons, businesses, agencies, funds, or governmental units which is expected to be collected in the form of moneys, goods, and/or services.
•
Short Term Investments. Short-term investments are investments which can be typically liquidated in less than one year.
•
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.
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Financial Indicators •
16
Total Inventories. Total inventories are defined as the total amount of goods on hand.
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Financial Indicators
3.2.3
17
Asset Structure: Outlook
Using the methodology described in the introduction, the following table summarizes asset structure benchmarks for firms involved in steam, gas and hydraulic turbines and turbine generator set units in Dominican Republic. To allow comparable benchmarking, a common index of Total Assets = 100 is used. All figures are current-year projections for companies operating in Dominican Republic based on latest financial results available. Asset Structure Dominican Republic North America World Avg. _________________________________________________________________________________________________________
Cash & Short Term Investments Receivables (Net) Total Inventories Other Current Assets Current Assets - Total Property Plant and Equipment - Net Property Plant and Equipment - Gross Accumulated Depreciation - Total Other Assets Intangible Other Assets Total Assets
2.36 21.31 31.01 0.66 55.35 21.77 91.24 64.07 1.09 0.69 100.00
9.46 25.59 18.44 1.52 55.46 25.88 46.78 23.93 3.97 2.30 100.00
11.41 27.15 16.97 1.23 57.46 25.30 51.05 27.21 4.21 2.24 100.00
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Financial Indicators
3.2.4
18
Large Variances: Assets
The following graphics summarize for steam, gas and hydraulic turbines and turbine generator set units the large asset structure gaps between firms operating in Dominican Republic and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.
Gap: Cash & Short Term Investments 15
9.46
10 5
11.41
2.36
0 -5 -10 Dom inican Republic
North Am erica
World Average
-9.05 Gap
Gap: Receivables (Net) 30
21.31
25.59
27.15
20 10 0 -5.84
-10 Dom inican Republic
North Am erica
World Average
Gap
Gap: Total Inventories 40
31.01
30
18.44
20
16.97
14.04
10 0 Dom inican Republic
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North Am erica
World Average
Gap
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Financial Indicators
19
Gap: Other Current Assets 2 1.5 1 0.5 0 -0.5 -1
1.52
1.23
0.66
-0.57 Dom inican Republic
North Am erica
World Average
Gap
Gap: Current Assets - Total 55.35
60 50 40 30 20 10 0 -10
55.46
57.46
-2.11 Dom inican Republic
North Am erica
World Average
Gap
Gap: Property Plant and Equipment - Net 30 25 20 15 10 5 0 -5
21.77
Dom inican Republic
25.88
North Am erica
25.3
World Average
-3.53 Gap
Gap: Property Plant and Equipment - Gross 91.24
100 80 60
46.78
51.05
40
40.19
20 0 Dom inican Republic
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North Am erica
World Average
Gap
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Financial Indicators
20
Gap: Accumulated Depreciation - Total 80
64.07
60 40
23.93
27.21
36.86
20 0 Dom inican Republic
North Am erica
World Average
Gap
Gap: Other Assets 6
3.97
4
4.21
1.09
2 0 -2
-3.12
-4 Dom inican Republic
North Am erica
World Average
Gap
Gap: Intangible Other Assets 3
2.3
2.24
2 0.69
1 0 -1
-1.55
-2 Dom inican Republic
North Am erica
World Average
Gap
Gap: Total Assets 100
100
100
100
80 60 40 20
0
0 Dom inican Republic
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North Am erica
World Average
Gap
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Financial Indicators
3.2.5
21
Key Percentiles and Rankings
We now consider the distribution of asset ratios for steam, gas and hydraulic turbines and turbine generator set units using ranks and percentiles. What percent of countries have a value lower or higher than Dominican Republic (what is the ratio's rank or percentile)? The table below answers this question with respect to the vertical analysis of asset structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key vertical asset ratios are highlighted in additional tables. Asset Structure
Dominican Republic
Rank of Total
Percentile
2.36 21.31 31.01 0.66 55.35 21.77 91.24 64.07 1.09 0.69 100.00
48 of 54 43 of 54 5 of 54 35 of 48 35 of 54 37 of 54 4 of 50 4 of 50 47 of 54 35 of 44
11.11 20.37 90.74 27.08 35.19 31.48 92.00 92.00 12.96 20.45
_________________________________________________________________________________________________________
Cash & Short Term Investments Receivables (Net) Total Inventories Other Current Assets Current Assets - Total Property Plant and Equipment - Net Property Plant and Equipment - Gross Accumulated Depreciation - Total Other Assets Intangible Other Assets Total Assets
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Financial Indicators
22
Cash & Short Term Investments Countries
Value (total assets = 100)
Rank
Percentile
22.46 22.29 22.10 20.17 19.72 19.10 18.47 17.20 16.72 16.48 16.28 15.53 15.50 14.82 14.36 14.17 12.80 12.66 12.64 12.39 11.85 11.41 11.40 11.25 10.76 10.72 10.48 9.83 9.66 9.45 9.31 8.53 6.36 6.27 5.03 4.50 4.42 3.68 3.02 2.94 0.74 0.70 0.50 0.50 0.40
1 2 3 4 5 6 8 9 10 11 12 14 15 16 17 19 20 21 22 23 24 25 26 27 28 29 31 32 33 34 35 37 38 39 41 43 44 45 46 47 48 49 50 51 53
98.11 96.23 94.34 92.45 90.57 88.68 84.91 83.02 81.13 79.25 77.36 73.58 71.70 69.81 67.92 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 41.51 39.62 37.74 35.85 33.96 30.19 28.30 26.42 22.64 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 3.77 0.00
Region
_________________________________________________________________________________________________________
Hong Kong Israel Ireland South Africa Indonesia Australia China South Korea Norway Singapore Japan USA Russia Canada Spain France Malaysia Taiwan Greece Switzerland Finland the United Kingdom Pakistan Czech Republic Philippines Luxembourg Argentina Belgium Italy Germany India Sweden Austria Thailand Denmark Hungary Netherlands Poland Peru New Zealand Brazil Chile Turkey Mexico Portugal
Asia the Middle East Europe Africa Asia Oceana Asia Asia Europe Asia Asia North America Europe North America Europe Europe Asia Asia Europe Europe Europe Europe the Middle East Europe Asia Europe Latin America Europe Europe Europe Asia Europe Europe Asia Europe Europe Europe Europe Latin America Oceana Latin America Latin America the Middle East Latin America Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Financial Indicators
23
Cash & Short Term Investments (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value (total assets = 100)
Rank
Percentile
Bahamas Aruba Virgin Islands British Virgin Islands Antigua & Barbuda Puerto Rico Martinique USA Cayman Islands Montserrat Canada St. Pierre & Miquelon Haiti Barbados Anguilla St. Vincent & The Grenadines Bermuda Jamaica Turks and Caicos Isl. Guadeloupe St. Kitts and Nevis Trinidad & Tobago Dominican Republic Cuba Dominica Grenada St. Lucia Greenland Netherlands Antilles
22.51 21.53 20.26 19.53 17.08 16.90 15.53 15.53 15.26 15.01 14.82 12.03 11.23 10.79 10.48 5.97 5.06 4.85 4.19 3.93 3.52 3.18 2.36 0.68 0.60 0.41 0.40 0.40 0.38
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
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Financial Indicators
24
Receivables (Net) Countries
Value (total assets = 100)
Rank
Percentile
48.48 47.07 40.55 39.45 37.74 37.64 37.09 36.10 35.58 34.41 33.62 33.54 32.87 32.60 31.81 30.71 30.57 30.43 30.27 28.75 28.25 28.08 27.97 27.45 27.38 27.24 26.16 26.11 25.65 25.20 25.08 25.07 24.40 24.35 22.74 22.62 22.21 21.94 21.69 21.23 21.15 19.07 18.76 18.35 15.60
1 2 3 4 5 6 7 8 9 11 12 13 14 15 16 17 18 19 20 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 40 41 42 43 44 45 46 47 51
98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 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 24.53 22.64 20.75 18.87 16.98 15.09 13.21 11.32 3.77
Region
_________________________________________________________________________________________________________
Spain Portugal Greece India Turkey Mexico France Czech Republic Italy Philippines Argentina Netherlands Israel Ireland Malaysia Pakistan Austria the United Kingdom South Africa Denmark Sweden Norway Germany Japan Belgium Peru Finland New Zealand Brazil Singapore Switzerland Taiwan Chile South Korea Canada Hong Kong USA Russia Luxembourg China Thailand Hungary Indonesia Australia Poland
Europe Europe Europe Asia the Middle East Latin America Europe Europe Europe Asia Latin America Europe the Middle East Europe Asia the Middle East Europe Europe Africa Europe Europe Europe Europe Asia Europe Latin America Europe Oceana Latin America Asia Europe Asia Latin America Asia North America Asia North America Europe Europe Asia Asia Europe Asia Oceana Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Financial Indicators
25
Receivables (Net) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value (total assets = 100)
Rank
Percentile
Greenland Netherlands Antilles Barbados Anguilla Bahamas Grenada St. Lucia Haiti Virgin Islands Bermuda British Virgin Islands Antigua & Barbuda Puerto Rico St. Pierre & Miquelon Cuba Canada USA Martinique Cayman Islands Aruba Dominican Republic Montserrat Dominica St. Vincent & The Grenadines Turks and Caicos Isl. Guadeloupe Jamaica St. Kitts and Nevis Trinidad & Tobago
47.07 45.50 34.61 33.62 33.20 30.85 30.65 30.26 29.88 28.92 28.79 24.19 23.92 23.82 23.52 22.74 22.21 21.99 21.83 21.69 21.31 21.26 21.05 20.13 17.72 16.66 16.37 14.89 13.47
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
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Financial Indicators
26
Total Inventories Countries
Value (total assets = 100)
Rank
Percentile
39.81 39.65 36.42 31.72 29.43 29.36 28.95 27.32 26.04 25.68 25.57 25.46 25.35 24.70 24.51 24.33 21.52 21.50 21.05 20.66 18.50 18.26 18.25 17.67 17.52 17.47 16.81 16.23 15.53 15.46 15.31 15.28 15.27 14.91 14.52 14.45 14.00 13.99 13.88 13.46 12.49 9.94 8.25 7.20 7.18
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 28 29 31 32 33 34 35 36 37 38 40 41 42 43 45 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 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 47.17 45.28 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 24.53 22.64 20.75 18.87 15.09 7.55 5.66 3.77 1.89
Region
_________________________________________________________________________________________________________
Pakistan Peru South Africa Denmark Australia Portugal Italy New Zealand Germany Israel Brazil Ireland Netherlands France Finland Chile Sweden the United Kingdom Norway Thailand China USA Austria Switzerland Hong Kong Spain Belgium Greece South Korea Singapore Japan Luxembourg Hungary India Canada Czech Republic Philippines Russia Indonesia Argentina Poland Malaysia Taiwan Turkey Mexico
the Middle East Latin America Africa Europe Oceana Europe Europe Oceana Europe the Middle East Latin America Europe Europe Europe Europe Latin America Europe Europe Europe Asia Asia North America Europe Europe Asia Europe Europe Europe Asia Asia Asia Europe Europe Asia North America Europe Asia Europe Asia Latin America Europe Asia Asia the Middle East Latin America
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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©2007 Icon Group International, Inc.
Financial Indicators
27
Total Inventories (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value (total assets = 100)
Rank
Percentile
Haiti Bermuda Dominican Republic Greenland Netherlands Antilles Bahamas Cuba Virgin Islands British Virgin Islands Dominica St. Vincent & The Grenadines USA Cayman Islands Aruba Jamaica Antigua & Barbuda Puerto Rico Canada Turks and Caicos Isl. Martinique Barbados Montserrat Anguilla Guadeloupe St. Kitts and Nevis Trinidad & Tobago St. Pierre & Miquelon Grenada St. Lucia
39.22 31.91 31.01 29.36 28.38 25.93 23.45 23.34 22.49 20.99 19.67 18.26 17.94 16.80 15.99 15.42 15.25 14.52 14.20 14.02 13.86 13.55 13.46 13.34 11.92 10.79 7.83 5.88 5.84
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
28
Current Assets - Total Countries
Value (total assets = 100)
Rank
Percentile
86.90 83.62 82.93 82.17 80.55 76.94 76.42 75.70 71.16 70.76 69.08 67.43 66.94 65.90 65.79 64.46 64.18 63.35 62.69 62.23 62.21 60.13 60.12 60.06 59.39 59.01 58.46 58.29 57.88 57.61 56.81 56.68 56.05 55.66 54.70 54.01 53.99 53.70 52.68 51.37 49.83 45.44 45.32 38.85 31.77
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 41 42 44 45 46 51 53
98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 22.64 20.75 16.98 15.09 13.21 3.77 0.00
Region
_________________________________________________________________________________________________________
South Africa Israel Ireland Pakistan Spain Portugal France Italy Greece Peru Denmark Norway Germany the United Kingdom India Finland Netherlands Czech Republic Hong Kong Japan Australia USA China Sweden Philippines Argentina South Korea Singapore Taiwan Switzerland New Zealand Austria Indonesia Canada Malaysia Belgium Brazil Thailand Russia Chile Luxembourg Turkey Mexico Hungary Poland
Africa the Middle East Europe the Middle East Europe Europe Europe Europe Europe Latin America Europe Europe Europe Europe Asia Europe Europe Europe Asia Asia Oceana North America Asia Europe Asia Latin America Asia Asia Asia Europe Oceana Europe Asia North America Asia Europe Latin America Asia Europe Latin America Europe the Middle East Latin America Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
29
Current Assets - Total (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value (total assets = 100)
Rank
Percentile
Bahamas Haiti Greenland Virgin Islands Netherlands Antilles British Virgin Islands Bermuda Barbados USA Aruba Cayman Islands Anguilla Antigua & Barbuda Puerto Rico Canada Dominican Republic St. Pierre & Miquelon Martinique St. Vincent & The Grenadines Montserrat Cuba Dominica Jamaica Grenada St. Lucia Turks and Caicos Isl. Guadeloupe St. Kitts and Nevis Trinidad & Tobago
84.46 80.96 76.94 76.02 74.38 73.25 69.49 60.74 60.13 60.12 59.10 59.01 58.06 57.43 55.66 55.35 54.98 52.78 51.12 51.02 49.52 44.32 41.56 37.14 36.90 36.10 33.94 30.33 27.44
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
30
Property Plant and Equipment - Net Countries
Value (total assets = 100)
Rank
Percentile
60.82 49.74 42.66 40.91 40.59 40.39 35.78 35.48 33.50 32.37 30.55 29.91 29.40 29.17 28.69 28.27 28.01 27.84 27.32 27.30 26.60 25.17 24.64 24.45 24.30 23.31 23.18 22.56 22.36 21.41 20.81 17.57 16.34 15.64 15.45 14.57 14.37 11.74 11.73 9.11 9.04 7.99 6.76 5.72 5.71
1 2 3 4 5 6 7 8 11 13 15 16 18 19 20 21 22 23 24 25 26 28 29 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52
98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 79.25 75.47 71.70 69.81 66.04 64.15 62.26 60.38 58.49 56.60 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 16.98 15.09 13.21 11.32 9.43 7.55 5.66 3.77 1.89
Region
_________________________________________________________________________________________________________
Hungary Poland Brazil Thailand Chile Philippines Singapore Indonesia Malaysia South Korea China Canada New Zealand Russia Netherlands Switzerland Taiwan Peru Australia Japan Austria the United Kingdom Sweden Luxembourg Hong Kong Denmark Finland Germany India USA Portugal Greece Norway Czech Republic Spain Argentina Italy Pakistan France Israel Ireland Belgium South Africa Turkey Mexico
Europe Europe Latin America Asia Latin America Asia Asia Asia Asia Asia Asia North America Oceana Europe Europe Europe Asia Latin America Oceana Asia Europe Europe Europe Europe Asia Europe Europe Europe Asia North America Europe Europe Europe Europe Europe Latin America Europe the Middle East Europe the Middle East Europe Europe Africa the Middle East Latin America
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
31
Property Plant and Equipment - Net (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value (total assets = 100)
Rank
Percentile
Turks and Caicos Isl. Guadeloupe St. Kitts and Nevis Trinidad & Tobago Cuba St. Vincent & The Grenadines Dominica Antigua & Barbuda Puerto Rico Jamaica Canada Martinique Montserrat St. Pierre & Miquelon Bermuda Aruba Dominican Republic USA Cayman Islands Greenland Netherlands Antilles Barbados Anguilla Haiti Bahamas Virgin Islands British Virgin Islands Grenada St. Lucia
56.52 53.13 47.48 42.96 39.12 38.94 35.02 32.15 31.80 31.66 29.91 29.23 28.25 26.61 23.45 23.30 21.77 21.41 21.05 20.81 20.12 15.00 14.57 11.56 9.21 8.29 7.98 4.68 4.65
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
32
Accumulated Depreciation - Total Countries
Value (total assets = 100)
Rank
Percentile
81.92 76.67 72.95 58.66 47.42 43.93 38.09 38.01 34.66 32.91 30.96 29.08 27.56 27.56 27.13 26.77 26.47 25.42 25.31 23.44 21.19 21.05 20.55 20.05 20.00 18.90 18.66 18.44 16.87 16.81 16.22 15.85 15.72 15.15 9.65 9.63 9.02 7.19 6.40 5.96 5.29
1 2 3 4 5 6 8 9 11 13 14 16 17 18 19 20 21 23 24 25 26 27 28 29 30 32 33 34 36 37 38 39 40 41 42 43 44 46 47 48 49
97.96 95.92 93.88 91.84 89.80 87.76 83.67 81.63 77.55 73.47 71.43 67.35 65.31 63.27 61.22 59.18 57.14 53.06 51.02 48.98 46.94 44.90 42.86 40.82 38.78 34.69 32.65 30.61 26.53 24.49 22.45 20.41 18.37 16.33 14.29 12.24 10.20 6.12 4.08 2.04 0.00
Region
_________________________________________________________________________________________________________
Peru Brazil Chile Belgium Philippines Thailand Japan Germany India Austria Switzerland Netherlands New Zealand Indonesia Australia Luxembourg Sweden USA the United Kingdom France China Denmark Finland Canada Singapore Norway South Korea Spain Italy Russia Malaysia Israel Ireland Hong Kong Turkey Mexico South Africa Greece Czech Republic Argentina Taiwan
Latin America Latin America Latin America Europe Asia Asia Asia Europe Asia Europe Europe Europe Oceana Asia Oceana Europe Europe North America Europe Europe Asia Europe Europe North America Asia Europe Asia Europe Europe Europe Asia the Middle East Europe Asia the Middle East Latin America Africa Europe Europe Latin America Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
33
Accumulated Depreciation - Total (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value (total assets = 100)
Rank
Percentile
Cuba Dominican Republic Dominica St. Vincent & The Grenadines Jamaica USA Cayman Islands Bermuda Canada Antigua & Barbuda Puerto Rico Martinique Montserrat Bahamas Aruba Virgin Islands British Virgin Islands Grenada St. Lucia Barbados Anguilla St. Pierre & Miquelon
70.32 64.07 62.94 41.83 34.00 25.42 24.98 21.18 20.05 18.53 18.33 16.85 16.28 16.01 14.53 14.41 13.89 7.89 7.84 6.14 5.96 5.03
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
95.45 90.91 86.36 81.82 77.27 72.73 68.18 63.64 59.09 54.55 50.00 45.45 40.91 36.36 31.82 27.27 22.73 18.18 13.64 9.09 4.55 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
34
Intangible Other Assets Countries
Value (total assets = 100)
Rank
Percentile
29.27 14.53 12.58 12.03 10.07 9.91 9.72 8.97 8.70 8.28 7.83 7.20 6.94 6.74 6.71 6.10 4.97 3.59 2.56 2.34 2.19 2.17 2.08 2.01 2.01 1.98 1.94 1.50 1.35 1.15 1.04 0.89 0.54 0.33 0.31 0.31 0.27 0.27
1 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 31 32 33 34 35 36 37 38 40 41
97.67 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 27.91 25.58 23.26 20.93 18.60 16.28 13.95 11.63 6.98 4.65
Region
_________________________________________________________________________________________________________
Belgium USA Canada Norway Switzerland Australia Sweden France Luxembourg Austria Finland Malaysia New Zealand Germany Italy the United Kingdom Denmark Singapore Spain Greece Israel Ireland Czech Republic Hong Kong Netherlands China Argentina South Korea Russia India Japan Peru South Africa Hungary Turkey Mexico Poland Thailand
Europe North America North America Europe Europe Oceana Europe Europe Europe Europe Europe Asia Oceana Europe Europe Europe Europe Asia Europe Europe the Middle East Europe Europe Asia Europe Asia Latin America Asia Europe Asia Asia Latin America Africa Europe the Middle East Latin America Europe Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
35
Intangible Other Assets (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value (total assets = 100)
Rank
Percentile
USA Cayman Islands Canada Bermuda Bahamas Barbados Virgin Islands Anguilla Aruba British Virgin Islands Antigua & Barbuda Puerto Rico Martinique Montserrat Dominican Republic Turks and Caicos Isl. Guadeloupe St. Kitts and Nevis Grenada St. Vincent & The Grenadines St. Lucia Trinidad & Tobago Jamaica
14.53 14.28 12.58 5.00 2.21 2.00 1.99 1.94 1.93 1.92 1.49 1.47 1.35 1.31 0.69 0.31 0.29 0.26 0.25 0.25 0.25 0.24 0.21
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
95.65 91.30 86.96 82.61 78.26 73.91 69.57 65.22 60.87 56.52 52.17 47.83 43.48 39.13 34.78 30.43 26.09 21.74 17.39 13.04 8.70 4.35 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.3 3.3.1
36
FINANCIAL RETURNS IN DOMINICAN REPUBLIC: LIABILITY STRUCTURE RATIOS Overview
In this chapter we consider the liability structure of firms operating in Dominican Republic benchmarked against global averages. The chapter begins by defining relevant terms. A common-size statement, or vertical analysis of liabilities and shareholder equity is then presented for the proto-typical firm operating in Dominican Republic and the average global benchmarks (sometimes referred to as a financial “gap” analysis). The figure reflect firms involved in steam, gas and hydraulic turbines and turbine generator set units in Dominican Republic. For ratios where there are large deviations between Dominican Republic and the benchmarks, graphics are provided (total liabilities and equity = 100 percent). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key vertical analysis liability ratios are highlighted.
3.3.2
Liabilities and Equity – Definitions of Terms
The following definitions are provided for those less familiar with the liability-side of financial statement analysis. As this chapter deals with the vertical analysis and global benchmarking of liabilities and equity, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •
Accounts Payable. Accounts payable are defined as amounts owed on open account to private persons or organizations for goods or services received.
•
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”.
•
Current Liabilities - Total. Total current liabilities are defined as the total amount of obligations which would require the use of current assets or other current liabilities to pay.
•
Current Portion of Long Term Debt. The current proportion of long term debt is typically defined as debt which is payable in more than one year.
•
Deferred Taxes. Deferred taxes are 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.
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Financial Indicators
37
•
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
38
Liability Structure: Outlook
Using the methodology described in the introduction, the following table summarizes liability and equity structure benchmarks for firms involved in steam, gas and hydraulic turbines and turbine generator set units in Dominican Republic. To allow comparable benchmarking, a common index of Total Liabilities & Shareholders Equity = 100 is used. All figures are current-year projections for companies operating in Dominican Republic based on latest financial results available. Liability Structure Dominican Republic North America World Avg. _________________________________________________________________________________________________________
Accounts Payable Short Term Debt & Current Portion of Long Term Debt Other Current Liabilities Current Liabilities - Total Long Term Debt Long Term Debt Excluding Capitalized Leases Deferred Taxes Other Liabilities Total Liabilities Common Equity Other Appropriated Reserves Retained Earnings Total Liabilities & Shareholders Equity
1.61 10.77 9.78 21.35 1.32 1.32 1.43 0.66 24.05 54.17 9.07 0.72 100.00
10.31 11.80 12.23 34.76 7.97 7.90 0.10 0.52 44.42 45.11 5.35 13.03 100.00
12.85 10.39 11.64 36.82 6.27 6.20 0.48 0.63 45.11 46.61 4.64 7.24 100.00
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.3.4
39
Large Variances: Liabilities
The following graphics summarize for steam, gas and hydraulic turbines and turbine generator set units the large liability structure gaps between firms operating in Dominican Republic and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.
Gap: Accounts Payable 15 10 5 0 -5 -10 -15
10.31
12.85
1.61
-11.24 Dom inican Republic
North Am erica
World Average
Gap
Gap: Short Term Debt & Current Portion of Long Term Debt 12 10 8 6 4 2 0
11.8
10.77
10.39
0.38 Dom inican Republic
North Am erica
World Average
Gap
Gap: Other Current Liabilities 15 9.78
10
12.23
11.64
5 0
-1.86
-5 Dom inican Republic
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North Am erica
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
40
Gap: Current Liabilities - Total 34.76
40 30 20 10 0 -10 -20
36.82
21.35
-15.47 Dom inican Republic
North Am erica
World Average
Gap
Gap: Long Term Debt 10
7.97
5
6.27
1.32
0 -5 Dom inican Republic
North Am erica
World Average
-4.95 Gap
Gap: Long Term Debt Excluding Capitalized Leases 10
7.9
5
6.2
1.32
0 -5 Dom inican Republic
North Am erica
World Average
-4.88 Gap
Gap: Deferred Taxes 1.43
1.5
0.95
1 0.48
0.5 0.1 0 Dom inican Republic
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North Am erica
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
41
Gap: Total Liabilities 60
44.42
40
45.11
24.05
20 0 -20
-21.06
-40 Dom inican Republic
North Am erica
World Average
Gap
Gap: Common Equity 54.17
60 50 40 30 20 10 0
45.11
46.61
7.56 Dom inican Republic
North Am erica
World Average
Gap
Gap: Other Appropriated Reserves 9.07
10 8
5.35
6
4.64
4.43
4 2 0 Dom inican Republic
North Am erica
World Average
Gap
Gap: Retained Earnings 13.03
15 10
7.24
5
0.72
0 -5
-6.52
-10 Dom inican Republic
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North Am erica
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
3.3.5
42
Key Percentiles and Rankings
We now consider the distribution of liability ratios for steam, gas and hydraulic turbines and turbine generator set units using ranks and percentiles. What percent of countries have a value lower or higher than Dominican Republic (what is the ratio's rank or percentile)? The table below answers this question with respect to the vertical analysis of liability structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key vertical liability ratios are highlighted in additional tables. Liability Structure
Dominican Republic
Rank of Total
Percentile
1.61 10.77 9.78 21.35 1.32 1.32 1.43 0.66 24.05 54.17 9.07 0.72 100.00
51 of 51 23 of 54 32 of 54 53 of 54 49 of 49 49 of 49 8 of 40 24 of 44 53 of 54 14 of 54 10 of 50 42 of 49
0.00 57.41 40.74 1.85 0.00 0.00 80.00 45.45 1.85 74.07 80.00 14.29
_________________________________________________________________________________________________________
Accounts Payable Short Term Debt & Current Portion of Long Term Debt Other Current Liabilities Current Liabilities - Total Long Term Debt Long Term Debt Excluding Capitalized Leases Deferred Taxes Other Liabilities Total Liabilities Common Equity Other Appropriated Reserves Retained Earnings Total Liabilities & Shareholders Equity
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
43
Accounts Payable Countries
Value (total liabilities & equity = 100)
Rank
Percentile
31.84 24.17 22.32 20.60 20.15 19.56 18.99 18.07 15.66 15.51 15.18 14.89 14.85 14.78 14.52 13.84 13.66 13.56 13.26 13.18 13.15 12.44 12.35 11.85 11.72 11.53 11.19 10.99 10.84 10.30 9.38 9.10 9.02 8.97 8.95 8.78 8.71 8.18 7.33 7.01 7.00 2.06
1 2 3 4 5 6 7 9 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 27 28 29 30 31 32 34 36 37 38 39 40 42 43 44 46 47 48 50
98.00 96.00 94.00 92.00 90.00 88.00 86.00 82.00 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 46.00 44.00 42.00 40.00 38.00 36.00 32.00 28.00 26.00 24.00 22.00 20.00 16.00 14.00 12.00 8.00 6.00 4.00 0.00
Region
_________________________________________________________________________________________________________
Belgium Italy Spain Philippines India France Brazil Chile Japan Hong Kong Singapore Greece Taiwan Netherlands the United Kingdom New Zealand Canada Norway Czech Republic Denmark South Korea Sweden Argentina Russia Australia Thailand Austria Indonesia Switzerland China Luxembourg Germany USA Hungary Malaysia Israel Ireland Finland Poland Turkey Mexico Peru
Europe Europe Europe Asia Asia Europe Latin America Latin America Asia Asia Asia Europe Asia Europe Europe Oceana North America Europe Europe Europe Asia Europe Latin America Europe Oceana Asia Europe Asia Europe Asia Europe Europe North America Europe Asia the Middle East Europe 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
44
Accounts Payable (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value (total liabilities & equity = 100)
Rank
Percentile
Cuba Dominica Aruba St. Pierre & Miquelon Canada Bermuda Antigua & Barbuda Puerto Rico Barbados Anguilla Martinique Montserrat St. Vincent & The Grenadines USA Jamaica Bahamas Cayman Islands Turks and Caicos Isl. Virgin Islands Guadeloupe British Virgin Islands St. Kitts and Nevis Trinidad & Tobago Grenada St. Lucia Dominican Republic
17.42 15.59 14.87 14.11 13.66 13.26 13.06 12.92 12.71 12.35 11.87 11.48 10.98 9.02 8.93 8.87 8.86 8.33 7.98 7.83 7.69 7.00 6.33 5.73 5.70 1.61
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
96.15 92.31 88.46 84.62 80.77 76.92 73.08 69.23 65.38 61.54 57.69 53.85 50.00 46.15 42.31 38.46 34.62 30.77 26.92 23.08 19.23 15.38 11.54 7.69 3.85 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
45
Current Liabilities - Total Countries
Value (total liabilities & equity = 100)
Rank
Percentile
60.54 58.44 57.60 52.51 52.20 49.47 48.47 47.78 45.62 44.98 42.99 42.62 41.74 41.66 41.58 41.02 40.85 40.74 40.61 40.11 39.05 37.83 37.20 36.79 36.11 35.29 34.60 33.26 33.15 33.01 32.94 31.08 31.01 30.90 30.83 29.13 28.86 28.55 27.30 26.03 25.68 25.51 25.28 23.73 23.18
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 23 24 25 26 27 28 30 31 32 33 34 35 36 37 38 39 40 41 42 45 46 47 50 51
98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 56.60 54.72 52.83 50.94 49.06 47.17 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 15.09 13.21 11.32 5.66 3.77
Region
_________________________________________________________________________________________________________
Brazil Spain Chile South Africa Pakistan Italy Portugal Taiwan Greece France Norway the United Kingdom Austria China India Denmark Turkey Mexico Czech Republic Belgium Netherlands Argentina Japan South Korea Finland Hungary Hong Kong Sweden Russia Switzerland Germany Israel Thailand Singapore Ireland Philippines Poland Luxembourg Peru USA Malaysia Australia Canada New Zealand Indonesia
Latin America Europe Latin America Africa the Middle East Europe Europe Asia Europe Europe Europe Europe Europe Asia Asia Europe the Middle East Latin America Europe Europe Europe Latin America Asia Asia Europe Europe Asia Europe Europe Europe Europe the Middle East Asia Asia Europe Asia Europe Europe Latin America North America Asia Oceana North America Oceana Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
46
Current Liabilities - Total (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value (total liabilities & equity = 100)
Rank
Percentile
Cuba Haiti Dominica Greenland Netherlands Antilles St. Pierre & Miquelon Bermuda Barbados Anguilla Antigua & Barbuda Puerto Rico Grenada Martinique Aruba St. Lucia Turks and Caicos Isl. Montserrat Bahamas Guadeloupe St. Vincent & The Grenadines Virgin Islands St. Kitts and Nevis British Virgin Islands USA Cayman Islands Canada Trinidad & Tobago Jamaica Dominican Republic
55.53 51.43 49.70 48.47 46.86 45.39 41.26 38.94 37.83 36.54 36.14 33.39 33.22 33.18 33.17 32.80 32.11 31.40 30.83 29.52 28.26 27.55 27.23 26.03 25.59 25.28 24.93 24.00 21.35
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
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
47
Long Term Debt Countries
Value (total liabilities & equity = 100)
Rank
Percentile
32.68 21.19 19.31 19.13 19.04 18.79 18.33 16.39 16.33 14.29 14.18 13.29 13.18 11.75 10.94 10.59 10.56 10.49 10.03 9.83 9.49 8.50 8.45 8.32 8.20 7.99 7.66 7.48 7.35 6.23 5.50 4.53 3.69 3.63 3.09 2.75 2.56 2.32 1.69 1.55 1.53
1 2 3 4 5 6 7 8 9 12 14 15 16 17 18 19 20 21 22 23 25 26 27 28 29 30 32 33 34 35 37 38 40 41 42 43 44 45 46 47 48
97.92 95.83 93.75 91.67 89.58 87.50 85.42 83.33 81.25 75.00 70.83 68.75 66.67 64.58 62.50 60.42 58.33 56.25 54.17 52.08 47.92 45.83 43.75 41.67 39.58 37.50 33.33 31.25 29.17 27.08 22.92 20.83 16.67 14.58 12.50 10.42 8.33 6.25 4.17 2.08 0.00
Region
_________________________________________________________________________________________________________
New Zealand Belgium Portugal Finland Thailand Netherlands Sweden Switzerland Norway USA Luxembourg Denmark Australia Canada Taiwan Turkey Mexico Austria Hungary Germany the United Kingdom South Korea Japan France Poland India Russia Italy Spain Indonesia Singapore South Africa Hong Kong China Greece Czech Republic Argentina Malaysia Peru Israel Ireland
Oceana Europe Europe Europe Asia Europe Europe Europe Europe North America Europe Europe Oceana North America Asia the Middle East Latin America Europe Europe Europe Europe Asia Asia Europe Europe Asia Europe Europe Europe Asia Asia Africa Asia Asia Europe Europe Latin America Asia Latin America the Middle East Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
48
Long Term Debt (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value (total liabilities & equity = 100)
Rank
Percentile
Greenland Netherlands Antilles St. Vincent & The Grenadines Jamaica USA Cayman Islands Bermuda Canada St. Pierre & Miquelon Turks and Caicos Isl. Guadeloupe Grenada St. Lucia Antigua & Barbuda Puerto Rico St. Kitts and Nevis Martinique Montserrat Trinidad & Tobago Aruba Barbados Anguilla Bahamas Virgin Islands British Virgin Islands Dominican Republic
19.31 18.66 18.13 14.74 14.29 14.04 13.37 11.75 10.39 9.32 8.76 8.66 8.60 8.44 8.35 7.83 7.67 7.42 7.09 3.54 2.63 2.56 1.56 1.41 1.35 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
96.15 92.31 88.46 84.62 80.77 76.92 73.08 69.23 65.38 61.54 57.69 53.85 50.00 46.15 42.31 38.46 34.62 30.77 26.92 23.08 19.23 15.38 11.54 7.69 3.85 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
49
Total Liabilities Countries
Value (total liabilities & equity = 100)
Rank
Percentile
67.94 67.25 67.09 66.15 64.53 64.47 63.76 63.36 61.47 60.67 60.17 60.05 58.24 57.68 57.21 57.04 56.88 56.64 56.35 53.05 52.06 51.92 51.65 50.71 50.38 49.75 49.19 48.53 45.83 45.42 45.32 44.29 43.73 41.26 40.01 39.43 38.81 37.78 37.07 35.30 35.01 31.52 30.75 29.75 29.13
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 30 31 32 34 35 38 39 40 42 43 44 45 46 47 48 49 51
98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 43.40 41.51 39.62 35.85 33.96 28.30 26.42 24.53 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 3.77
Region
_________________________________________________________________________________________________________
Portugal Belgium Austria Spain Italy Germany Brazil Netherlands Sweden Chile Denmark Norway France Finland Taiwan New Zealand Switzerland South Africa the United Kingdom Pakistan Turkey Mexico India Thailand Japan Greece Luxembourg South Korea China USA Hungary Czech Republic Russia Argentina Australia Canada Hong Kong Singapore Poland Israel Ireland Indonesia Peru Malaysia Philippines
Europe Europe Europe Europe Europe Europe Latin America Europe Europe Latin America Europe Europe Europe Europe Asia Oceana Europe Africa Europe the Middle East the Middle East Latin America Asia Asia Asia Europe Europe Asia Asia North America Europe Europe Europe Latin America Oceana North America Asia Asia Europe the Middle East Europe Asia Latin America Asia Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
50
Total Liabilities (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value (total liabilities & equity = 100)
Rank
Percentile
Greenland Netherlands Antilles Bermuda Cuba St. Pierre & Miquelon Dominica Haiti St. Vincent & The Grenadines Antigua & Barbuda Puerto Rico USA Cayman Islands Martinique Grenada Barbados Montserrat St. Lucia Turks and Caicos Isl. Anguilla Guadeloupe Canada Jamaica Aruba Bahamas St. Kitts and Nevis Virgin Islands Trinidad & Tobago British Virgin Islands Dominican Republic
67.94 65.67 60.53 58.48 54.35 52.34 52.27 48.28 48.20 47.68 45.42 44.64 43.82 42.56 42.47 42.36 42.27 42.12 41.26 39.59 39.43 39.25 37.22 35.65 35.38 32.09 32.01 30.92 24.05
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
51
Common Equity Countries
Value (total liabilities & equity = 100)
Rank
Percentile
70.87 69.29 69.25 64.70 64.69 64.17 60.19 59.97 59.11 56.07 54.68 53.58 50.89 50.04 49.10 48.70 48.32 47.94 47.81 46.95 45.09 44.72 44.36 42.27 42.12 42.01 41.92 41.54 40.96 39.82 39.57 39.49 38.36 36.79 36.37 36.33 34.89 34.43 34.23 34.03 32.76 32.56 32.09 32.06 31.17
1 2 3 4 5 6 8 10 11 12 13 14 15 16 17 18 19 20 21 22 25 26 28 29 30 31 32 33 35 36 37 38 39 41 42 43 44 45 46 47 48 49 50 51 52
98.11 96.23 94.34 92.45 90.57 88.68 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 52.83 50.94 47.17 45.28 43.40 41.51 39.62 37.74 33.96 32.08 30.19 28.30 26.42 22.64 20.75 18.87 16.98 15.09 13.21 11.32 9.43 7.55 5.66 3.77 1.89
Region
_________________________________________________________________________________________________________
Philippines Malaysia Peru Israel Indonesia Ireland Singapore Australia Hong Kong Canada Hungary USA China South Korea Thailand Japan India Turkey Mexico Pakistan Russia Poland Greece South Africa the United Kingdom Switzerland Taiwan New Zealand France Denmark Finland Czech Republic Norway Argentina Sweden Luxembourg Italy Brazil Germany Netherlands Chile Belgium Spain Portugal Austria
Asia Asia Latin America the Middle East Asia Europe Asia Oceana Asia North America Europe North America Asia Asia Asia Asia Asia the Middle East Latin America the Middle East Europe Europe Europe Africa Europe Europe Asia Oceana Europe Europe Europe Europe Europe Latin America Europe Europe Europe Latin America Europe Europe Latin America Europe Europe Europe Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
52
Common Equity (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value (total liabilities & equity = 100)
Rank
Percentile
Bahamas Virgin Islands Aruba British Virgin Islands Canada Dominican Republic USA Cayman Islands Turks and Caicos Isl. Antigua & Barbuda Puerto Rico Guadeloupe St. Vincent & The Grenadines Haiti Martinique Montserrat St. Kitts and Nevis Bermuda St. Pierre & Miquelon Grenada St. Lucia Trinidad & Tobago Jamaica Barbados Anguilla Greenland Cuba Netherlands Antilles Dominica
65.35 58.82 56.68 56.68 56.07 54.17 53.58 52.67 50.82 49.70 49.16 47.77 46.75 46.27 45.18 43.68 42.69 40.05 39.82 39.19 38.93 38.62 38.01 37.87 36.79 32.06 31.58 30.99 28.26
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
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
53
Retained Earnings Countries
Value (total liabilities & equity = 100)
Rank
Percentile
37.15 36.85 31.67 29.75 28.68 26.69 26.15 24.75 22.61 21.44 20.02 19.99 19.49 18.96 18.27 18.13 17.25 15.74 14.98 14.58 14.41 13.06 12.51 11.18 10.38 9.45 8.36 7.53 6.84 6.54 5.97 3.83 3.71 2.72 0.92 -1.89 -2.03 -2.28 -2.46 -2.47
1 2 3 4 5 6 7 8 10 11 12 13 14 15 17 18 19 20 21 22 23 25 26 28 30 31 32 34 35 36 37 38 39 40 41 43 44 45 47 48
97.92 95.83 93.75 91.67 89.58 87.50 85.42 83.33 79.17 77.08 75.00 72.92 70.83 68.75 64.58 62.50 60.42 58.33 56.25 54.17 52.08 47.92 45.83 41.67 37.50 35.42 33.33 29.17 27.08 25.00 22.92 20.83 18.75 16.67 14.58 10.42 8.33 6.25 2.08 0.00
Region
_________________________________________________________________________________________________________
Israel Ireland South Africa USA Philippines Hong Kong Switzerland Japan Luxembourg Malaysia Canada Indonesia the United Kingdom Finland Singapore Brazil Chile Austria Norway Australia Thailand New Zealand Denmark Spain Germany Netherlands South Korea Russia France Sweden Italy Portugal Taiwan China Peru Argentina Czech Republic Greece Mexico Turkey
the Middle East Europe Africa North America Asia Asia Europe Asia Europe Asia North America Asia Europe Europe Asia Latin America Latin America Europe Europe Oceana Asia Oceana Europe Europe Europe Europe Asia Europe Europe Europe Europe Europe Asia Asia Latin America Latin America Europe Europe Latin America the Middle East
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
54
Retained Earnings (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value (total liabilities & equity = 100)
Rank
Percentile
Bahamas Virgin Islands British Virgin Islands USA Cayman Islands Aruba Canada Cuba Dominica St. Vincent & The Grenadines Bermuda Jamaica Antigua & Barbuda Puerto Rico Martinique Montserrat Greenland Netherlands Antilles St. Pierre & Miquelon Dominican Republic Anguilla Barbados St. Lucia Grenada
37.53 33.78 32.55 29.75 29.24 25.59 20.02 16.63 14.88 13.72 12.59 11.15 8.30 8.21 7.55 7.30 3.83 3.70 3.52 0.72 -1.89 -1.95 -2.00 -2.02
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.4 3.4.1
55
FINANCIAL RETURNS IN DOMINICAN REPUBLIC: INCOME STRUCTURE RATIOS Overview
In this chapter we consider the income structure of companies operating in Dominican Republic benchmarked against global averages. The chapter begins by defining relevant terms. A common-size statement, or vertical analysis of income is then presented for the proto-typical firm involved in steam, gas and hydraulic turbines and turbine generator set units operating in Dominican Republic and the average global benchmarks (total revenue = 100 percent). For ratios where there are large deviations between Dominican Republic and the benchmarks, graphics are provided. Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key vertical analysis income ratios are highlighted across countries in the comparison group.
3.4.2
Income Statements – Definitions of Terms
The following definitions are provided for those less familiar with the income-side of financial statement analysis. As this chapter deals with the vertical analysis and global benchmarking of income, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •
Amortization. Amortization generally refers to the depreciation, depletion, or charge-off to expense of intangible and tangible assets over a period of time. Amortization is commonly understood to be the taking as an expense (writing off) of the loss of value of an intangible asset such as a copyright, a patent, or a mailing list, in an accounting period.
•
Cost of Goods Sold (excluding depreciation). For retail companies, cost of goods sold is generally defined as the equivalent of starting inventory plus purchases minus ending inventory. In manufacturing, cost of goods sold is defined to equal the starting inventory plus the cost of goods manufactured minus ending inventory. Most pure service firms do not generally have cost of goods sold.
•
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.
•
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.
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Financial Indicators
56
•
Gross Income. Gross income is commonly defined as all the money, goods, and property received by the company that must be included as taxable income.
•
Income Taxes. Income taxes are defined to include those taxes levied by state, federal, and local governments on the company's reported accounting profit. Income taxes generally include both deferred and paid taxes. They are generally determined after the interest expense has been deducted.
•
Interest Expense on Debt. Interest expenses on debt are those which are spent on current debt and added to the net income so avoid underestimating interest coverage.
•
Net Income Available to Common. Net income available to common is defined as the net income available to common stockholders.
•
Net Income Before Preferred Dividends. Net income before preferred dividends is generally calculated as the difference between total revenues and total expense prior to the granting of preferred dividends.
•
Net Sales or Revenues. Revenues or net sales are defined as payments made to and received by an entity. May take the form of taxes, user fees, fines, fees for service, and so on.
•
Operating Income. Operating income is generally defined to equal operating revenues less operating expenses. It typically excludes items of other revenue and expense such as equity in earnings of unconsolidated companies, dividends, interest income and expense, income taxes, extraordinary items, and cumulative effect of accounting changes.
•
Pretax Income. Pretax income is generally defined as income before tax deductions.
•
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
57
Income Structure: Outlook
Using the methodology described in the introduction, the following table summarizes income structure benchmarks for firms involved in steam, gas and hydraulic turbines and turbine generator set units in Dominican Republic. To allow comparable benchmarking, a common index of Net Sales or Revenues = 100 is used. All figures are currentyear projections for companies operating in Dominican Republic based on latest financial results available. Income Structure Dominican Republic North America World Avg. _________________________________________________________________________________________________________
Net Sales or Revenues Cost of Goods Sold (Excluding Depreciation) Depreciation, Depletion & Amortization Gross Income Selling, General & Administrative Expenses Operating Income Other Income/Expense Net Earnings Before Interest and Taxes (EBIT) Interest Expense on Debt Pretax Income Income Taxes Net Income Before Extra Items/Prefer Dividends Net Income Before Preferred Dividends Net Income Available to Common
100.00 56.72 2.43 19.06 20.55 0.54 1.58 2.12 1.14 0.98 0.13 0.85 0.85 0.85
100.00 67.29 4.37 18.23 14.15 4.75 1.06 8.04 4.32 3.83 1.21 2.66 2.61 2.66
100.00 69.36 4.50 16.64 9.33 6.55 1.48 9.61 3.64 6.00 1.70 4.29 4.43 4.29
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.4.4
58
Large Variances: Income
The following graphics summarize for steam, gas and hydraulic turbines and turbine generator set units the large income structure gaps between firms operating in Dominican Republic and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.
Gap: Cost of Goods Sold (Excluding Depreciation) 80
56.72
60
67.29
69.36
40 20 0
-12.64
-20 Dom inican Republic
North Am erica
World Average
Gap
Gap: Depreciation, Depletion & Amortization 6
4.37
4
4.5
2.43
2 0 -2
-2.07
-4 Dom inican Republic
North Am erica
World Average
Gap
Gap: Gross Income 19.06
20
18.23
16.64
15 10 5
2.42
0 Dom inican Republic
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North Am erica
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
59
Gap: Selling, General & Administrative Expenses 25
20.55
20
14.15
15
9.33
10
11.22
5 0 Dom inican Republic
North Am erica
World Average
Gap
Gap: Operating Income 10 4.75
5
6.55
0.54
0 -5
-6.01
-10 Dom inican Republic
North Am erica
World Average
Gap
Gap: Earnings Before Interest and Taxes (EBIT) 8.04
10 5
9.61
2.12
0 -5
-7.49
-10 Dom inican Republic
North Am erica
World Average
Gap
Gap: Interest Expense on Debt 6
4.32
4
3.64
1.14
2 0 -2
-2.5
-4 Dom inican Republic
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North Am erica
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
60
Gap: Pretax Income 6
6 4 2 0 -2 -4 -6
3.83 0.98
-5.02 Dom inican Republic
North Am erica
World Average
Gap
Gap: Net Income Before Extra Items/Prefer Dividends 6
4.29
4
2.66
2
0.85
0 -2 -3.44
-4 Dom inican Republic
North Am erica
World Average
Gap
Gap: Net Income Before Preferred Dividends 6
4.43
4
2.61
2
0.85
0 -2 -4 Dom inican Republic
North Am erica
World Average
-3.58 Gap
Gap: Net Income Available to Common 6
4.29
4
2.66
2
0.85
0 -2 -3.44
-4 Dom inican Republic
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North Am erica
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
3.4.5
61
Key Percentiles and Rankings
We now consider the distribution of income ratios for steam, gas and hydraulic turbines and turbine generator set units using ranks and percentiles. What percent of countries have a value lower or higher than Dominican Republic (what is the ratio's rank or percentile)? The table below answers this question with respect to the vertical analysis of income structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key vertical income ratios are highlighted in additional tables. Income Structure
Dominican Republic
Rank of Total
Percentile
100.00 56.72 2.43 19.06 20.55 0.54 1.58 2.12 1.14 0.98 0.13 0.85 0.85 0.85
51 of 53 50 of 54 29 of 53 10 of 47 52 of 54 19 of 54 50 of 54 41 of 54 49 of 54 46 of 48 44 of 54 44 of 54 44 of 54
3.77 7.41 45.28 78.72 3.70 64.81 7.41 24.07 9.26 4.17 18.52 18.52 18.52
_________________________________________________________________________________________________________
Net Sales or Revenues Cost of Goods Sold (Excluding Depreciation) Depreciation, Depletion & Amortization Gross Income Selling, General & Administrative Expenses Operating Income Other Income/Expense Net Earnings Before Interest and Taxes (EBIT) Interest Expense on Debt Pretax Income Income Taxes Net Income Before Extra Items/Prefer Dividends Net Income Before Preferred Dividends Net Income Available to Common
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
62
Cost of Goods Sold (Excluding Depreciation) Countries
Value (total revenue = 100)
Rank
Percentile
90.62 89.40 88.70 88.31 87.88 85.34 83.94 82.83 80.14 79.88 78.96 77.69 77.62 76.49 76.48 76.47 75.55 74.93 74.02 73.34 73.18 73.11 72.79 72.53 72.22 71.69 70.30 70.28 70.19 69.67 69.56 69.10 68.44 68.41 67.89 67.33 67.16 64.58 63.43 63.25 62.95 62.88 62.58 58.30
1 2 3 4 5 6 7 8 10 11 12 13 14 16 17 18 19 20 21 23 24 25 26 27 28 29 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 50
98.08 96.15 94.23 92.31 90.38 88.46 86.54 84.62 80.77 78.85 76.92 75.00 73.08 69.23 67.31 65.38 63.46 61.54 59.62 55.77 53.85 51.92 50.00 48.08 46.15 44.23 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 15.38 13.46 11.54 9.62 3.85
Region
_________________________________________________________________________________________________________
Philippines Belgium New Zealand Portugal Taiwan Denmark India France South Korea Spain Hungary South Africa Norway Austria Finland Australia Singapore Indonesia Canada Germany China Brazil Switzerland Peru Russia Japan Greece Netherlands Thailand Sweden Chile the United Kingdom Hong Kong Malaysia Israel Ireland Italy Poland Turkey Mexico Luxembourg USA Czech Republic Argentina
Asia Europe Oceana Europe Asia Europe Asia Europe Asia Europe Europe Africa Europe Europe Europe Oceana Asia Asia North America Europe Asia Latin America Europe Latin America Europe Asia Europe Europe Asia Europe Latin America Europe Asia Asia the Middle East Europe Europe Europe the Middle East Latin America Europe North America Europe Latin America
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
63
Cost of Goods Sold (Excluding Depreciation) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value (total revenue = 100)
Rank
Percentile
Greenland Bermuda Netherlands Antilles St. Pierre & Miquelon Antigua & Barbuda Puerto Rico Canada Turks and Caicos Isl. Martinique Montserrat Guadeloupe Bahamas Cuba St. Vincent & The Grenadines Aruba USA Cayman Islands Virgin Islands St. Kitts and Nevis Dominica Barbados British Virgin Islands Anguilla Dominican Republic Trinidad & Tobago Jamaica Grenada St. Lucia
88.31 85.85 85.36 83.49 79.60 78.73 74.02 73.38 72.36 69.95 68.98 68.57 67.05 66.82 65.63 62.88 61.81 61.72 61.64 60.02 60.01 59.47 58.30 56.72 55.77 54.33 51.85 51.50
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
96.43 92.86 89.29 85.71 82.14 78.57 75.00 71.43 67.86 64.29 60.71 57.14 53.57 50.00 46.43 42.86 39.29 35.71 32.14 28.57 25.00 21.43 17.86 14.29 10.71 7.14 3.57 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
64
Selling, General & Administrative Expenses Countries
Value (total revenue = 100)
Rank
Percentile
28.49 28.26 26.51 26.27 25.90 25.12 22.54 21.79 20.82 19.42 18.12 18.08 17.87 17.85 17.15 16.96 16.58 16.50 15.50 14.65 14.27 13.83 12.73 12.54 11.16 10.41 10.40 10.21 9.92 9.39 9.27 8.72 8.51 8.37 8.35 8.29 7.97 6.46 0.93
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 18 19 20 22 23 24 26 27 28 29 30 31 32 33 34 35 36 38 39 40 41 42 45
97.83 95.65 93.48 91.30 89.13 86.96 84.78 82.61 80.43 78.26 76.09 73.91 71.74 69.57 67.39 65.22 60.87 58.70 56.52 52.17 50.00 47.83 43.48 41.30 39.13 36.96 34.78 32.61 30.43 28.26 26.09 23.91 21.74 17.39 15.22 13.04 10.87 8.70 2.17
Region
_________________________________________________________________________________________________________
Israel Ireland Netherlands Peru USA the United Kingdom Sweden Italy Japan South Africa Turkey Mexico Thailand Finland Germany Canada Hong Kong Switzerland China France Luxembourg Malaysia Norway Greece Czech Republic Hungary Argentina Denmark Austria Australia South Korea Taiwan Poland Brazil Russia Singapore Chile Indonesia Philippines
the Middle East Europe Europe Latin America North America Europe Europe Europe Asia Africa the Middle East Latin America Asia Europe Europe North America Asia Europe Asia Europe Europe Asia Europe Europe Europe Europe Latin America Europe Europe Oceana Asia Asia Europe Latin America Europe Asia Latin America Asia Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
65
Selling, General & Administrative Expenses (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value (total revenue = 100)
Rank
Percentile
Bahamas Virgin Islands USA Cayman Islands British Virgin Islands Dominican Republic St. Vincent & The Grenadines Canada Aruba Grenada St. Lucia Jamaica Barbados Anguilla Bermuda Turks and Caicos Isl. Antigua & Barbuda Puerto Rico Guadeloupe Martinique St. Pierre & Miquelon St. Kitts and Nevis Montserrat Cuba Trinidad & Tobago Dominica
28.78 25.90 25.90 25.46 24.96 20.55 17.02 16.96 15.90 14.82 14.72 13.83 10.71 10.40 10.27 9.67 9.21 9.11 9.09 8.37 8.29 8.12 8.09 7.68 7.35 6.87
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
96.15 92.31 88.46 84.62 80.77 76.92 73.08 69.23 65.38 61.54 57.69 53.85 50.00 46.15 42.31 38.46 34.62 30.77 26.92 23.08 19.23 15.38 11.54 7.69 3.85 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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©2007 Icon Group International, Inc.
Financial Indicators
66
Operating Income Countries
Value (total revenue = 100)
Rank
Percentile
13.67 11.79 11.49 11.22 11.15 11.12 11.05 9.82 8.69 8.64 8.46 7.86 7.83 7.64 7.42 7.41 7.00 6.96 6.87 6.52 6.45 6.40 6.27 6.10 5.94 5.61 5.30 5.16 4.51 3.95 3.86 3.72 3.67 3.52 3.17 2.78 2.54 2.12 1.73 1.50 1.39 0.95 0.69 -2.29 -2.31
1 2 3 4 5 6 7 10 11 12 13 15 16 17 18 19 20 21 22 23 24 25 27 28 29 30 31 32 34 35 36 38 39 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 81.13 79.25 77.36 75.47 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 41.51 39.62 35.85 33.96 32.08 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
_________________________________________________________________________________________________________
Spain Brazil Indonesia Chile Turkey Mexico Hong Kong Singapore South Africa India Malaysia Greece Netherlands New Zealand USA Canada Czech Republic South Korea Pakistan Argentina the United Kingdom Italy Russia France Belgium Sweden China Norway Thailand Japan Finland Portugal Switzerland Austria Luxembourg Denmark Germany Hungary Poland Philippines Taiwan Australia Peru Ireland Israel
Europe Latin America Asia Latin America the Middle East Latin America Asia Asia Africa Asia Asia Europe Europe Oceana North America North America Europe Asia the Middle East Latin America Europe Europe Europe Europe Europe Europe Asia Europe Asia Asia Europe Europe Europe Europe Europe Europe Europe Europe Europe Asia Asia Oceana Latin America Europe the Middle East
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Financial Indicators
67
Operating Income (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value (total revenue = 100)
Rank
Percentile
Cuba Aruba Dominica Grenada St. Lucia USA Canada Cayman Islands Antigua & Barbuda Puerto Rico Haiti Barbados Anguilla Martinique Montserrat St. Vincent & The Grenadines Greenland Netherlands Antilles Jamaica Bermuda Turks and Caicos Isl. Guadeloupe St. Kitts and Nevis Trinidad & Tobago St. Pierre & Miquelon Dominican Republic British Virgin Islands Virgin Islands Bahamas
10.82 10.60 9.68 9.12 9.06 7.42 7.41 7.30 6.91 6.83 6.77 6.71 6.52 6.28 6.07 4.29 3.72 3.59 3.49 2.80 1.97 1.85 1.66 1.50 1.32 0.54 -2.02 -2.10 -2.33
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
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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©2007 Icon Group International, Inc.
Financial Indicators
68
Earnings Before Interest and Taxes (EBIT) Countries
Value (total revenue = 100)
Rank
Percentile
35.95 35.85 27.11 25.79 13.70 13.08 11.65 11.48 10.85 10.78 10.66 9.91 9.81 9.08 8.82 7.99 7.82 7.73 7.59 7.56 7.53 7.39 7.34 7.32 6.82 6.68 6.66 6.61 6.36 6.06 5.61 5.49 4.89 4.71 4.07 3.73 3.16 3.04 3.00 2.78 2.71 2.45 2.04 -1.63 -1.65
1 2 4 5 6 7 8 9 10 11 12 14 15 16 18 19 20 22 23 24 25 26 27 28 29 31 32 33 35 36 38 39 40 41 42 43 44 45 46 47 48 49 50 52 53
98.11 96.23 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 77.36 73.58 71.70 69.81 66.04 64.15 62.26 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 41.51 39.62 37.74 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 1.89 0.00
Region
_________________________________________________________________________________________________________
Turkey Mexico Brazil Chile Spain Greece Czech Republic India Argentina Indonesia Malaysia Singapore Hong Kong New Zealand South Africa Italy Netherlands Thailand USA Canada France China South Korea Norway the United Kingdom Pakistan Sweden Russia Finland Taiwan Germany Austria Portugal Switzerland Luxembourg Belgium Denmark Australia Hungary Japan Peru Poland Philippines Ireland Israel
the Middle East Latin America Latin America Latin America Europe Europe Europe Asia Latin America Asia Asia Asia Asia Oceana Africa Europe Europe Asia North America North America Europe Asia Asia Europe Europe the Middle East Europe Europe Europe Asia Europe Europe Europe Europe Europe Europe Europe Oceana Europe Asia Latin America Europe Asia Europe the Middle East
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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©2007 Icon Group International, Inc.
Financial Indicators
69
Earnings Before Interest and Taxes (EBIT) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value (total revenue = 100)
Rank
Percentile
Grenada St. Lucia Cuba Dominica Barbados Anguilla Aruba USA Canada Cayman Islands St. Vincent & The Grenadines Antigua & Barbuda Puerto Rico Martinique Haiti Montserrat Jamaica St. Pierre & Miquelon Greenland Netherlands Antilles Bermuda Turks and Caicos Isl. Guadeloupe St. Kitts and Nevis Trinidad & Tobago Dominican Republic British Virgin Islands Virgin Islands Bahamas
29.39 29.19 24.86 22.25 11.17 10.85 9.41 7.59 7.56 7.46 7.36 7.29 7.21 6.62 6.58 6.40 5.98 5.76 4.89 4.73 3.18 2.79 2.62 2.34 2.12 2.12 -1.44 -1.50 -1.66
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
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
70
Pretax Income Countries
Value (total revenue = 100)
Rank
Percentile
15.44 14.69 13.06 11.91 10.76 9.67 9.58 9.47 9.21 9.11 8.92 7.87 7.25 6.56 6.43 6.27 6.02 5.99 5.76 5.73 5.72 5.45 5.07 5.04 4.74 4.57 4.34 4.29 4.15 3.43 3.39 3.35 2.97 2.46 2.14 1.83 1.39 1.30 1.29 1.25 1.05 -1.98 -1.99 -6.48 -6.50
1 2 3 4 5 6 7 8 9 10 11 14 15 16 18 19 20 21 22 23 24 25 27 28 30 32 33 34 35 36 37 38 39 40 41 42 44 45 46 47 48 49 50 52 53
98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 73.58 71.70 69.81 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 49.06 47.17 43.40 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 16.98 15.09 13.21 11.32 9.43 7.55 5.66 1.89 0.00
Region
_________________________________________________________________________________________________________
Brazil Chile Spain Hong Kong Greece India Czech Republic Malaysia Singapore Indonesia Argentina South Africa New Zealand Canada USA Thailand France Italy Netherlands Norway the United Kingdom Pakistan South Korea China Sweden Russia Finland Germany Austria Switzerland Portugal Taiwan Luxembourg Belgium Japan Philippines Denmark Australia Hungary Peru Poland Ireland Israel Mexico Turkey
Latin America Latin America Europe Asia Europe Asia Europe Asia Asia Asia Latin America Africa Oceana North America North America Asia Europe Europe Europe Europe Europe the Middle East Asia Asia Europe Europe Europe Europe Europe Europe Europe Asia Europe Europe Asia Asia Europe Oceana Europe Latin America Europe Europe the Middle East Latin America the Middle East
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
71
Pretax Income (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value (total revenue = 100)
Rank
Percentile
Cuba Dominica Aruba Barbados Anguilla Canada USA Cayman Islands St. Vincent & The Grenadines Haiti Antigua & Barbuda Puerto Rico Jamaica Martinique Montserrat Greenland Netherlands Antilles St. Pierre & Miquelon Bermuda Turks and Caicos Isl. Guadeloupe St. Kitts and Nevis Dominican Republic Trinidad & Tobago British Virgin Islands Virgin Islands Bahamas St. Lucia Grenada
14.16 12.67 11.42 9.19 8.92 6.56 6.43 6.32 5.97 5.37 5.04 4.98 4.85 4.58 4.43 3.39 3.28 3.19 1.40 1.20 1.13 1.01 0.98 0.91 -1.75 -1.81 -2.01 -5.28 -5.31
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
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
72
Income Taxes Countries
Value (total revenue = 100)
Rank
Percentile
5.16 4.60 4.28 4.19 4.09 3.89 3.09 3.05 2.82 2.81 2.51 2.23 2.12 2.09 2.01 1.90 1.85 1.76 1.72 1.50 1.39 1.38 1.35 1.29 1.24 1.24 1.23 1.08 1.08 1.06 0.91 0.87 0.83 0.79 0.74 0.42 0.42 0.26 0.17 0.01
1 2 3 4 5 6 8 9 10 11 13 14 15 16 18 19 20 21 22 23 24 25 26 27 29 30 31 32 33 34 35 36 37 38 39 42 43 44 45 46
97.87 95.74 93.62 91.49 89.36 87.23 82.98 80.85 78.72 76.60 72.34 70.21 68.09 65.96 61.70 59.57 57.45 55.32 53.19 51.06 48.94 46.81 44.68 42.55 38.30 36.17 34.04 31.91 29.79 27.66 25.53 23.40 21.28 19.15 17.02 10.64 8.51 6.38 4.26 2.13
Region
_________________________________________________________________________________________________________
Greece Czech Republic Argentina Spain Brazil Chile Italy India Malaysia Indonesia South Africa Belgium France USA Norway the United Kingdom Sweden Canada Netherlands Austria Singapore South Korea Germany Finland New Zealand Russia Japan Hong Kong Portugal Switzerland Luxembourg Australia Thailand Denmark China Israel Ireland Taiwan Peru Philippines
Europe Europe Latin America Europe Latin America Latin America Europe Asia Asia Asia Africa Europe Europe North America Europe Europe Europe North America Europe Europe Asia Asia Europe Europe Oceana Europe Asia Asia Europe Europe Europe Oceana Asia Europe Asia the Middle East Europe Asia Latin America Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
73
Income Taxes (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value (total revenue = 100)
Rank
Percentile
Barbados Anguilla Cuba Dominica USA Cayman Islands Canada Antigua & Barbuda Puerto Rico Martinique Montserrat Greenland Netherlands Antilles Aruba Bermuda St. Vincent & The Grenadines Jamaica Bahamas Virgin Islands British Virgin Islands St. Pierre & Miquelon Dominican Republic
4.41 4.28 3.75 3.36 2.09 2.05 1.76 1.37 1.35 1.25 1.20 1.08 1.04 1.04 0.80 0.79 0.64 0.43 0.39 0.37 0.25 0.13
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
95.45 90.91 86.36 81.82 77.27 72.73 68.18 63.64 59.09 54.55 50.00 45.45 40.91 36.36 31.82 27.27 22.73 18.18 13.64 9.09 4.55 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.5 3.5.1
74
FINANCIAL RETURNS IN DOMINICAN REPUBLIC: PROFITABILITY RATIOS Overview
In this chapter we consider additional financial ratios estimated for firms involved in steam, gas and hydraulic turbines and turbine generator set units operating in Dominican Republic benchmarked against global averages. The chapter begins by defining relevant terms. Estimates are then presented for the proto-typical firm operating in Dominican Republic compared to average global benchmarks. For ratios where there are large deviations between the average firm in Dominican Republic and the benchmarks, graphics are provided. Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key ratios are highlighted across countries in the comparison group.
3.5.2
Ratios – Definitions of Terms
The following definitions are provided for those less familiar with financial ratio analysis. As this chapter deals with the global benchmarking of ratios, only definitions covering certain terms used in this chapter’s tables and graphs are provided here . The glossary below reflects commonly accepted definitions across various countries and official sources. •
Accounts Receivables Days. The number of days' receivable sales generally correlates to the amount of the accounts receivables to the average daily sales on account. Accounts receivables days is often determined by dividing the gross receivables by (net sales/365).
•
Cash Earnings Return On Equity (%). Cash earnings return on equity generally measures the return of revenues to the shareholders. This ratio is generally calculated by dividing (net income before nonrecurring items minus preferred dividends) by the average common equity.
•
Cash Flow. Cash flow is generally defined as being equal to the company's net income plus the charge-off amounts for depreciation, depletion, amortization, extraordinary charges to reserves. These are bookkeeping deductions which are not paid out as cash.
•
Current Ratio. The current ratio is generally defined as a ratio of liquidity measuring the ability of a business to pay its current obligations when due. The current ratio is generally calculated by dividing total current assets by total current liabilities. Managers and lenders often want the current ratio to be 2.00 or greater. This ratio is often seen as an indication of short-term debt-paying ability. The higher the ratio, the more liquid the company.
•
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.
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Financial Indicators
75
•
Inventories (# of Days) Held. Inventory days held is generally determined by dividing the ending inventory by (the cost of goods held/365). The number of days held results in the average daily cost of goods held.
•
Inventory Turnover (%). Inventory turnover is used as a measure of the balance of inventory. It generally compares the amount of inventory with the total sales for the year. The ratio can reflect both on the quality of the inventory and the efficiency of management. Typically, the higher the turnover rate, the greater the likelihood that profits would be larger and less working capital bound up in inventory.
•
Net Margin (%). The net margin is the ratio of net income dollars generated by each dollar of sales.
•
Operating Profit Margin (%). Operating profit margin percent is the ratio of operating profit to net sales. Operating profit (loss) is income or loss before taxes calculated by the difference between total revenues and total expense disregarding the effects of any extraordinary transactions.
•
Quick Ratio. The quick ratio, also commonly known as the “acid test ratio”, is a refined current ratio and is often seen as a more conservative measure of liquidity. The quick ratio is generally determined by dividing cash and equivalents plus trade receivables by total current liabilities. The ratio shows the degree to which a company's current liabilities can be covered by the most liquid current assets. Financial management texts generally conclude that any value of less than 1 to 1 implies a reciprocal dependency on inventory or other current assets to liquidate short-term debt.
•
Reinvestment Rate - Total (%). The reinvestment rate is typically defined as the rate at which an investor assumes interest payments made on a debt security can be reinvested over the life of that security.
•
Return on Assets (%). Return on assets is generally used to measure a company's ability to use assets to create profit.
•
Return on Equity - Total (%). The return on total equity ratio is often seen to reflect the profitability of the company's operations after income taxes. Return on equity is often considered to be a good measure of the company's profitability. Tax laws and tax loss carryovers can affect the net income and therefore can also affect the return on equity.
•
Return on Invested Capital (%). The ratio of return on invested capital is typically defined as an evaluation of earnings performance without regard to the method of financing. This ratio measures the earnings on investment and is an indication of how well the company utilizes its asset base. Return on investment is a type of return on capital, therefore this ratio can be an indication of the company’s ability to reward investors who provide long-term funds and to attract future investors.
•
Tax Rate (%). The tax rate is typically defined as the average rate of domestic tax owed to government by the company.
•
Working Capital. Net working capital equals the difference between total current assets and total current liabilities. Working capital often reflects a company's ability to expand volume and meet obligations. Since growth is usually one goal, the amount of working capital on this year's balance sheet should be greater than that of the previous year's. This is an efficiency, or turnover, ratio which benchmarks the rate at which current assets less current liabilities are used by the company in making sales. A low ratio can indicate a less profitable use of working capital in making sales. On the other hand, a very high ratio can indicate the company is wasting current assets which could be more efficiently deployed in production and in increasing 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
76
Ratio Structure: Outlook
Using the methodology described in the introduction, the following table summarizes ratio structure benchmarks for firms involved in steam, gas and hydraulic turbines and turbine generator set units in Dominican Republic. All figures are current-year projections for companies operating in Dominican Republic based on latest financial results available. Ratios Dominican Republic North America 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 (%) Tax Rate (%) Net Margin (%) Total Asset Turnover (X) th USD Asset Utilization Inventory Turnover (%) Net Sales % Working Capital Capital Expenditure % Gross Fixed Assets Capital Expenditure % Total Assets Capital Expenditure % Total Sales Accumulated Depreciation % Gross Fixed Assets Leverage Total Debt % Total Capital Long Term Debt % Total Capital Equity % Total Capital 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
1.59 1.59 1.68 2.53 8.00 4.10 56.72 19.06 20.55 0.54 -1.13 0.98 16.30 0.85 1.15
8.44 5.39 6.57 9.31 0.21 6.32 67.29 18.23 12.51 4.75 11.91 3.83 22.09 2.61 1.00
11.23 4.31 7.52 11.23 13.86 8.76 69.36 16.64 8.76 6.55 13.01 6.00 22.52 4.43 0.97
2.19 2.74 1.38 2.60 1.74 54.92
5.45 2.84 20.75 5.67 8.12 43.12
5.42 0.95 13.04 4.74 7.07 43.04
14.49 1.74 76.48 1.42 30.95 48.25
26.08 13.45 75.37 14.24 74.16 32.17
23.33 11.25 79.34 61.22 67.16 33.69
0.92 2.26 3.21 29.87 44.14 74.39 130.10
1.27 1.87 15.37 42.32 29.56 96.97 82.54
1.20 1.75 18.14 44.00 27.67 110.57 99.11
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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©2007 Icon Group International, Inc.
Financial Indicators
3.5.4
77
Large Variances: Ratios
The following graphics summarize for steam, gas and hydraulic turbines and turbine generator set units the large ratio structure gaps between firms operating in Dominican Republic and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.
Gap: Cost Goods Sold / Sales (%) 80
56.72
60
67.29
69.36
40 20 0
-12.64
-20 Dom inican Republic
North Am erica
World Average
Gap
Gap: Operating Inc / Total Capital (%) 15 10 5 0 -5 -10 -15
11.91
13.01
1.13
-11.88 Dom inican Republic
North Am erica
World Average
Gap
Gap: Accumulated Depreciation % Gross Fixed Assets 54.92
60 50 40 30 20 10 0
43.12
43.04
11.88
Dom inican Republic
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North Am erica
World Average
Gap
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Financial Indicators
78
Gap: Fixed Charge Coverage Ratio 100
61.22
50
1.42
0
14.24
-50
-59.8
-100 Dom inican Republic
North Am erica
World Average
Gap
Gap: Fixed Assets % Common Equity 74.16
80 60 40 20 0 -20 -40
67.16
30.95
Dom inican Republic
North Am erica
World Average
-36.21 Gap
Gap: Working Capital % Total Capital 48.25
50 40
32.17
33.69
30 20
14.56
10 0 Dom inican Republic
North Am erica
World Average
Gap
Gap: Cash & Equivalents % Total Current Assets 20
15.37
10
18.14
3.21
0 -10
-14.93
-20 Dom inican Republic
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North Am erica
World Average
Gap
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Financial Indicators
79
Gap: Receivables % Total Current Assets 50 40 30 20 10 0 -10 -20
42.32
44
29.87
-14.13 Dom inican Republic
North Am erica
World Average
Gap
Gap: Inventories % Total Current Assets 50
44.14
40
29.56
30
27.67 16.47
20 10 0 Dom inican Republic
North Am erica
World Average
Gap
Gap: Accounts Receivables Days 150 100
74.39
96.97
110.57
50 0 -36.18
-50 Dom inican Republic
North Am erica
World Average
Gap
Gap: Inventories (# of Days) Held 150
130.1
100
82.54
99.11
50
30.99
0 Dom inican Republic
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North Am erica
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
3.5.5
80
Key Percentiles and Rankings
We now consider the distribution of financial ratios for steam, gas and hydraulic turbines and turbine generator set units using ranks and percentiles. What percent of countries have a value lower or higher than Dominican Republic (what is the ratio's rank or percentile)? The table below answers this question with respect to financial ratios. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance. After the summary table below, a few key financial ratios are highlighted in additional tables. Ratios
Dominican Republic
Rank of Total
Percentile
1.59 1.59 1.68 2.53 8.00 4.10 56.72 19.06 20.55 0.54 -1.13 0.98 16.30 0.85 1.15
46 of 54 43 of 54 50 of 54 49 of 54 47 of 54 46 of 54 51 of 53 29 of 53 6 of 47 52 of 54 53 of 54 49 of 54 40 of 48 44 of 54 22 of 54
14.81 20.37 7.41 9.26 12.96 14.81 3.77 45.28 87.23 3.70 1.85 9.26 16.67 18.52 59.26
2.19 2.74 1.38 2.60 1.74 54.92
54 of 54 44 of 54 50 of 50 50 of 54 49 of 54 16 of 50
0.00 18.52 0.00 7.41 9.26 68.00
14.49 1.74 76.48 1.42 30.95 48.25
45 of 54 49 of 49 30 of 54 49 of 54 45 of 54 13 of 54
16.67 0.00 44.44 9.26 16.67 75.93
0.92 2.26 3.21 29.87 44.14 74.39 130.10
45 of 54 14 of 54 48 of 54 51 of 54 8 of 54 39 of 54 7 of 54
16.67 74.07 11.11 5.56 85.19 27.78 87.04
_________________________________________________________________________________________________________
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 (%) Tax Rate (%) Net Margin (%) Total Asset Turnover (X) th USD Asset Utilization Inventory Turnover (%) Net Sales % Working Capital Capital Expenditure % Gross Fixed Assets Capital Expenditure % Total Assets Capital Expenditure % Total Sales Accumulated Depreciation % Gross Fixed Assets Leverage Total Debt % Total Capital Long Term Debt % Total Capital Equity % Total Capital 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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Financial Indicators
81
Gross Profit Margin (%) Countries
Value
Rank
Percentile
USA Turkey Italy Mexico Israel Ireland the United Kingdom Hong Kong Sweden Netherlands Malaysia Japan Peru Germany Thailand Switzerland South Africa China Canada Brazil Greece Singapore Luxembourg Chile Finland Australia Austria Norway Indonesia Czech Republic Spain South Korea Argentina Russia France India Hungary Denmark Poland Portugal Taiwan Belgium New Zealand Philippines
32.95 29.28 29.27 29.20 28.66 28.43 27.60 27.47 26.24 25.80 25.29 24.37 24.36 22.73 22.57 22.47 21.38 21.33 21.30 20.35 19.74 19.63 19.43 19.37 19.31 19.19 19.14 18.87 17.67 17.57 17.29 16.48 16.37 14.85 13.40 12.57 12.50 10.84 10.22 10.08 9.82 8.31 7.64 2.42
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 30 31 32 34 36 37 39 40 42 43 44 45 46 47 48 50 51
98.08 96.15 94.23 92.31 90.38 88.46 86.54 84.62 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 42.31 40.38 38.46 34.62 30.77 28.85 25.00 23.08 19.23 17.31 15.38 13.46 11.54 9.62 7.69 3.85 1.92
Region
_________________________________________________________________________________________________________
North America the Middle East Europe Latin America the Middle East Europe Europe Asia Europe Europe Asia Asia Latin America Europe Asia Europe Africa Asia North America Latin America Europe Asia Europe Latin America Europe Oceana Europe Europe Asia Europe Europe Asia Latin America Europe Europe Asia Europe Europe Europe Europe Asia Europe Oceana Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
82
Gross Profit Margin (%) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value
Rank
Percentile
USA Cayman Islands Bahamas Aruba Virgin Islands British Virgin Islands Grenada St. Lucia St. Vincent & The Grenadines Canada Dominican Republic Cuba Jamaica Barbados Dominica Antigua & Barbuda Anguilla Puerto Rico Martinique Montserrat Turks and Caicos Isl. Guadeloupe Bermuda Greenland St. Kitts and Nevis Netherlands Antilles St. Pierre & Miquelon Trinidad & Tobago
32.95 32.39 28.95 26.34 26.06 25.11 23.93 23.77 21.48 21.30 19.06 18.67 17.47 16.85 16.71 16.37 16.37 16.19 14.88 14.39 11.61 10.92 10.91 10.08 9.75 9.75 9.33 8.83
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
96.43 92.86 89.29 85.71 82.14 78.57 75.00 71.43 67.86 64.29 60.71 57.14 53.57 50.00 46.43 42.86 39.29 35.71 32.14 28.57 25.00 21.43 17.86 14.29 10.71 7.14 3.57 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
83
Pretax Margin (%) Countries
Value
Rank
Percentile
Brazil Chile Spain Hong Kong Greece India Czech Republic Malaysia Singapore Indonesia Argentina South Africa New Zealand Canada USA Thailand France Italy Netherlands Norway the United Kingdom Pakistan South Korea China Sweden Russia Finland Germany Austria Switzerland Portugal Taiwan Luxembourg Belgium Japan Philippines Denmark Australia Hungary Peru Poland Ireland Israel Mexico Turkey
15.44 14.69 13.06 11.91 10.76 9.67 9.58 9.47 9.21 9.11 8.92 7.87 7.25 6.56 6.43 6.27 6.02 5.99 5.76 5.73 5.72 5.45 5.07 5.04 4.74 4.57 4.34 4.29 4.15 3.43 3.39 3.35 2.97 2.46 2.14 1.83 1.39 1.30 1.29 1.25 1.05 -1.98 -1.99 -6.48 -6.50
1 2 3 4 5 6 7 8 9 10 11 14 15 16 18 19 20 21 22 23 24 25 27 28 30 32 33 34 35 36 37 38 39 40 41 42 44 45 46 47 48 49 50 52 53
98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 83.02 81.13 79.25 73.58 71.70 69.81 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 49.06 47.17 43.40 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 16.98 15.09 13.21 11.32 9.43 7.55 5.66 1.89 0.00
Region
_________________________________________________________________________________________________________
Latin America Latin America Europe Asia Europe Asia Europe Asia Asia Asia Latin America Africa Oceana North America North America Asia Europe Europe Europe Europe Europe the Middle East Asia Asia Europe Europe Europe Europe Europe Europe Europe Asia Europe Europe Asia Asia Europe Oceana Europe Latin America Europe Europe the Middle East Latin America the Middle East
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
84
Pretax Margin (%) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value
Rank
Percentile
Cuba Dominica Aruba Barbados Anguilla Canada USA Cayman Islands St. Vincent & The Grenadines Haiti Antigua & Barbuda Puerto Rico Jamaica Martinique Montserrat Greenland Netherlands Antilles St. Pierre & Miquelon Bermuda Turks and Caicos Isl. Guadeloupe St. Kitts and Nevis Dominican Republic Trinidad & Tobago British Virgin Islands Virgin Islands Bahamas St. Lucia Grenada
14.16 12.67 11.42 9.19 8.92 6.56 6.43 6.32 5.97 5.37 5.04 4.98 4.85 4.58 4.43 3.39 3.28 3.19 1.40 1.20 1.13 1.01 0.98 0.91 -1.75 -1.81 -2.01 -5.28 -5.31
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
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
85
Quick Ratio Countries
Value
Rank
Percentile
Australia Hong Kong Malaysia Israel Ireland Indonesia Canada USA Singapore Japan Philippines South Korea Greece Germany Switzerland Norway France Russia Czech Republic India New Zealand Thailand Sweden Peru Finland Argentina Luxembourg Spain the United Kingdom Italy China Netherlands Denmark Portugal South Africa Belgium Turkey Mexico Austria Taiwan Pakistan Hungary Poland Brazil Chile
12.75 3.86 3.62 2.46 2.44 2.25 2.22 2.17 1.59 1.59 1.55 1.41 1.39 1.36 1.33 1.32 1.29 1.27 1.23 1.22 1.22 1.22 1.19 1.18 1.15 1.15 1.15 1.09 1.06 1.05 1.05 1.04 1.01 0.98 0.97 0.95 0.94 0.93 0.92 0.87 0.81 0.67 0.55 0.44 0.41
1 2 3 4 5 6 7 8 11 12 13 14 15 16 17 18 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 38 39 40 41 43 44 45 46 48 49 51 52 53
98.11 96.23 94.34 92.45 90.57 88.68 86.79 84.91 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 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 18.87 16.98 15.09 13.21 9.43 7.55 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Oceana Asia Asia the Middle East Europe Asia North America North America Asia Asia Asia Asia Europe Europe Europe Europe Europe Europe Europe Asia Oceana Asia Europe Latin America Europe Latin America Europe Europe Europe Europe Asia Europe Europe Europe Africa Europe the Middle East Latin America Europe Asia the Middle East Europe Europe Latin America Latin America
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
86
Quick Ratio (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value
Rank
Percentile
Aruba Bahamas Virgin Islands Canada USA British Virgin Islands Cayman Islands Antigua & Barbuda Puerto Rico Martinique Montserrat Barbados St. Vincent & The Grenadines Anguilla Bermuda Greenland Netherlands Antilles Jamaica Dominican Republic St. Pierre & Miquelon Haiti Grenada St. Lucia Turks and Caicos Isl. Guadeloupe St. Kitts and Nevis Trinidad & Tobago Cuba Dominica
3.70 2.49 2.24 2.22 2.17 2.16 2.13 1.40 1.39 1.28 1.23 1.18 1.16 1.15 1.01 0.98 0.95 0.94 0.92 0.83 0.79 0.77 0.76 0.62 0.58 0.52 0.47 0.40 0.36
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
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
87
Current Ratio Countries
Value
Rank
Percentile
Australia Hong Kong Malaysia Israel Ireland Indonesia USA Canada Peru New Zealand Germany Japan Singapore Denmark Switzerland Philippines Thailand Sweden France Finland Norway South Korea Greece Luxembourg Netherlands Russia the United Kingdom Italy South Africa India Czech Republic Portugal China Pakistan Argentina Spain Austria Belgium Taiwan Turkey Mexico Hungary Poland Brazil Chile
13.84 4.39 4.29 3.49 3.46 3.24 3.18 3.02 2.88 2.39 2.34 2.22 2.15 2.07 2.04 2.04 1.98 1.97 1.93 1.92 1.91 1.91 1.84 1.77 1.74 1.72 1.70 1.69 1.67 1.67 1.64 1.59 1.58 1.57 1.53 1.43 1.40 1.36 1.28 1.11 1.11 1.10 0.90 0.89 0.85
1 2 3 4 5 6 7 9 10 11 12 14 15 16 17 18 19 20 21 22 23 24 25 26 28 30 31 32 33 34 36 37 38 39 41 43 44 45 46 47 48 49 51 52 53
98.11 96.23 94.34 92.45 90.57 88.68 86.79 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 50.94 47.17 43.40 41.51 39.62 37.74 35.85 32.08 30.19 28.30 26.42 22.64 18.87 16.98 15.09 13.21 11.32 9.43 7.55 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Oceana Asia Asia the Middle East Europe Asia North America North America Latin America Oceana Europe Asia Asia Europe Europe Asia Asia Europe Europe Europe Europe Asia Europe Europe Europe Europe Europe Europe Africa Asia Europe Europe Asia the Middle East Latin America Europe Europe Europe Asia the Middle East Latin America Europe Europe Latin America Latin America
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
88
Current Ratio (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value
Rank
Percentile
Aruba Bahamas USA Virgin Islands Cayman Islands British Virgin Islands Canada Dominican Republic Bermuda Antigua & Barbuda St. Vincent & The Grenadines Puerto Rico Martinique Montserrat Greenland Barbados Haiti Netherlands Antilles Jamaica Anguilla St. Pierre & Miquelon Turks and Caicos Isl. Guadeloupe Grenada St. Lucia St. Kitts and Nevis Cuba Trinidad & Tobago Dominica
4.21 3.52 3.18 3.17 3.13 3.05 3.02 2.26 2.08 1.90 1.89 1.88 1.72 1.67 1.59 1.57 1.55 1.53 1.53 1.53 1.22 1.02 0.96 0.91 0.90 0.86 0.82 0.78 0.73
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
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
89
Inventories % Total Current Assets Countries
Value
Rank
Percentile
Peru Australia Pakistan New Zealand Brazil Denmark Chile South Africa Hungary Germany Netherlands Portugal Italy Finland Sweden Thailand the United Kingdom Poland Austria France Switzerland China USA Israel Belgium Ireland Norway Canada Luxembourg South Korea Hong Kong Singapore Indonesia Japan India Russia Philippines Spain Greece Czech Republic Malaysia Argentina Turkey Mexico Taiwan
56.44 49.39 48.44 48.09 47.35 46.27 45.06 42.47 39.32 39.11 38.32 38.16 37.62 37.10 36.08 34.00 33.43 32.16 32.15 31.98 31.03 30.92 30.79 30.38 30.35 30.13 30.07 27.49 26.84 26.48 26.38 25.75 24.80 24.75 24.10 23.86 23.58 22.32 21.05 18.74 18.69 17.46 15.84 15.80 14.86
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 25 26 27 28 30 31 32 33 35 36 37 39 40 41 43 44 46 47 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 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 39.62 37.74 33.96 32.08 30.19 26.42 24.53 22.64 18.87 16.98 13.21 11.32 7.55 5.66 3.77 1.89
Region
_________________________________________________________________________________________________________
Latin America Oceana the Middle East Oceana Latin America Europe Latin America Africa Europe Europe Europe Europe Europe Europe Europe Asia Europe Europe Europe Europe Europe Asia North America the Middle East Europe Europe Europe North America Europe Asia Asia Asia Asia Asia Asia Europe Asia Europe Europe Europe Asia Latin America the Middle East Latin America Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
90
Inventories % Total Current Assets (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value
Rank
Percentile
Haiti Bermuda Dominican Republic Cuba Dominica Greenland Netherlands Antilles Turks and Caicos Isl. Guadeloupe St. Vincent & The Grenadines USA St. Kitts and Nevis Bahamas Cayman Islands Trinidad & Tobago Virgin Islands Canada British Virgin Islands Jamaica Antigua & Barbuda Puerto Rico Aruba Martinique Montserrat Barbados Anguilla St. Pierre & Miquelon Grenada St. Lucia
47.74 46.55 44.14 43.43 38.87 38.16 36.89 36.54 34.35 32.37 30.79 30.69 30.69 30.27 27.77 27.62 27.49 26.61 26.32 26.30 26.01 25.30 23.91 23.11 17.97 17.46 14.12 12.95 12.86
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
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
91
Accounts Receivables Days Countries
Value
Rank
Percentile
Turkey Mexico Malaysia China Italy Greece Japan India Spain Israel Ireland Czech Republic France Argentina Portugal Peru Austria South Korea Singapore Netherlands Switzerland Norway Russia Germany Taiwan Denmark Sweden Hungary Hong Kong the United Kingdom Brazil Thailand Canada Finland Luxembourg Chile Philippines USA Belgium Poland Australia Indonesia New Zealand South Africa Pakistan
357.98 357.00 174.24 140.37 139.34 133.01 132.06 129.31 123.36 121.19 120.18 118.41 111.00 110.30 97.52 95.11 93.62 93.59 92.69 92.30 87.80 87.10 84.34 84.28 83.15 82.99 82.85 81.65 80.25 79.96 79.39 79.18 79.10 78.40 75.93 75.53 71.26 70.09 70.01 66.78 65.78 53.09 52.84 50.69 48.79
1 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 44 47 48 49 51
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 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 16.98 11.32 9.43 7.55 3.77
Region
_________________________________________________________________________________________________________
the Middle East Latin America Asia Asia Europe Europe Asia Asia Europe the Middle East Europe Europe Europe Latin America Europe Latin America Europe Asia Asia Europe Europe Europe Europe Europe Asia Europe Europe Europe Asia Europe Latin America Asia North America Europe Europe Latin America Asia North America Europe Europe Oceana Asia Oceana Africa the Middle East
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
92
Accounts Receivables Days (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value
Rank
Percentile
Grenada St. Lucia Bahamas Barbados Anguilla Virgin Islands British Virgin Islands Greenland Netherlands Antilles Antigua & Barbuda Puerto Rico Martinique Bermuda Montserrat Canada St. Pierre & Miquelon Aruba Turks and Caicos Isl. St. Vincent & The Grenadines Dominican Republic Cuba Guadeloupe USA Cayman Islands Dominica St. Kitts and Nevis Jamaica Trinidad & Tobago Haiti
292.63 290.68 122.41 113.55 110.30 110.17 106.16 97.52 94.27 92.96 91.94 84.51 83.49 81.69 79.10 79.00 76.95 75.88 75.38 74.39 72.81 71.33 70.09 68.89 65.17 63.74 61.28 57.67 48.08
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
93
Inventories (# of Days) Held Countries
Value
Rank
Percentile
Italy China Peru Israel Ireland Thailand Denmark Netherlands Australia Germany Japan Hong Kong Sweden France Brazil USA Malaysia the United Kingdom Chile Turkey Mexico Finland Switzerland Norway Austria South Korea South Africa Luxembourg Singapore Russia Hungary Spain New Zealand Indonesia Portugal India Pakistan Canada Poland Greece Czech Republic Argentina Taiwan Belgium Philippines
200.12 198.98 166.34 146.42 145.21 133.49 114.02 110.88 110.72 109.81 107.97 96.49 95.10 94.96 93.99 93.46 91.97 90.97 89.43 89.04 88.80 85.48 83.67 80.42 79.31 78.82 76.82 72.36 71.18 71.03 70.60 69.83 68.57 68.04 67.74 66.69 66.27 60.38 57.74 55.27 49.21 45.84 45.15 40.74 32.19
1 2 3 4 5 6 7 9 10 11 12 14 15 16 17 18 19 20 21 22 23 24 25 27 28 29 30 31 33 34 35 37 38 39 40 41 42 44 45 46 47 49 50 51 52
98.11 96.23 94.34 92.45 90.57 88.68 86.79 83.02 81.13 79.25 77.36 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 41.51 37.74 35.85 33.96 30.19 28.30 26.42 24.53 22.64 20.75 16.98 15.09 13.21 11.32 7.55 5.66 3.77 1.89
Region
_________________________________________________________________________________________________________
Europe Asia Latin America the Middle East Europe Asia Europe Europe Oceana Europe Asia Asia Europe Europe Latin America North America Asia Europe Latin America the Middle East Latin America Europe Europe Europe Europe Asia Africa Europe Asia Europe Europe Europe Oceana Asia Europe Asia the Middle East North America Europe Europe Europe Latin America Asia Europe Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
94
Inventories (# of Days) Held (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value
Rank
Percentile
Bahamas Virgin Islands Dominican Republic British Virgin Islands St. Vincent & The Grenadines Bermuda Jamaica USA Aruba Cayman Islands Cuba Antigua & Barbuda Puerto Rico Dominica Grenada St. Lucia Martinique Montserrat Greenland Turks and Caicos Isl. Netherlands Antilles Haiti Guadeloupe Canada St. Kitts and Nevis Trinidad & Tobago Barbados Anguilla St. Pierre & Miquelon
147.89 133.11 130.10 128.27 127.09 114.71 103.32 93.46 92.53 91.86 86.20 78.29 77.44 77.16 72.79 72.30 71.17 68.80 67.74 65.62 65.48 65.30 61.68 60.38 55.12 49.87 47.18 45.84 42.90
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
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 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
95
PRODUCTIVITY IN DOMINICAN REPUBLIC: ASSET-LABOR RATIOS Overview
In this chapter, we consider numerous asset-labor ratios for steam, gas and hydraulic turbines and turbine generator set units in Dominican Republic benchmarked against global averages. Productivity and utilization ratios are presented for companies oprating in Dominican Republic and the average global benchmarks for steam, gas and hydraulic turbines and turbine generator set units. For ratios where there are large deviations between Dominican Republic and the benchmarks, graphics are provided (sometimes referred to as a “gap” analysis). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain asset-labor ratios are highlighted across countries in the comparison group. In the case of asset-labor ratios, this report maintains comparability over time and across countries by using a common currency (the US dollar) and relates each measure to a “per employee basis”. Ratios are projected using raw financial statistics and, as ratios, are therefore comparable. Given a country’s human resource ratios, the resulting figures are benchmarked across regional and global averages. We then report the larger asset-labor ratio gaps for steam, gas and hydraulic turbines and turbine generator set units that Dominican Republic has vis-à-vis the worldwide average. Again, a gap need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or signal a firm’s relative incentive to invest locally. All figures are projections, so due caution is required.
3.6.2
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 steam, gas and hydraulic turbines and turbine generator set units in Dominican Republic based on latest financial results available. Labor-asset Ratios ($k/employee) Dominican Republic North America World Avg. _________________________________________________________________________________________________________
Cash & Short Term Investments Receivables (Net) Total Inventories Other Current Assets Current Assets - Total Property Plant and Equipment - Net Property Plant and Equipment - Gross Accumulated Depreciation - Total Other Assets Intangible Other Assets Total Assets
2.65 21.11 28.64 0.48 52.88 17.60 44.37 31.16 1.07 0.53 71.55
25.61 74.26 37.23 3.74 141.26 47.34 93.48 39.12 9.88 5.09 239.88
21.26 46.74 23.18 1.74 93.95 31.94 58.92 27.74 6.15 3.80 162.19
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.6.3
96
Asset to Labor: International Gaps
The following graphics summarize for steam, gas and hydraulic turbines and turbine generator set units the large labor-asset gaps between firms operating in Dominican Republic and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.
Gap: Cash & Short Term Investments ($k/employee) 25.61
30
21.26
20 10
2.65
0 -10 -20 Dom inican Republic
North Am erica
World Average
-18.61 Gap
Gap: Receivables (Net) ($k/employee) 74.26
80 60 40 20 0 -20 -40
46.74 21.11
-25.63 Dom inican Republic
North Am erica
World Average
Gap
Gap: Total Inventories ($k/employee) 37.23
40 28.64
30
23.18
20 10
5.46
0 Dom inican Republic
www.icongrouponline.com
North Am erica
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
97
Gap: Other Current Assets ($k/employee) 3.74
4 3 2 1 0 -1 -2
1.74 0.48 -1.26 Dom inican Republic
North Am erica
World Average
Gap
Gap: Current Assets - Total ($k/employee) 141.26
150
93.95
100
52.88
50 0
-41.07
-50 Dom inican Republic
North Am erica
World Average
Gap
Gap: Property Plant and Equipment - Net ($k/employee) 60
47.34 31.94
40 17.6
20 0
-14.34
-20 Dom inican Republic
North Am erica
World Average
Gap
Gap: Property Plant and Equipment - Gross ($k/employee) 93.48
100 80 60 40 20 0 -20
58.92
44.37
-14.55 Dom inican Republic
www.icongrouponline.com
North Am erica
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
98
Gap: Accumulated Depreciation - Total ($k/employee) 39.12
40
31.16
30
27.74
20 10
3.42
0 Dom inican Republic
North Am erica
World Average
Gap
Gap: Other Assets ($k/employee) 9.88
10
6.15
5
1.07
0 -5
-5.08
-10 Dom inican Republic
North Am erica
World Average
Gap
Gap: Intangible Other Assets ($k/employee) 5.09
6 4 2
3.8
0.53
0 -2
-3.27
-4 Dom inican Republic
North Am erica
World Average
Gap
Gap: Total Assets ($k/employee) 300
239.88 162.19
200 71.55
100 0 -100
Dom inican Republic
www.icongrouponline.com
North Am erica
World Average
-90.64 Gap
©2007 Icon Group International, Inc.
Financial Indicators
3.6.4
99
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 Dominican Republic (what is the indicator's rank or percentile)? The table below answers this question with respect to asset-labor structure. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance or productivity. After the summary table below, a few key asset-labor ratios are highlighted in additional tables. Asset Structure ($k/employee)
Dominican Republic
Rank of Total
Percentile
2.65 21.11 28.64 0.48 52.88 17.60 44.37 31.16 1.07 0.53 71.55
45 of 54 40 of 54 25 of 54 34 of 48 40 of 54 39 of 54 36 of 50 26 of 50 50 of 54 38 of 44 41 of 54
16.67 25.93 53.70 29.17 25.93 27.78 28.00 48.00 7.41 13.64 24.07
_________________________________________________________________________________________________________
Cash & Short Term Investments Receivables (Net) Total Inventories Other Current Assets Current Assets - Total Property Plant and Equipment - Net Property Plant and Equipment - Gross Accumulated Depreciation - Total Other Assets Intangible Other Assets Total Assets
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
100
Cash & Short Term Investments Countries
Value ($K/employee)
Rank
Percentile
75.14 70.27 66.82 65.96 59.44 53.76 51.33 50.91 45.09 41.62 31.76 30.89 25.36 25.22 23.91 23.54 23.26 22.10 21.82 21.32 21.29 20.61 19.83 18.87 15.55 14.68 13.42 12.33 10.82 10.73 8.87 8.08 7.34 6.19 6.17 5.53 3.39 3.31 2.47 2.46 2.01 1.75 1.06 0.46 0.44
1 2 3 4 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 29 30 31 32 34 35 37 38 39 41 42 43 46 47 48 49 51 52 53
98.11 96.23 94.34 92.45 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 45.28 43.40 41.51 39.62 35.85 33.96 30.19 28.30 26.42 22.64 20.75 18.87 13.21 11.32 9.43 7.55 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Taiwan Australia USA South Korea Russia Japan Israel Ireland Norway China Canada Hong Kong Singapore France Greece Italy Germany Finland Switzerland South Africa Czech Republic the United Kingdom Argentina Luxembourg Spain Belgium Malaysia Sweden Indonesia Austria Pakistan Denmark Netherlands Turkey Mexico India Peru Thailand New Zealand Hungary Poland Philippines Portugal Brazil Chile
Asia Oceana North America Asia Europe Asia the Middle East Europe Europe Asia North America Asia Asia Europe Europe Europe Europe Europe Europe Africa Europe Europe Latin America Europe Europe Europe Asia Europe Asia Europe the Middle East Europe Europe the Middle East Latin America Asia Latin America Asia Oceana Europe Europe Asia Europe Latin America Latin America
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
101
Cash & Short Term Investments (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value ($K/employee)
Rank
Percentile
St. Pierre & Miquelon USA Cayman Islands Antigua & Barbuda Puerto Rico Martinique Montserrat Bahamas Virgin Islands British Virgin Islands Canada Aruba Barbados Anguilla Haiti Bermuda Grenada St. Lucia St. Vincent & The Grenadines Dominican Republic Jamaica Turks and Caicos Isl. Guadeloupe St. Kitts and Nevis Trinidad & Tobago Greenland Netherlands Antilles Cuba Dominica
71.38 66.82 65.68 65.52 64.80 59.56 57.58 51.85 46.66 44.97 31.76 29.62 20.41 19.83 8.74 8.13 5.06 5.02 3.15 2.65 2.56 2.28 2.15 1.92 1.73 1.06 1.02 0.42 0.38
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
102
Receivables (Net) Countries
Value ($K/employee)
Rank
Percentile
468.24 466.96 178.16 125.28 102.56 99.19 92.42 90.46 77.51 69.00 64.27 63.99 61.36 59.42 57.06 53.96 53.58 53.51 49.54 45.46 44.90 41.38 41.25 40.51 39.32 39.14 38.94 31.36 31.27 30.96 28.85 27.96 26.99 26.67 23.89 23.42 21.95 17.22 15.96 15.18 10.40 8.53 8.50 7.31 5.60
1 2 4 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 35 36 37 38 39 40 41 42 43 44 45 46 50
98.11 96.23 92.45 90.57 88.68 86.79 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 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 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 5.66
Region
_________________________________________________________________________________________________________
Turkey Mexico Taiwan Portugal South Korea Italy Russia Japan Greece Czech Republic Argentina France Norway Germany Netherlands Israel Spain Ireland Denmark Switzerland Austria USA Sweden Malaysia Luxembourg Finland Belgium South Africa the United Kingdom Singapore Hong Kong Canada Peru China Pakistan India New Zealand Australia Brazil Chile Hungary Thailand Poland Indonesia Philippines
the Middle East Latin America Asia Europe Asia Europe Europe Asia Europe Europe Latin America Europe Europe Europe Europe the Middle East Europe Europe Europe Europe Europe North America Europe Asia Europe Europe Europe Africa Europe Asia Asia North America Latin America Asia the Middle East Asia Oceana Oceana Latin America Latin America Europe Asia Europe Asia Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
103
Receivables (Net) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value ($K/employee)
Rank
Percentile
Grenada St. Lucia St. Pierre & Miquelon Greenland Netherlands Antilles Antigua & Barbuda Puerto Rico Martinique Montserrat Barbados Anguilla Bahamas Bermuda Virgin Islands British Virgin Islands USA Cayman Islands Canada Aruba Haiti Dominican Republic Cuba Dominica Turks and Caicos Isl. Guadeloupe St. Vincent & The Grenadines St. Kitts and Nevis Trinidad & Tobago Jamaica
382.76 380.21 169.26 125.28 121.10 101.87 100.76 92.61 89.52 66.16 64.27 54.50 49.84 49.05 47.27 41.38 40.67 27.96 27.66 23.54 21.11 14.63 13.10 9.66 9.08 8.12 8.12 7.35 6.60
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
104
Total Inventories Countries
Value ($K/employee)
Rank
Percentile
89.29 89.04 80.46 78.14 77.12 69.50 63.82 53.05 49.54 45.66 41.73 41.73 39.46 39.14 38.80 38.38 36.62 34.00 31.28 30.97 30.78 30.56 27.27 27.05 26.11 25.85 23.91 23.43 23.25 22.96 21.66 20.54 20.40 19.71 18.28 15.90 15.35 15.13 10.77 8.33 8.03 7.95 6.81 6.20 2.28
1 2 4 5 6 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 39 40 41 42 43 44 45 46 49 52
98.11 96.23 92.45 90.57 88.68 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 7.55 1.89
Region
_________________________________________________________________________________________________________
Turkey Mexico Italy Portugal South Korea Russia Taiwan Denmark Japan France Netherlands Germany Israel Ireland Norway South Africa Peru Finland Switzerland Pakistan Sweden USA Austria Luxembourg Greece Australia Belgium China Czech Republic New Zealand Argentina the United Kingdom Singapore Canada Spain Brazil Hong Kong Chile Malaysia Hungary Thailand India Poland Indonesia Philippines
the Middle East Latin America Europe Europe Asia Europe Asia Europe Asia Europe Europe Europe the Middle East Europe Europe Africa Latin America Europe Europe the Middle East Europe North America Europe Europe Europe Oceana Europe Asia Europe Oceana Latin America Europe Asia North America Europe Latin America Asia Latin America Asia Europe Asia Asia Europe Asia Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
105
Total Inventories (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value ($K/employee)
Rank
Percentile
Greenland Antigua & Barbuda Puerto Rico Netherlands Antilles Grenada St. Lucia Martinique Montserrat St. Pierre & Miquelon Bermuda Bahamas Virgin Islands British Virgin Islands USA Haiti Cayman Islands Dominican Republic Barbados Anguilla Canada Aruba Cuba Dominica Turks and Caicos Isl. St. Vincent & The Grenadines Guadeloupe St. Kitts and Nevis Jamaica Trinidad & Tobago
78.14 76.60 75.76 75.54 72.99 72.50 69.64 67.31 60.63 53.36 39.86 35.88 34.57 30.56 30.51 30.04 28.64 22.29 21.66 19.71 14.72 14.59 13.06 7.74 7.64 7.28 6.50 6.21 5.88
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
106
Current Assets - Total Countries
Value ($K/employee)
Rank
Percentile
563.71 562.18 355.71 251.30 226.46 207.87 204.76 203.78 149.02 147.79 147.63 147.02 137.06 136.69 131.62 121.69 116.22 113.35 109.84 107.82 103.26 98.25 95.65 91.09 89.30 87.67 86.83 84.74 84.64 77.72 77.53 75.30 75.23 67.61 64.85 63.92 47.75 37.98 33.59 31.96 25.65 21.87 21.18 17.33 9.67
1 2 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 40 41 42 43 44 46 47 50 52
98.11 96.23 92.45 90.57 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 24.53 22.64 20.75 18.87 16.98 13.21 11.32 5.66 1.89
Region
_________________________________________________________________________________________________________
Turkey Mexico Taiwan South Korea Russia Italy Portugal Japan Israel Ireland USA Norway France Greece Germany Czech Republic Denmark Argentina Australia Netherlands Switzerland Finland China South Africa Luxembourg Spain Sweden Austria Canada Singapore Belgium the United Kingdom Hong Kong Peru Malaysia Pakistan New Zealand India Brazil Chile Indonesia Thailand Hungary Poland Philippines
the Middle East Latin America Asia Asia Europe Europe Europe Asia the Middle East Europe North America Europe Europe Europe Europe Europe Europe Latin America Oceana Europe Europe Europe Asia Africa Europe Europe Europe Europe North America Asia Europe Europe Asia Latin America Asia the Middle East Oceana Asia Latin America Latin America Asia Asia Europe Europe Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
107
Current Assets - Total (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value ($K/employee)
Rank
Percentile
Grenada St. Lucia St. Pierre & Miquelon Antigua & Barbuda Puerto Rico Martinique Montserrat Greenland Netherlands Antilles Bahamas USA Cayman Islands Virgin Islands British Virgin Islands Bermuda Barbados Anguilla Canada Aruba Haiti Dominican Republic Cuba Dominica St. Vincent & The Grenadines Turks and Caicos Isl. Guadeloupe Jamaica St. Kitts and Nevis Trinidad & Tobago
460.80 457.73 337.93 249.60 246.88 226.91 219.35 204.76 197.94 150.52 147.63 145.11 135.47 130.55 116.92 116.69 113.35 84.64 72.14 62.99 52.88 30.81 27.57 20.82 19.69 18.51 16.93 16.54 14.96
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
108
Property Plant and Equipment - Net Countries
Value ($K/employee)
Rank
Percentile
149.59 128.39 115.70 81.21 70.98 70.79 66.34 59.06 55.39 55.01 54.74 47.34 44.97 43.98 41.51 40.65 40.57 38.07 37.53 35.70 35.49 34.02 33.99 33.16 33.00 31.76 29.73 27.12 26.54 26.10 25.25 24.71 22.51 20.39 18.60 16.22 14.54 14.19 13.41 13.30 11.91 10.38 9.13 6.58 6.27
1 2 4 5 6 7 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 27 28 29 30 31 32 33 34 35 36 37 38 40 42 43 44 46 47 48 50 51 52
98.11 96.23 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 54.72 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 24.53 20.75 18.87 16.98 13.21 11.32 9.43 5.66 3.77 1.89
Region
_________________________________________________________________________________________________________
Taiwan South Korea Russia Japan Turkey Mexico Greece Czech Republic Portugal Argentina Switzerland Luxembourg China Germany Australia Malaysia Netherlands Austria USA Canada Finland Denmark Sweden Hungary Norway Italy Singapore Poland Brazil the United Kingdom Chile New Zealand Peru Thailand France Spain Hong Kong Indonesia Israel Ireland Belgium India Pakistan Philippines South Africa
Asia Asia Europe Asia the Middle East Latin America Europe Europe Europe Latin America Europe Europe Asia Europe Oceana Asia Europe Europe North America North America Europe Europe Europe Europe Europe Europe Asia Europe Latin America Europe Latin America Oceana Latin America Asia Europe Europe Asia Asia the Middle East Europe Europe Asia the Middle East Asia Africa
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
109
Property Plant and Equipment - Net (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value ($K/employee)
Rank
Percentile
St. Pierre & Miquelon Antigua & Barbuda Puerto Rico Martinique Montserrat Grenada St. Lucia Barbados Greenland Anguilla Netherlands Antilles USA Cayman Islands Canada Bermuda Turks and Caicos Isl. Guadeloupe St. Kitts and Nevis Cuba Trinidad & Tobago Dominica St. Vincent & The Grenadines Dominican Republic Jamaica Aruba Bahamas Virgin Islands British Virgin Islands Haiti
142.11 127.52 126.13 115.93 112.06 58.02 57.64 56.63 55.39 55.01 53.55 37.53 36.89 35.70 34.22 30.82 28.97 25.89 24.34 23.42 21.79 19.42 17.60 15.78 13.94 13.55 12.19 11.75 9.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
110
Accumulated Depreciation - Total Countries
Value ($K/employee)
Rank
Percentile
119.75 119.42 105.74 76.76 76.62 64.68 58.28 55.99 48.42 47.70 45.96 45.38 40.98 39.83 38.47 36.98 36.85 35.70 33.64 33.43 32.33 31.23 30.95 27.55 26.53 26.31 25.66 24.26 23.17 23.14 21.37 19.10 18.02 16.43 14.99 14.39 14.29 13.90 9.30 7.72 6.63
1 2 4 5 6 7 9 10 11 12 13 14 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 46 47 48
97.96 95.92 91.84 89.80 87.76 85.71 81.63 79.59 77.55 75.51 73.47 71.43 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 6.12 4.08 2.04
Region
_________________________________________________________________________________________________________
Turkey Mexico Japan Germany Belgium South Korea Russia Switzerland Luxembourg Brazil Austria Chile USA Peru Australia Norway Finland Sweden France Netherlands Italy Denmark Greece Czech Republic Israel Ireland Argentina the United Kingdom New Zealand China Canada Spain Malaysia Taiwan Singapore India Indonesia Thailand Hong Kong Philippines South Africa
the Middle East Latin America Asia Europe Europe Asia Europe Europe Europe Latin America Europe Latin America North America Latin America Oceana Europe Europe Europe Europe Europe Europe Europe Europe Europe the Middle East Europe Latin America Europe Oceana Asia North America Europe Asia Asia Asia Asia Asia Asia Asia Asia Africa
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
111
Accumulated Depreciation - Total (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value ($K/employee)
Rank
Percentile
Grenada St. Lucia Antigua & Barbuda Puerto Rico Martinique Montserrat Cuba USA Cayman Islands Dominica Bermuda Dominican Republic Bahamas Barbados Anguilla Virgin Islands British Virgin Islands Canada St. Pierre & Miquelon St. Vincent & The Grenadines Jamaica Aruba
97.89 97.23 64.24 63.54 58.40 56.45 43.75 40.98 40.28 39.16 31.42 31.16 26.80 26.42 25.66 24.12 23.24 21.37 15.61 13.23 10.76 8.91
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
95.45 90.91 86.36 81.82 77.27 72.73 68.18 63.64 59.09 54.55 50.00 45.45 40.91 36.36 31.82 27.27 22.73 18.18 13.64 9.09 4.55 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
112
Intangible Other Assets Countries
Value ($K/employee)
Rank
Percentile
48.49 29.65 29.55 19.59 18.57 18.47 16.88 15.30 15.07 14.60 14.10 13.21 12.49 10.50 8.82 8.76 7.26 6.46 6.02 5.84 5.81 5.80 5.76 5.22 4.27 3.87 3.86 3.77 3.23 2.97 2.83 2.35 0.68 0.57 0.46 0.18 0.15 0.12
1 2 3 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 32 33 34 35 36 37 38 39 40 41
97.67 95.35 93.02 88.37 86.05 83.72 81.40 79.07 76.74 74.42 72.09 69.77 67.44 65.12 62.79 60.47 58.14 55.81 53.49 51.16 48.84 46.51 44.19 39.53 37.21 34.88 32.56 30.23 25.58 23.26 20.93 18.60 16.28 13.95 11.63 9.30 6.98 4.65
Region
_________________________________________________________________________________________________________
Belgium USA Norway France Italy Canada Switzerland Malaysia Sweden Luxembourg Austria Germany Finland Australia Denmark the United Kingdom Greece Czech Republic Argentina New Zealand Israel South Korea Ireland Russia Singapore Turkey Mexico Hong Kong Netherlands Japan Spain China Peru South Africa India Hungary Poland Thailand
Europe North America Europe Europe Europe North America Europe Asia Europe Europe Europe Europe Europe Oceana Europe Europe Europe Europe Latin America Oceana the Middle East Asia Europe Europe Asia the Middle East Latin America Asia Europe Asia Europe Asia Latin America Africa Asia Europe Europe Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
113
Intangible Other Assets (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value ($K/employee)
Rank
Percentile
USA Cayman Islands Canada Bermuda Barbados Anguilla Bahamas Antigua & Barbuda Puerto Rico Virgin Islands Martinique British Virgin Islands Montserrat Aruba Grenada St. Lucia Dominican Republic Turks and Caicos Isl. Guadeloupe St. Kitts and Nevis Trinidad & Tobago St. Vincent & The Grenadines Jamaica
29.65 29.14 18.47 8.87 6.20 6.02 5.87 5.76 5.69 5.28 5.23 5.09 5.06 3.61 3.16 3.14 0.53 0.17 0.16 0.14 0.13 0.11 0.09
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
95.65 91.30 86.96 82.61 78.26 73.91 69.57 65.22 60.87 56.52 52.17 47.83 43.48 39.13 34.78 30.43 26.09 21.74 17.39 13.04 8.70 4.35 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.7 3.7.1
114
PRODUCTIVITY IN DOMINICAN REPUBLIC: LIABILITY-LABOR RATIOS Overview
In this chapter we consider the liability-labor ratios of companies operating in Dominican Republic benchmarked against global averages for steam, gas and hydraulic turbines and turbine generator set units. For ratios where there are large deviations between Dominican Republic and the benchmarks, graphics are provided (sometimes referred to as a “gap” analysis). Then the distribution of productivity ratios is presented in the form of ranks and percentiles. Certain key liability-labor ratios are highlighted for steam, gas and hydraulic turbines and turbine generator set units 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 steam, gas and hydraulic turbines and turbine generator set units that Dominican Republic has vis-à-vis the worldwide average. Again, a gap need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or signal a firm’s relative incentive to invest locally. All figures are projections, so due caution is required.
3.7.2
Liability to Labor: Outlook
The following tables and graphs are prepared using the methodology described at the beginning of this section. All units are in thousands of US dollars per employee. All figures are current-year projections for steam, gas and hydraulic turbines and turbine generator set units in Dominican Republic based on latest financial results available. Labor-liability Ratios ($k/employee) Dominican Republic North America World Avg. _________________________________________________________________________________________________________
Accounts Payable Short Term Debt & Current Portion of Long Term Debt Other Current Liabilities Current Liabilities - Total Long Term Debt Long Term Debt Excluding Capitalized Leases Deferred Taxes Other Liabilities Total Liabilities Common Equity Other Appropriated Reserves Retained Earnings Total Liabilities & Shareholders Equity
0.78 11.32 11.15 22.86 0.84 0.84 0.69 0.63 24.68 46.87 11.28 0.48 71.55
25.23 36.14 25.69 90.63 25.15 25.07 0.09 1.06 119.78 116.62 8.89 23.58 239.88
17.12 22.43 19.46 63.27 12.60 12.51 0.15 0.97 78.99 79.02 5.85 9.29 162.19
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.7.3
115
Liability and Equity to Labor: International Gaps
The following graphics summarize for steam, gas and hydraulic turbines and turbine generator set units the large labor-liability gaps between firms operating in Dominican Republic and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.
Gap: Accounts Payable ($k/employee) 25.23
30
17.12
20 10
0.78
0 -10
-16.34
-20 Dom inican Republic
North Am erica
World Average
Gap
Gap: Short Term Debt & Current Portion of Long Term Debt ($k/employee) 36.14
40 30 20 10 0 -10 -20
22.43 11.32
-11.11 Dom inican Republic
North Am erica
World Average
Gap
Gap: Other Current Liabilities ($k/employee) 25.69
30
19.46
20
11.15
10 0 -10 Dom inican Republic
www.icongrouponline.com
North Am erica
World Average
-8.31 Gap
©2007 Icon Group International, Inc.
Financial Indicators
116
Gap: Current Liabilities - Total ($k/employee) 90.63
100
63.27 50
22.86
0 -40.41
-50 Dom inican Republic
North Am erica
World Average
Gap
Gap: Long Term Debt ($k/employee) 25.15
30 20
12.6
10
0.84
0 -10
-11.76
-20 Dom inican Republic
North Am erica
World Average
Gap
Gap: Long Term Debt Excluding Capitalized Leases ($k/employee) 25.07
30 20
12.51
10
0.84
0 -10
-11.67
-20 Dom inican Republic
North Am erica
World Average
Gap
Gap: Total Liabilities ($k/employee) 150
119.78 78.99
100 24.68
50 0 -50
-54.31
-100 Dom inican Republic
www.icongrouponline.com
North Am erica
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
117
Gap: Common Equity ($k/employee) 150
116.62
100
79.02 46.87
50 0
-32.15
-50 Dom inican Republic
North Am erica
World Average
Gap
Gap: Other Appropriated Reserves ($k/employee) 11.28
12 10 8 6 4 2 0
8.89 5.85
Dom inican Republic
North Am erica
World Average
5.43
Gap
Gap: Retained Earnings ($k/employee) 30
23.58
20 9.29
10
0.48
0 -10
Dom inican Republic
North Am erica
World Average
-8.81 Gap
Gap: Total Liabilities & Shareholders Equity ($k/employee) 300
239.88 162.19
200 71.55
100 0 -100
Dom inican Republic
www.icongrouponline.com
North Am erica
World Average
-90.64 Gap
©2007 Icon Group International, Inc.
Financial Indicators
3.7.4
118
Key Percentiles and Rankings
We now consider the distribution of liability-labor ratios using ranks and percentiles across . What percent of countries have a value lower or higher than Dominican Republic (what is the indicator's rank or percentile)? The table below answers this question with respect to liability-labor ratios. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance or productivity. After the summary table below, a few key liability-labor ratios are highlighted in additional tables. Liability Structure ($k/employee)
Dominican Republic
Rank of Total
Percentile
0.78 11.32 11.15 22.86 0.84 0.84 0.69 0.63 24.68 46.87 11.28 0.48 71.55
51 of 51 29 of 54 36 of 54 42 of 54 49 of 49 49 of 49 13 of 40 27 of 44 45 of 54 35 of 54 15 of 50 42 of 49 41 of 54
0.00 46.30 33.33 22.22 0.00 0.00 67.50 38.64 16.67 35.19 70.00 14.29 24.07
_________________________________________________________________________________________________________
Accounts Payable Short Term Debt & Current Portion of Long Term Debt Other Current Liabilities Current Liabilities - Total Long Term Debt Long Term Debt Excluding Capitalized Leases Deferred Taxes Other Liabilities Total Liabilities Common Equity Other Appropriated Reserves Retained Earnings Total Liabilities & Shareholders Equity
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
119
Accounts Payable Countries
Value ($K/employee)
Rank
Percentile
87.40 87.02 86.79 71.13 57.18 52.99 51.53 41.59 32.27 30.19 25.93 25.15 25.00 23.85 22.39 21.64 21.11 20.86 19.28 18.81 18.61 18.34 16.74 16.67 15.82 15.07 13.03 12.19 11.82 11.64 11.56 11.47 11.24 11.22 10.99 8.68 4.89 4.58 4.36 4.00 3.36 1.00
1 2 3 5 6 7 9 10 11 12 13 14 15 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 44 47 50
98.00 96.00 94.00 90.00 88.00 86.00 82.00 80.00 78.00 76.00 74.00 72.00 70.00 66.00 64.00 62.00 60.00 58.00 56.00 54.00 52.00 50.00 48.00 46.00 44.00 42.00 40.00 38.00 36.00 34.00 32.00 30.00 28.00 26.00 24.00 22.00 20.00 18.00 16.00 12.00 6.00 0.00
Region
_________________________________________________________________________________________________________
Taiwan Turkey Mexico Italy South Korea Japan Russia Belgium France Norway Denmark Greece Spain Netherlands Czech Republic Sweden Singapore Argentina Switzerland Germany Hong Kong USA Canada Luxembourg Austria the United Kingdom Finland China Brazil New Zealand Israel Ireland Chile India Australia Malaysia Hungary Indonesia Thailand Poland Philippines Peru
Asia the Middle East Latin America Europe Asia Asia Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Asia Latin America Europe Europe Asia North America North America Europe Europe Europe Europe Asia Latin America Oceana the Middle East Europe Latin America Asia Oceana Asia Europe Asia Asia Europe Asia Latin America
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
120
Accounts Payable (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value ($K/employee)
Rank
Percentile
St. Pierre & Miquelon Grenada St. Lucia Antigua & Barbuda Puerto Rico Martinique Montserrat Bermuda Barbados Anguilla USA Cayman Islands Aruba Canada Bahamas Cuba Virgin Islands British Virgin Islands Dominica Turks and Caicos Isl. Guadeloupe St. Vincent & The Grenadines St. Kitts and Nevis Trinidad & Tobago Jamaica Dominican Republic
83.03 71.14 70.66 56.79 56.17 51.63 49.91 26.09 21.47 20.86 18.34 18.02 17.84 16.74 11.68 10.84 10.51 10.13 9.70 4.54 4.27 4.15 3.82 3.45 3.38 0.78
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
96.15 92.31 88.46 84.62 80.77 76.92 73.08 69.23 65.38 61.54 57.69 53.85 50.00 46.15 42.31 38.46 34.62 30.77 26.92 23.08 19.23 15.38 11.54 7.69 3.85 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
121
Current Liabilities - Total Countries
Value ($K/employee)
Rank
Percentile
506.75 505.36 226.98 166.02 149.61 141.55 129.00 118.68 87.93 82.29 77.84 73.25 72.19 68.24 65.14 63.90 63.87 61.93 61.10 57.37 57.14 55.81 53.70 51.60 50.72 49.41 48.51 42.51 42.16 40.61 38.86 37.71 37.66 35.84 31.31 30.41 29.23 25.11 21.73 19.95 19.24 15.74 12.06 9.20 4.74
1 2 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 38 39 40 41 42 43 44 45 46 49 52
98.11 96.23 92.45 90.57 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 7.55 1.89
Region
_________________________________________________________________________________________________________
Turkey Mexico Taiwan South Korea Russia Italy Portugal Japan Norway Greece France Czech Republic Denmark Argentina China Spain Germany Netherlands Austria Belgium Switzerland South Africa Finland Sweden USA Luxembourg the United Kingdom Israel Ireland Pakistan Singapore Hong Kong Brazil Chile Canada Malaysia Peru Australia India New Zealand Hungary Poland Thailand Indonesia Philippines
the Middle East Latin America Asia Asia Europe Europe Europe Asia Europe Europe Europe Europe Europe Latin America Asia Europe Europe Europe Europe Europe Europe Africa Europe Europe North America Europe Europe the Middle East Europe the Middle East Asia Asia Latin America Latin America North America Asia Latin America Oceana Asia Oceana Europe Europe Asia Asia Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
122
Current Liabilities - Total (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value ($K/employee)
Rank
Percentile
Grenada St. Lucia St. Pierre & Miquelon Antigua & Barbuda Puerto Rico Martinique Montserrat Greenland Netherlands Antilles Bermuda Barbados Anguilla USA Cayman Islands Bahamas Haiti Virgin Islands British Virgin Islands Aruba Cuba Canada Dominica Dominican Republic Turks and Caicos Isl. Guadeloupe St. Kitts and Nevis Trinidad & Tobago St. Vincent & The Grenadines Jamaica
414.23 411.47 215.63 164.90 163.10 149.91 144.91 129.00 124.70 72.63 70.24 68.24 50.72 49.85 42.94 40.01 38.65 37.24 36.16 34.54 31.31 30.92 22.86 17.88 16.81 15.02 13.59 11.48 9.33
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
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
123
Long Term Debt Countries
Value ($K/employee)
Rank
Percentile
131.37 131.02 93.29 51.38 42.58 38.37 32.88 31.75 29.79 27.66 27.47 26.88 26.22 25.89 25.76 25.46 21.50 21.03 18.72 17.44 16.90 16.06 15.56 14.71 14.38 11.39 9.59 8.36 7.00 5.47 5.36 4.50 4.47 4.22 4.19 3.52 3.29 3.26 3.01 2.10 1.07
1 2 4 5 6 8 9 10 11 12 13 14 15 16 17 18 19 20 22 23 24 25 26 27 28 29 30 31 32 34 36 37 38 39 40 41 42 43 44 45 48
97.92 95.83 91.67 89.58 87.50 83.33 81.25 79.17 77.08 75.00 72.92 70.83 68.75 66.67 64.58 62.50 60.42 58.33 54.17 52.08 50.00 47.92 45.83 43.75 41.67 39.58 37.50 35.42 33.33 29.17 25.00 22.92 20.83 18.75 16.67 14.58 12.50 10.42 8.33 6.25 0.00
Region
_________________________________________________________________________________________________________
Turkey Mexico Taiwan Portugal South Korea Russia Belgium Norway Switzerland Netherlands New Zealand USA Japan Sweden Luxembourg Finland Italy Greece Czech Republic Argentina Denmark Austria France Germany Canada Australia the United Kingdom Spain Thailand Hungary South Africa Singapore Poland Israel Ireland Malaysia Hong Kong China India Indonesia Peru
the Middle East Latin America Asia Europe Asia Europe Europe Europe Europe Europe Oceana North America Asia Europe Europe Europe Europe Europe Europe Latin America Europe Europe Europe Europe North America Oceana Europe Europe Asia Europe Africa Asia Europe the Middle East Europe Asia Asia Asia Asia Asia Latin America
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
124
Long Term Debt (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value ($K/employee)
Rank
Percentile
Grenada St. Lucia St. Pierre & Miquelon Greenland Netherlands Antilles Antigua & Barbuda Puerto Rico Martinique Montserrat USA Cayman Islands Barbados Anguilla Bermuda Canada St. Vincent & The Grenadines Jamaica Turks and Caicos Isl. Guadeloupe St. Kitts and Nevis Bahamas Trinidad & Tobago Virgin Islands British Virgin Islands Aruba Dominican Republic
107.39 106.67 88.62 51.38 49.67 42.29 41.83 38.45 37.17 26.88 26.42 17.95 17.44 17.00 14.38 6.66 5.42 5.08 4.78 4.27 4.26 3.86 3.84 3.70 3.15 0.84
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
96.15 92.31 88.46 84.62 80.77 76.92 73.08 69.23 65.38 61.54 57.69 53.85 50.00 46.15 42.31 38.46 34.62 30.77 26.92 23.08 19.23 15.38 11.54 7.69 3.85 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
125
Total Liabilities Countries
Value ($K/employee)
Rank
Percentile
645.86 644.10 320.58 219.98 198.23 181.11 180.80 159.41 123.30 120.24 104.91 102.02 100.53 100.09 99.65 98.31 97.45 93.39 90.99 87.00 86.46 86.18 83.27 72.79 68.71 64.07 60.67 53.22 52.78 49.13 47.95 44.43 41.53 41.27 39.67 37.74 37.64 36.21 31.56 25.72 24.71 20.21 19.36 11.90 4.74
1 2 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 49 52
98.11 96.23 92.45 90.57 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 26.42 24.53 22.64 20.75 18.87 16.98 15.09 13.21 7.55 1.89
Region
_________________________________________________________________________________________________________
Turkey Mexico Taiwan South Korea Russia Italy Portugal Japan Germany Norway Greece France Denmark Austria Switzerland Belgium Netherlands Czech Republic Sweden Argentina USA Luxembourg Finland Spain China the United Kingdom South Africa Israel Ireland Canada New Zealand Singapore Hong Kong Pakistan Brazil Chile Australia Malaysia Peru India Hungary Poland Thailand Indonesia Philippines
the Middle East Latin America Asia Asia Europe Europe Europe Asia Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Europe Latin America North America Europe Europe Europe Asia Europe Africa the Middle East Europe North America Oceana Asia Asia the Middle East Latin America Latin America Oceana Asia Latin America Asia Europe Europe Asia Asia Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
126
Total Liabilities (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value ($K/employee)
Rank
Percentile
Grenada St. Lucia St. Pierre & Miquelon Antigua & Barbuda Puerto Rico Martinique Montserrat Greenland Netherlands Antilles Bermuda Barbados Anguilla USA Cayman Islands Bahamas Canada Virgin Islands British Virgin Islands Haiti Aruba Cuba Dominica Dominican Republic Turks and Caicos Isl. Guadeloupe St. Kitts and Nevis St. Vincent & The Grenadines Trinidad & Tobago Jamaica
527.95 524.43 304.55 218.49 216.11 198.63 192.01 180.80 174.77 101.13 89.56 87.00 86.46 84.98 53.76 49.13 48.38 46.62 40.66 39.82 36.38 32.56 24.68 22.97 21.59 19.29 18.43 17.46 14.98
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
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
127
Common Equity Countries
Value ($K/employee)
Rank
Percentile
594.71 593.09 283.20 188.26 169.65 158.60 138.81 128.58 127.52 124.76 95.17 94.48 88.58 86.69 86.29 85.33 84.11 82.29 79.71 78.35 77.17 71.16 69.51 68.57 67.27 66.78 63.47 60.03 59.93 52.54 51.16 49.32 46.42 42.59 36.53 34.91 33.55 31.09 29.82 27.55 25.21 24.39 21.42 20.38 11.54
1 2 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 38 39 40 41 42 44 45 46 48 50 52
98.11 96.23 92.45 90.57 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 28.30 26.42 24.53 22.64 20.75 16.98 15.09 13.21 9.43 5.66 1.89
Region
_________________________________________________________________________________________________________
Turkey Mexico Taiwan South Korea Russia Japan USA Israel Ireland Australia Norway Greece Malaysia Canada Italy Portugal Czech Republic Switzerland China Argentina France Luxembourg Germany Singapore Finland Hong Kong Denmark Netherlands Peru Sweden Belgium the United Kingdom Austria South Africa Pakistan New Zealand Spain Indonesia Hungary India Thailand Poland Brazil Chile Philippines
the Middle East Latin America Asia Asia Europe Asia North America the Middle East Europe Oceana Europe Europe Asia North America Europe Europe Europe Europe Asia Latin America Europe Europe Europe Asia Europe Asia Europe Europe Latin America Europe Europe Europe Europe Africa the Middle East Oceana Europe Asia Europe Asia Asia Europe Latin America Latin America Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
128
Common Equity (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value ($K/employee)
Rank
Percentile
Grenada St. Lucia St. Pierre & Miquelon Antigua & Barbuda Puerto Rico Martinique Montserrat USA Cayman Islands Bahamas Virgin Islands British Virgin Islands Canada Greenland Netherlands Antilles Barbados Anguilla Aruba Bermuda Dominican Republic Haiti Turks and Caicos Isl. Guadeloupe St. Vincent & The Grenadines St. Kitts and Nevis Trinidad & Tobago Cuba Jamaica Dominica
486.14 482.90 269.04 186.99 184.95 169.99 164.32 138.81 136.43 129.88 116.89 112.64 86.69 85.33 82.48 80.65 78.35 64.03 63.85 46.87 35.99 27.71 26.05 24.00 23.28 21.06 19.64 19.52 17.58
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
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
129
Retained Earnings Countries
Value ($K/employee)
Rank
Percentile
86.03 85.32 81.05 61.59 50.09 43.32 37.45 36.18 32.75 31.66 30.41 28.36 27.94 27.55 25.26 25.18 24.59 23.99 23.78 23.04 19.79 18.17 16.10 13.72 11.38 11.28 10.98 10.73 10.18 9.12 8.59 6.57 6.18 4.67 0.61 -1.93 -2.07 -2.33 -30.51 -30.60
1 2 3 4 5 6 7 8 9 10 11 12 13 14 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 34 36 39 41 43 44 45 47 48
97.92 95.83 93.75 91.67 89.58 87.50 85.42 83.33 81.25 79.17 77.08 75.00 72.92 70.83 66.67 64.58 62.50 60.42 58.33 56.25 54.17 52.08 50.00 47.92 45.83 43.75 41.67 39.58 37.50 35.42 33.33 29.17 25.00 18.75 14.58 10.42 8.33 6.25 2.08 0.00
Region
_________________________________________________________________________________________________________
Israel Ireland Japan USA Switzerland Luxembourg Australia Finland Taiwan South Africa Norway Netherlands South Korea Hong Kong Malaysia Russia Austria Canada Singapore the United Kingdom Denmark Germany Italy France Spain Brazil New Zealand Chile Portugal Sweden Indonesia China Thailand Philippines Peru Argentina Czech Republic Greece Mexico Turkey
the Middle East Europe Asia North America Europe Europe Oceana Europe Asia Africa Europe Europe Asia Asia Asia Europe Europe North America Asia Europe Europe Europe Europe Europe Europe Latin America Oceana Latin America Europe Europe Asia Asia Asia Asia Latin America Latin America Europe Europe Latin America the Middle East
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
130
Retained Earnings (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value ($K/employee)
Rank
Percentile
Bahamas Virgin Islands British Virgin Islands USA Cayman Islands St. Pierre & Miquelon Antigua & Barbuda Puerto Rico Aruba Martinique Montserrat Canada Bermuda Cuba Greenland Netherlands Antilles Dominica St. Vincent & The Grenadines Jamaica Dominican Republic Anguilla Barbados St. Lucia Grenada
86.90 78.21 75.36 61.59 60.54 31.11 27.75 27.45 26.42 25.23 24.39 23.99 19.91 10.35 10.18 9.84 9.26 5.88 4.78 0.48 -1.93 -1.99 -24.84 -25.01
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
95.83 91.67 87.50 83.33 79.17 75.00 70.83 66.67 62.50 58.33 54.17 50.00 45.83 41.67 37.50 33.33 29.17 25.00 20.83 16.67 12.50 8.33 4.17 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.8 3.8.1
131
PRODUCTIVITY IN DOMINICAN REPUBLIC: INCOME-LABOR RATIOS Overview
In this chapter we consider the income-labor ratios for steam, gas and hydraulic turbines and turbine generator set units in Dominican Republic benchmarked against global averages. For ratios where there are large deviations between the average firm operating in Dominican Republic and the benchmarks, graphics are provided (sometimes referred to as a “gap” analysis). Then the distribution of ratios is presented in the form of ranks and percentiles. Certain key income-labor ratios are highlighted across countries in the comparison group. In the case of income-labor ratios, this report maintains comparability over time and across countries by using a common currency (the US dollar) and relates each measure to a “per employee basis”. Ratios are projected using raw financial statistics and, as ratios, are therefore comparable. Given a country’s human resource ratios, the resulting figures are benchmarked across regional and global averages. We then report the larger income-labor ratio gaps for steam, gas and hydraulic turbines and turbine generator set units that Dominican Republic has vis-à-vis the worldwide average. Again, a gap need not be a bad sign. Rather, it is simply a substantial difference that might merit further attention or signal a firm’s relative incentive to invest locally. All figures are projections, so due caution is required.
3.8.2
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 steam, gas and hydraulic turbines and turbine generator set units in Dominican Republic based on latest financial results available. Labor-income Ratios ($k/employee) Dominican Republic North America World Avg. _________________________________________________________________________________________________________
Net Sales or Revenues Cost of Goods Sold (Excluding Depreciation) Depreciation, Depletion & Amortization Gross Income Selling, General & Administrative Expenses Operating Income Other Income/Expense Net Earnings Before Interest and Taxes (EBIT) Interest Expense on Debt Pretax Income Income Taxes Net Income Before Extra Items/Prefer Dividends Net Income Before Preferred Dividends Net Income Available to Common
122.75 98.43 3.29 21.03 9.60 -1.73 4.30 2.56 1.59 0.97 0.01 0.96 0.96 0.96
212.92 167.47 7.40 39.43 27.24 12.14 1.64 21.38 14.53 6.88 2.35 4.46 4.39 4.45
128.08 93.24 5.06 25.62 15.38 9.69 1.13 15.79 9.49 6.36 1.98 3.98 4.14 3.98
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
3.8.3
132
Income to Labor: Gaps
The following graphics summarize for steam, gas and hydraulic turbines and turbine generator set units the large labor-income gaps between firms operating in Dominican Republic and the world average. A gap cannot necessarily be interpreted as a positive or negative reflection on performance. Gaps may signal areas of specialization, market focus, or expertise. More contextual information is required to fully interpret these gaps. The gaps highlighted here are simply those that are large.
Gap: Net Sales or Revenues ($k/employee) 250 200 150 100 50 0 -50
212.92 128.08
122.75
-5.33 Dom inican Republic
North Am erica
World Average
Gap
Gap: Cost of Goods Sold (Excluding Depreciation) ($k/employee) 200
167.47
150 98.43
100
93.24
50
5.19
0 Dom inican Republic
North Am erica
World Average
Gap
Gap: Gross Income ($k/employee) 39.43
40 30
25.62
21.03
20 10 0
-4.59
-10 Dom inican Republic
www.icongrouponline.com
North Am erica
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
133
Gap: Selling, General & Administrative Expenses ($k/employee) 27.24
30 20
15.38 9.6
10 0
-5.78
-10 Dom inican Republic
North Am erica
World Average
Gap
Gap: Operating Income ($k/employee) 15
12.14
10 5
9.69
1.73
0 -5
-7.96
-10 Dom inican Republic
North Am erica
World Average
Gap
Gap: Other Income/Expense Net ($k/employee) 5
4.3
4
3.17
3 1.64
2 1
1.13
0 Dom inican Republic
North Am erica
World Average
Gap
Gap: Earnings Before Interest and Taxes (EBIT) ($k/employee) 30
21.38
20 10
15.79
2.56
0 -10
-13.23
-20 Dom inican Republic
www.icongrouponline.com
North Am erica
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
134
Gap: Interest Expense on Debt ($k/employee) 14.53
15
9.49
10 5
1.59
0 -5
-7.9
-10 Dom inican Republic
North Am erica
World Average
Gap
Gap: Pretax Income ($k/employee) 10
6.88
5
6.36
0.97
0 -5
-5.39
-10 Dom inican Republic
North Am erica
World Average
Gap
Gap: Net Income Before Extra Items/Prefer Dividends ($k/employee) 6
4.46
4
3.98
0.96
2 0 -2
-3.02
-4 Dom inican Republic
North Am erica
World Average
Gap
Gap: Net Income Before Preferred Dividends ($k/employee) 6
4.39
4
4.14
0.96
2 0 -2
-3.18
-4 Dom inican Republic
www.icongrouponline.com
North Am erica
World Average
Gap
©2007 Icon Group International, Inc.
Financial Indicators
3.8.4
135
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 Dominican Republic (what is the ratio's rank or percentile)? The table below answers this question with respect to income-labor ratios. The ranks and percentiles indicate, from highest to lowest, where a value falls within the distribution of all countries considered in the global benchmark (the number of countries in the benchmark per line item may vary, as indicated in the Rank). Again, a high or low figure does not necessarily indicate good or bad performance or productivity. After the summary table below, a few key incomelabor ratios are highlighted in additional tables. Income Structure ($k/employee)
Dominican Republic
Rank of Total
Percentile
122.75 98.43 3.29 21.03 9.60 -1.73 4.30 2.56 1.59 0.97 0.01 0.96 0.96 0.96
37 of 54 34 of 53 42 of 54 35 of 53 35 of 47 51 of 54 6 of 54 47 of 54 33 of 54 45 of 54 46 of 48 41 of 54 44 of 54 41 of 54
31.48 35.85 22.22 33.96 25.53 5.56 88.89 12.96 38.89 16.67 4.17 24.07 18.52 24.07
_________________________________________________________________________________________________________
Net Sales or Revenues Cost of Goods Sold (Excluding Depreciation) Depreciation, Depletion & Amortization Gross Income Selling, General & Administrative Expenses Operating Income Other Income/Expense Net Earnings Before Interest and Taxes (EBIT) Interest Expense on Debt Pretax Income Income Taxes Net Income Before Extra Items/Prefer Dividends Net Income Before Preferred Dividends Net Income Available to Common
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
136
Cost of Goods Sold (Excluding Depreciation) Countries
Value ($K/employee)
Rank
Percentile
853.22 388.78 306.09 298.54 297.72 275.82 226.16 205.13 195.15 192.75 183.90 181.64 173.87 166.87 154.77 148.01 147.81 144.11 142.21 138.02 130.19 125.85 122.99 121.96 117.95 113.63 108.57 106.86 101.13 100.45 99.62 97.70 90.30 90.09 85.39 58.03 47.81 45.74 45.49 44.83 39.22 37.34 33.69 32.08
1 2 3 4 5 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 39 40 41 42 43 45 46 47 49
98.08 96.15 94.23 92.31 90.38 84.62 82.69 80.77 78.85 76.92 75.00 73.08 71.15 69.23 67.31 65.38 63.46 61.54 59.62 57.69 55.77 53.85 51.92 50.00 48.08 46.15 44.23 42.31 40.38 38.46 36.54 34.62 32.69 30.77 28.85 25.00 23.08 21.15 19.23 17.31 13.46 11.54 9.62 5.77
Region
_________________________________________________________________________________________________________
Taiwan Portugal South Korea Turkey Mexico Russia South Africa Belgium Japan Norway Australia Italy France Denmark Singapore Germany Sweden Finland Switzerland USA Austria Peru Luxembourg Greece Netherlands New Zealand Czech Republic Spain Argentina Israel Ireland the United Kingdom Canada Hong Kong China Malaysia Brazil India Chile Indonesia Hungary Thailand Philippines Poland
Asia Europe Asia the Middle East Latin America Europe Africa Europe Asia Europe Oceana Europe Europe Europe Asia Europe Europe Europe Europe North America Europe Latin America Europe Europe Europe Oceana Europe Europe Latin America the Middle East Europe Europe North America Asia Asia Asia Latin America Asia Latin America Asia Europe Asia Asia Europe
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
www.icongrouponline.com
©2007 Icon Group International, Inc.
Financial Indicators
137
Cost of Goods Sold (Excluding Depreciation) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value ($K/employee)
Rank
Percentile
St. Pierre & Miquelon Greenland Netherlands Antilles Antigua & Barbuda Puerto Rico Martinique Montserrat Grenada St. Lucia Bermuda USA Cayman Islands Barbados Bahamas Anguilla Dominican Republic Virgin Islands Canada British Virgin Islands Aruba Cuba Dominica Turks and Caicos Isl. St. Vincent & The Grenadines Guadeloupe St. Kitts and Nevis Jamaica Trinidad & Tobago
810.56 388.78 375.82 304.01 300.70 276.38 267.16 244.04 242.41 167.87 138.02 135.66 104.11 101.47 101.13 98.43 91.32 90.30 88.00 86.39 43.85 39.25 36.45 35.55 34.26 30.62 28.90 27.70
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
96.43 92.86 89.29 85.71 82.14 78.57 75.00 71.43 67.86 64.29 60.71 57.14 53.57 50.00 46.43 42.86 39.29 35.71 32.14 28.57 25.00 21.43 17.86 14.29 10.71 7.14 3.57 0.00
_________________________________________________________________________________________________________
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Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Selling, General & Administrative Expenses Countries
Value ($K/employee)
Rank
Percentile
85.31 85.08 80.20 60.93 55.92 50.19 46.12 43.04 42.68 37.87 35.50 34.27 33.88 33.19 32.31 30.88 30.70 26.55 26.43 26.40 26.26 20.61 20.42 19.08 17.66 17.22 16.99 15.82 15.22 12.28 10.88 9.72 5.47 5.21 5.17 4.25 4.23 3.31 0.34
1 2 3 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 31 32 33 34 35 36 37 38 39 41 45
97.83 95.65 93.48 89.13 86.96 84.78 82.61 80.43 78.26 76.09 73.91 71.74 69.57 67.39 65.22 60.87 58.70 56.52 54.35 52.17 50.00 47.83 45.65 43.48 41.30 39.13 36.96 34.78 32.61 30.43 28.26 26.09 23.91 21.74 19.57 17.39 15.22 10.87 2.17
Region
_________________________________________________________________________________________________________
Turkey Mexico Taiwan Netherlands USA Japan Italy Israel Ireland Norway Sweden South Korea Finland the United Kingdom Germany Russia Switzerland Luxembourg South Africa France Australia Denmark Canada Greece Austria Hong Kong Czech Republic Argentina China Peru Malaysia Singapore Brazil Chile Hungary Thailand Poland Indonesia Philippines
the Middle East Latin America Asia Europe North America Asia Europe the Middle East Europe Europe Europe Asia Europe Europe Europe Europe Europe Europe Africa Europe Oceana Europe North America Europe Europe Asia Europe Latin America Asia Latin America Asia Asia Latin America Latin America Europe Asia Europe Asia Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Financial Indicators
139
Selling, General & Administrative Expenses (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value ($K/employee)
Rank
Percentile
St. Pierre & Miquelon Grenada St. Lucia USA Cayman Islands Bahamas Virgin Islands British Virgin Islands Antigua & Barbuda Puerto Rico Martinique Montserrat Bermuda Canada Aruba Barbados Anguilla Dominican Republic Cuba Turks and Caicos Isl. Guadeloupe Dominica St. Vincent & The Grenadines St. Kitts and Nevis Trinidad & Tobago Jamaica
76.19 69.73 69.27 55.92 54.96 43.47 39.12 37.70 34.03 33.66 30.94 29.91 20.73 20.42 16.51 16.29 15.82 9.60 5.02 4.80 4.52 4.49 4.04 4.04 3.65 3.29
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
96.15 92.31 88.46 84.62 80.77 76.92 73.08 69.23 65.38 61.54 57.69 53.85 50.00 46.15 42.31 38.46 34.62 30.77 26.92 23.08 19.23 15.38 11.54 7.69 3.85 0.00
_________________________________________________________________________________________________________
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Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Operating Income Countries
Value ($K/employee)
Rank
Percentile
52.50 52.36 28.13 25.37 25.35 22.09 18.71 17.95 17.23 16.36 15.88 14.98 13.40 12.72 11.93 11.74 11.12 11.08 10.83 10.17 10.16 9.79 9.52 8.80 8.67 8.61 8.13 7.79 7.71 7.41 7.34 6.99 6.76 6.41 6.24 5.37 3.63 2.69 1.05 0.86 0.56 0.54 -2.21 -3.72 -3.75
1 2 4 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 40 42 46 47 48 49 51 52 53
98.11 96.23 92.45 88.68 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 24.53 20.75 13.21 11.32 9.43 7.55 3.77 1.89 0.00
Region
_________________________________________________________________________________________________________
Turkey Mexico South Korea Taiwan Russia Netherlands South Africa USA Spain Portugal Norway Italy Greece France Czech Republic Pakistan Argentina Belgium Canada Japan Singapore New Zealand the United Kingdom Hong Kong China Finland Sweden Malaysia Brazil Switzerland Chile Germany Austria Luxembourg Denmark India Indonesia Thailand Hungary Poland Philippines Australia Peru Ireland Israel
the Middle East Latin America Asia Asia Europe Europe Africa North America Europe Europe Europe Europe Europe Europe Europe the Middle East Latin America Europe North America Asia Asia Oceana Europe Asia Asia Europe Europe Asia Latin America Europe Latin America Europe Europe Europe Europe Asia Asia Asia Europe Europe Asia Oceana Latin America Europe the Middle East
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Operating Income (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value ($K/employee)
Rank
Percentile
Grenada St. Lucia Antigua & Barbuda Puerto Rico Martinique Montserrat St. Pierre & Miquelon USA Cayman Islands Greenland Netherlands Antilles Haiti Barbados Anguilla Canada Aruba Cuba Dominica Bermuda St. Vincent & The Grenadines Jamaica Turks and Caicos Isl. Guadeloupe St. Kitts and Nevis Trinidad & Tobago Dominican Republic British Virgin Islands Virgin Islands Bahamas
42.92 42.63 27.94 27.64 25.40 24.55 24.10 17.95 17.64 16.36 15.81 11.57 11.44 11.12 10.83 8.44 7.07 6.33 6.28 2.56 2.08 0.98 0.92 0.82 0.74 -1.73 -3.28 -3.41 -3.79
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
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Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Earnings Before Interest and Taxes (EBIT) Countries
Value ($K/employee)
Rank
Percentile
169.22 168.76 44.85 29.31 26.41 22.51 21.53 20.45 20.42 20.00 19.28 18.96 18.18 17.73 17.18 16.94 16.87 15.00 13.89 12.62 11.63 11.41 11.29 10.92 10.22 9.79 9.78 9.76 9.74 9.68 9.46 9.18 8.30 8.18 7.52 6.98 6.55 3.48 3.28 2.97 1.49 1.22 0.76 -2.68 -2.70
1 2 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 36 37 38 39 40 41 42 43 48 49 50 52 53
98.11 96.23 92.45 90.57 86.79 84.91 83.02 81.13 79.25 77.36 75.47 73.58 71.70 69.81 67.92 66.04 64.15 62.26 60.38 58.49 56.60 54.72 52.83 50.94 49.06 47.17 45.28 43.40 41.51 39.62 37.74 35.85 32.08 30.19 28.30 26.42 24.53 22.64 20.75 18.87 9.43 7.55 5.66 1.89 0.00
Region
_________________________________________________________________________________________________________
Turkey Mexico Taiwan South Korea Russia Netherlands Portugal Norway Greece USA Italy South Africa Czech Republic Brazil Spain Argentina Chile France Germany Finland New Zealand Pakistan Canada Australia Singapore the United Kingdom Austria Sweden Hong Kong China Switzerland Malaysia Belgium Luxembourg Japan India Denmark Thailand Peru Indonesia Hungary Poland Philippines Ireland Israel
the Middle East Latin America Asia Asia Europe Europe Europe Europe Europe North America Europe Africa Europe Latin America Europe Latin America Latin America Europe Europe Europe Oceana the Middle East North America Oceana Asia Europe Europe Europe Asia Asia Europe Asia Europe Europe Asia Asia Europe Asia Latin America Asia Europe Europe Asia Europe the Middle East
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Earnings Before Interest and Taxes (EBIT) (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value ($K/employee)
Rank
Percentile
Grenada St. Lucia St. Pierre & Miquelon Antigua & Barbuda Puerto Rico Martinique Montserrat Greenland Netherlands Antilles USA Cayman Islands Barbados Anguilla Cuba Dominica Canada Haiti Aruba Bermuda St. Vincent & The Grenadines Jamaica Dominican Republic Turks and Caicos Isl. Guadeloupe St. Kitts and Nevis Trinidad & Tobago British Virgin Islands Virgin Islands Bahamas
138.33 137.40 42.61 29.11 28.80 26.47 25.59 21.53 20.81 20.00 19.66 17.44 16.94 16.26 14.55 11.29 11.25 9.34 6.58 3.31 2.69 2.56 1.39 1.30 1.16 1.05 -2.36 -2.45 -2.73
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Pretax Income Countries
Value ($K/employee)
Rank
Percentile
34.08 20.39 18.65 18.38 18.09 17.50 16.49 16.47 16.31 14.94 14.68 14.61 13.67 12.10 11.65 10.11 10.09 9.70 9.60 9.54 9.32 9.29 8.98 8.57 8.40 8.23 8.23 7.64 7.12 6.72 6.35 6.26 6.16 6.04 3.35 3.00 2.39 1.24 0.68 0.64 0.52 -3.20 -3.23 -30.51 -30.60
1 2 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 30 31 32 33 34 35 36 37 38 40 44 45 46 48 49 50 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 52.83 50.94 49.06 47.17 43.40 41.51 39.62 37.74 35.85 33.96 32.08 30.19 28.30 24.53 16.98 15.09 13.21 9.43 7.55 5.66 1.89 0.00
Region
_________________________________________________________________________________________________________
Taiwan South Korea Netherlands Russia USA Norway Greece South Africa Spain Portugal Czech Republic Italy Argentina France Germany Canada Brazil Finland Chile Singapore Pakistan New Zealand the United Kingdom Australia Hong Kong Malaysia China Austria Switzerland Sweden Belgium India Luxembourg Japan Denmark Thailand Indonesia Peru Philippines Hungary Poland Ireland Israel Mexico Turkey
Asia Asia Europe Europe North America Europe Europe Africa Europe Europe Europe Europe Latin America Europe Europe North America Latin America Europe Latin America Asia the Middle East Oceana Europe Oceana Asia Asia Asia Europe Europe Europe Europe Asia Europe Asia Europe Asia Asia Latin America Asia Europe Europe Europe the Middle East Latin America the Middle East
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Pretax Income (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value ($K/employee)
Rank
Percentile
St. Pierre & Miquelon Antigua & Barbuda Puerto Rico Martinique USA Montserrat Cayman Islands Greenland Netherlands Antilles Barbados Anguilla Canada Cuba Haiti Dominica Aruba Bermuda St. Vincent & The Grenadines Jamaica Dominican Republic Turks and Caicos Isl. Guadeloupe St. Kitts and Nevis Trinidad & Tobago British Virgin Islands Virgin Islands Bahamas St. Lucia Grenada
32.38 20.25 20.03 18.41 18.09 17.80 17.78 14.94 14.44 14.07 13.67 10.11 9.26 9.18 8.29 8.06 3.37 2.86 2.32 0.97 0.59 0.56 0.50 0.45 -2.83 -2.93 -3.26 -24.84 -25.01
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
96.55 93.10 89.66 86.21 82.76 79.31 75.86 72.41 68.97 65.52 62.07 58.62 55.17 51.72 48.28 44.83 41.38 37.93 34.48 31.03 27.59 24.14 20.69 17.24 13.79 10.34 6.90 3.45 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Income Taxes Countries
Value ($K/employee)
Rank
Percentile
6.83 6.74 6.08 6.07 5.66 5.66 5.64 5.58 5.27 5.19 5.12 5.09 4.75 4.48 4.17 3.36 3.31 3.28 3.21 2.90 2.69 2.67 2.54 2.52 2.41 2.23 2.12 1.90 1.83 1.70 1.61 1.59 1.29 0.95 0.71 0.59 0.58 0.22 0.01 0.00
1 2 3 4 5 6 7 8 9 10 12 13 14 15 16 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 39 40 42 45 46
97.87 95.74 93.62 91.49 89.36 87.23 85.11 82.98 80.85 78.72 74.47 72.34 70.21 68.09 65.96 61.70 59.57 57.45 55.32 53.19 51.06 48.94 46.81 44.68 42.55 40.43 38.30 36.17 34.04 31.91 29.79 27.66 25.53 23.40 21.28 17.02 14.89 10.64 4.26 2.13
Region
_________________________________________________________________________________________________________
Greece Australia Czech Republic Norway Argentina Italy South Korea South Africa Netherlands Spain Belgium Russia Portugal USA France Taiwan Finland Japan Germany the United Kingdom Sweden Brazil Chile Austria Canada Malaysia Switzerland India Luxembourg Denmark China New Zealand Singapore Hong Kong Indonesia Israel Ireland Thailand Peru Philippines
Europe Oceana Europe Europe Latin America Europe Asia Africa Europe Europe Europe Europe Europe North America Europe Asia Europe Asia Europe Europe Europe Latin America Latin America Europe North America Asia Europe Asia Europe Europe Asia Oceana Asia Asia Asia the Middle East Europe Asia Latin America Asia
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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Income Taxes (Steam, Gas and Hydraulic Turbines and Turbine Generator Set Units) Countries in North America
Value ($K/employee)
Rank
Percentile
Barbados Anguilla Antigua & Barbuda Puerto Rico Martinique Montserrat Greenland Netherlands Antilles USA Cayman Islands St. Pierre & Miquelon Cuba Canada Dominica Bermuda Aruba Bahamas Virgin Islands British Virgin Islands St. Vincent & The Grenadines Jamaica Dominican Republic
5.83 5.66 5.61 5.54 5.10 4.93 4.75 4.60 4.48 4.41 3.19 2.45 2.41 2.19 1.71 0.92 0.59 0.53 0.51 0.21 0.17 0.01
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
95.45 90.91 86.36 81.82 77.27 72.73 68.18 63.64 59.09 54.55 50.00 45.45 40.91 36.36 31.82 27.27 22.73 18.18 13.64 9.09 4.55 0.00
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
Source: Philip M. Parker, Professor, INSEAD, copyright 2007
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4 4.1
MACRO-ACCESSIBILITY IN DOMINICAN REPUBLIC EXECUTIVE SUMMARY
The Dominican Republic is the largest democratic country in the Caribbean, with a Gross Domestic Product of more than $20 billion. It is the 4th-largest importer of U.S. goods in the Western Hemisphere. U.S. products, in general, are still perceived by end-users to be of the best quality. There are several methods for U.S. exporters to enter the Dominican market. One can use locally appointed distributors, a wholly owned subsidiary, joint venture partners, or Dominican importers and wholesalers who also own retail outlets. At the retail sales level, Dominicans prefer seeing the product and expect reliable after-sales service. Quality and responsiveness in after-sales service are becoming increasingly important ingredients in effective marketing strategies. In sales of services and manufactured goods, Dominicans often rely on networking, as well as close family and personal relationships. These characteristics in turn create the need for local agents and distributors or direct, in-country operations to make and sustain these contacts. U.S. firms should seek legal counsel, particularly with regard to Law 173 (the Dealer Protection Law), prior to finalizing agreements with local agents. The top five prospects for U.S. exports to the Dominican Republic include sporting goods and recreational equipment, fabric, cosmetics and toiletries, telecommunications equipment, and hotel/restaurant equipment. The large portion of the imports from the United States reflects high volume and prices for bulk agricultural commodities such as wheat, corn, lumber and tobacco. However, intermediate agricultural products such as soybean meal and oil, animal fat, sweeteners and value-added products are beginning to comprise a larger share of total imports. In August 2002, the government ratified the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), establishing investors’ right to submit disputes to international arbitration and providing a legal framework for enforcement. In March 2003, the government issued a regulatory decree strengthening the Patent Law, which previously did not appear to be in compliance with the provisions of the WTO agreement on Trade Related Aspects of Intellectual Property (TRIPS). The Copyright Law of 2000 offers strong protections, but industry representatives have voiced concern about lack of enforcement, particularly in the area of movie and broadcast piracy. Enforcement of patents also remains deficient, and cases often remain unresolved in the courts pending lengthy appeals processes. Corruption continues to be a concern for investors.
4.2
ECONOMIC FUNDAMENTALS AND DYNAMICS
As part of the IMF conditions, the Dominican Republic moved to a unified exchange rate in 2003, abandoning the former exchange system that was divided between the private sector, which is controlled by commercial banks and exchange houses, and the public sector, which is operated by the Central Bank. The Central Bank now purchases foreign currency from the market at floating rates. In order to comply with the terms of new free trade agreements (FTAs) with CARICOM and five Central American countries, the Dominican government has lowered tariff rates on imports. Further liberalization is likely in the framework of the Free Trade Area of the Americas and, with the eventual signature and ratification of a FTA with the United States, to be associated with the forthcoming U.S.-Central American Free Trade Agreement (DRCAFTA). Most Dominican tariffs now range from 3 to 20 percent, with an average import tariff of 10.7 percent. Pending legislation would decrease the number of tariff rates and reduce the maximum rate for most goods to 15 percent. Rectification of the Dominican tariff bindings for eight agricultural commodities has been agreed at higher
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tariff levels for imports in excess of specified quotas, but Dominican authorities intend to reduce these contingent tariffs as well. The government has fully implemented most Uruguay Round obligations, although certain aspects of implementation are proceeding slowly. Improving, but still inadequate, protections for intellectual property (trademarks, patents, and copyrights) affect investment and business practices. A complex system of licensing and consular approval of invoices impedes imports. While many formal non-tariff barriers have been abolished, reports of corruption and poor organization at the ports are additional impediments to trade. Free trade zones are exempt from most of the restrictions on international trade. The success of the free trade zones demonstrates the ability of the Dominican Republic to compete in global markets when obstacles to trade are reduced. Free trade zone firms in the Dominican Republic are authorized to sell 20 percent of their output domestically, and although this has not been implemented in the past, some companies are beginning to sell free zone products locally.
4.2.1
Government Role in the Economy
The Dominican government has traditionally played a large role in the country’s economic life. In the past, the government was the owner of all public utilities (except telecommunications), an insurance company, the country’s largest bank (Banco de Reservas), and factories producing a variety of goods. Congress passed legislation in June 1997, which allowed the privatization or “capitalization” of state-owned enterprises. The Commission for the Reform of Public Enterprises (CREP), an entity mandated by the June 1997 Law, had its first success with the privatization of the State-owned flourmill, Molinos Dominicanos, in December 1998. The distribution and generation units of the state-owned electricity company, the Corporación Dominicana de Empresas Eléctricas Estatales (CDEEE), were capitalized in the spring of 1999. The privatization of assets of the State Sugar Council (CEA) took place in the fall of that same year. The Dominican Republic has reached agreement on trade pacts with CARICOM and with five Central American countries that will lead to greater regional economic integration. The Dominican Republic participates actively in negotiations on a Free Trade Area of the Americas, and in March 2004 the United States and the Dominican Republic completed negotiations on a bilateral Free Trade Agreement to be integrated with the Central American Free Trade Agreement. The large government presence in the economy and a web of complicated regulations have the effect of politicizing many economic decisions. Business persons typically spend time “lobbying” the government. Institutional difficulties common to developing countries are also present, such as complex permit processes, customs delays and other bureaucratic hurdles. Businesses often find that the labor force is hardworking but untrained. Although the Dominican government has instituted an extensive judicial reform program, it can be difficult and time-consuming to pursue a claim in the Dominican justice system. Bank finance is expensive (unsecured business loans currently carry interest rates of over 30 percent), and long term financing is hard to find. There is no fully functional deposit insurance.
4.2.2
Infrastructure Development
Electricity In 2004, soaring demand, inadequate investment in transmission facilities, increasing government debt for subsidies, and lack of energy conservation have kept production at well below peak levels of demand. Market inefficiencies and problems with non-payment have caused plants to go off line due to inability to pay fuel suppliers and other
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creditors. Load shedding is a common practice, and virtually all industrial enterprises have back-up generators. Some large firms maintain completely independent electricity supplies. As noted, the generation and distribution arms of the State-owned Compañía Dominicana de Empresas Eléctricas Estatales (CDEEE) were capitalized in 1999. This process, together with new investment in power generation, brought about some improvement to the Dominican power sector. In October 2003, the government repurchased all privatized shares of two of the three distribution companies. Problems remain however, as the government and distribution companies continue to face payment difficulties and amass arrears.
Roads and Highways The Dominican Republic has a well-developed road network, which the government continues to improve. Nevertheless, some of the roads and highways are in poor and dangerous condition. Truckers belong to syndicates that regulate prices, increasing the price of haulage, and strikes or protests in some areas sometimes disrupt transport.
Airports There are seven international airports in the Dominican Republic: they are in Santo Domingo (2), Puerto Plata, La Romana, Punta Cana, Santiago, Samana and Barahona. An eighth, El Higuero, has officially been inaugurated but is not yet operational.
Major Ports Santo Domingo and other major cities are serviced by modern port facilities. Haina, located just outside the capital city, has a 2,600-foot long/35-foot draft wharf, a 40-ton container crane, and a 60-acre container yard. Transportation to more than a dozen U.S. ports is available on a weekly basis. There is also daily freight service to Puerto Rico. Other ports are located in the cities of La Romana, Boca Chica, San Pedro de Macorís, and Puerto Plata. A new multimodal container transshipment facility at Caucedo, east of Santo Domingo opened in December 2003. Passenger car ferry service is available between Santo Domingo and Puerto Rico.
Telecommunications The Dominican Republic has one of the most advanced telecommunications networks in Latin America. Services offered by the telephone companies Codetel (now Verizon), Tricom, Centennial and France Telecom include direct distance dialing, international direct distance dialing, line 800, electronic mail, telenet, cellular mobile phones, facsimile, national paging services, and Internet services.
Media Major business newspapers and business or specialized magazines can be purchased locally, and several are available on the Internet. Cable television is also available in most towns and cities, and generally some U.S. and European programming is available. Radio and television are the communications media reaching the largest numbers of Dominicans.
4.3 4.3.1
POLITICAL RISKS Economic Relationship with the United States
The Dominican Republic is the Caribbean’s largest democratic country. It has a long-standing and close relationship with the United States, its principal trading partner and largest market. High rates of Dominican immigration to the United States reflect this close relationship. Dominicans generally have a positive view of the United States, though www.icongrouponline.com
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at times political and economic nationalists resort to anti-Americanism and charges of U.S. interference in the country’s affairs. Few Dominicans seem persuaded by this rhetoric.
4.3.2
Politics and the Business Environment
A highly centralized regulatory and administrative system adversely affects the business climate. The interpretation of laws and regulations is often arbitrary. This has contributed to an unstable and capricious regulatory environment that also presents ample opportunity for corruption – a problem endemic throughout both government and law enforcement. Businesses, domestic as well as foreign, complain that the “rules of the game” are constantly changing. Dominican and foreign business leaders complain of judicial and administrative corruption, and charge that corruption impacts the settlement of business disputes. Dominican expropriation standards have been widely at variance with international norms. A number of foreign firms and individuals have outstanding disputes with the Dominican government concerning expropriated property or non-fulfillment of contractual obligations. Even when compensation has been ordered, investors and lenders often have not received prompt or adequate payment. Businesses still experience problems ranging from unsettled expropriation claims, to unmet contractual obligations in the electric sector, to patent protection that does not meet World Trade Organization standards. The government has worked to make the Dominican Republic more business friendly through privatization and by initiating a program to settle debts and to resolve expropriation cases through issuance of bonds. The successful conclusion of a U.S.-Dominican free trade agreement has further brightened prospects for doing business with the Dominican Republic.
4.3.3
The Political System
The Dominican constitution provides for a popularly elected President and a bicameral Congress (composed of 32 senators and 150 national deputies). The executive branch dominates the political system. Recent constitutional reforms allow the President to be re-elected to a second four-year term. Legislators are elected at the mid-term of the President. The Partido de la Liberación Dominicana (PLD), the Partido Revolucionario Dominicano (PRD), and the Partido Reformista Social Cristiano (PRSC) are the main political parties. Each of these parties tends toward centrist platforms.
4.4 4.4.1
MARKETING STRATEGIES Distribution Channel Options
There are several methods for U.S. exporters to enter the Dominican market. One can use locally appointed distributors, a wholly owned subsidiary, joint venture partners, or Dominican importers and wholesalers who also own retail outlets. The subsidiary and joint venture mechanisms have been enhanced through foreign investment Law no. 16-95. The fundamental purpose of this law is to place foreign investors on an equal footing with local businesspeople, thus guaranteeing equal protection under the law in terms of their respective rights and obligations. A distribution agreement is not required for any of the above.
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152
Agents and Distributors
Although the use of an agent or a distributor is not required, U.S. exporters wishing to market a product or service in the Dominican Republic on a regular basis, without opening offices or maintaining a joint venture should find an agent or a distributor. The Dominican Agent/Distributor Law (Law 173, April 1966) was designed to protect Dominican citizens who work as agents or distributors for foreign companies. Law 173 is complicated and potentially very costly to foreign suppliers, and U.S. firms should seek legal counsel before appointing an agent or distributor in the Dominican Republic. Under Law 173, agents and distributors may claim the right to compensation linked to a multiple of annual sales if the U.S. exporter decides to terminate the relationship. Foreign Investment Law no. 16-95 allows foreign firms to assume direct representation of their products manufactured abroad or in the Dominican Republic without Law 173’s lengthy residency requirements and without the requirement of two-thirds Dominican ownership of distribution companies.
4.4.3
Franchising Activities
After several years of continuous growth, the franchising sector has slowed down in the Dominican Republic. There are approximately 150 franchises established in the Dominican market with more than 700 stores in operation providing over 8,000 direct jobs. Restaurant franchises include Domino’s Pizza, Pizza Hut, McDonald’s, Burger King, Friday’s, Baskin-Robbins, Kentucky Fried Chicken, Taco Bell, Mrs. Field’s, Outback, and Tony Roma’s. Non-food franchises include Radio Shack, GNC Vitamin, Payless Shoes, Alphagraphics, Sir Speedy, Dry Clean USA, Mr. Movies, Ethan Allen, Bombay, Meineke Mufflers, and a number of up-scale clothing outlets, including Liz Claiborne, Benetton, and Tommy Hilfiger.
4.4.4
Direct Marketing Options
Direct marketing has met with some success for low-cost, locally produced services. Avon, Jafra and Amway have established successful direct marketing organizations.
4.4.5
Joint Ventures and Licensing Options
There is considerable joint venture/licensing activity in the Dominican Republic, including manufacturing and services. The Foreign Investment Law provides for opportunities in this area. Before negotiating a joint venture or licensing partnership, legal counsel should be consulted to minimize potential conflicts, unexpected taxes, withholding expenses on royalties, contributions to capital and related aspects of these ventures.
4.4.6
Selling Strategies
At the retail sales level, Dominicans prefer seeing the product and expect reliable after-sales service. Quality and responsiveness in after-sales service are becoming increasingly important ingredients in effective marketing strategies. In sales of services and manufactured goods, Dominicans often rely on networking, as well as on close
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family and personal relationships. These characteristics in turn create the need for local agents and distributors or direct, in-country operations to make and sustain these contacts.
4.4.7
Advertising and Trade Promotion
Most businesses in the Dominican Republic use major local newspapers, television channels and radio stations to advertise their products. When marketing to all social classes, television and radio are the media most used for products. Companies already in the Dominican Republic are well aware of the benefits of participating in local exhibition/trade promotion shows. There are many industry specific expositions in the Dominican Republic.
4.4.8
Pricing Issues
The DR is a price-sensitive market where the price is usually as important as quality and service, if not more. Dominicans are familiar with U.S. pricing practices. Many successful new retail outlets, however, concentrate on quality goods and service support, as Dominican consumers become more affluent and sophisticated. Supplying Dominican customers are increasingly demanding consistent quality support and service. Service and customer support are still a developing concept. Several leading wholesale and retail companies maintain sales volumes without discounting. This is partly attributable to a good reputation for quality service and support, which suggests the importance of after-sales support.
4.4.9
Public Sector Marketing
Dominican Law no. 322 of 1981 states that foreign individuals or firms must be associated with Dominican or “mixed capital” enterprises in order to bid on or execute Dominican government-funded projects. There are exceptions, and variations on levels of participation required for complex projects, and many direct opportunities for foreign bidders exist when project financing is from multilateral banks or foreign government aid sources; in those cases the bidding process is generally open and transparent, and payment is guaranteed by outside sources. The Mejia Administration has tried to establish a more favorable credit reputation and resolve some of the systemic problems affecting irregularities in public contracting in the Dominican Republic. Several unresolved payment disputes from former Administrations remain.
4.4.10
Intellectual Property Risks
To ensure protection of patents and trademarks, the products must be registered at the National Office for Intellectual Property Rights of the Secretariat of State for Industry and Commerce, ONAPI (Oficina Nacional de Propiedad Intelectual.) For protection of copyrights, U.S. firms must contact The National Office for Copyright (“ONDA,” or the Oficina Nacional de Derecho de Autor of the Secretariat of State for Culture).
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The Dominican Republic is a member of the World Trade Organization and signatory of both the Bern and Paris Conventions on Copyrights and Patents and Trademarks, respectively. Nevertheless, protection of intellectual property rights is still weak. Even where the law provides protection, enforcement and remedies are often inadequate. The U.S. Government recognizes some improvement in efforts to improve the intellectual property rights regime. Law 65-00 on copyrights was implemented in August 2000 and provides for strong protection of copyrighted materials; March 2003 regulatory changes to Patent Law 20-00 appear to be compliant with WTO Trade Related Aspects of Intellectual Property Rights (TRIPS) standards. Although the Dominican government has stepped up efforts in some areas, IPR enforcement generally remains inadequate, in part due to lengthy judicial processes.
4.4.11
Hiring Local Counsel
A local attorney can be an important partner in establishing operations and advising on doing business in the Dominican Republic.
4.5 4.5.1
IMPORT AND EXPORT REGULATION RISKS Trade Barrier Risks
Taxes and duties for imported goods (agricultural and non-agricultural) are calculated on the “ad-valorem price,” i.e., CIF price in US dollars multiplied by the unified foreign exchange rate. All duties and taxes are collected in Dominican pesos. There are generally four taxes on imports, except for those subject to exemptions provided by law. These taxes are the following:
Tariff (Arancel) This is the basic import tax, which can be as low as 0 percent and as high as 20 percent.
Luxury Tax (Impuesto Selectivo Al Consumo) This is a consumption tax for luxury imports or “non-essential” goods that ranges between 15 and 60 percent. This tax is calculated on the CIF price. Luxury goods include, among others, perfume, whiskey, motor vehicles and tobacco.
Exchange Surcharge (Recargo Cambiario) This is a ten-percent tax imposed on all imports into the Dominican Republic.
Temporary Import Tax This is a two-percent tax imposed on all temporary imports.
Industrialized Goods and Services Tax (ITBIS - Impuesto de Transferencia a los Bienes Industrializados y Servicios) This is a twelve-percent tax on processed agricultural goods and all non-agricultural goods and services. ITBIS is calculated on he CIF price plus the amount paid for all taxes and duties previously mentioned. Service imports are taxed at the 12% ITBIS rate plus 25%.
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Valuations on Imports
The Dominican Customs Office began to apply the GATT valuation system as of July 1, 2001. All imported goods from WTO-member countries are now taxed taking into consideration the value indicated in the commercial invoice. The Dominican government requested and received authorization from the World Trade Organization to exclude 31 items. The products that were exempted have to pay the import tax as per a minimum value assigned by the Dominican Customs, not as listed on the commercial invoice. For imports from countries not members of WTO, the valuation continues to be based on the minimum valuation lists created by Dominican Customs. There are 24 existing Customs offices in the Dominican Republic: eleven at ports, seven at airport zones, and six on the border with Haiti. The principal offices handling the majority of the cargo are: Port of Haina Oriental, Port of Haina Occidental, Port Multimodal Caucedo, Las Americas International Airport and the Port of San Pedro de Macoris. Customs officials indicate that the average clearance usually takes three days from submission of complete documentation. Clearances can be made in hours if importers make use of express clearance procedures. Anecdotal evidence confirms this information. Many importers are using one of the following express clearance procedures: •
Advance Declaration (Declaracion Anticipada) - Importers may submit customs documentation 25 days prior to the arrival of the shipment.
•
Express Dispatch (Despacho Expreso) - This mode includes advance declaration of the goods and the verification of the shipment by customs officials at the importer’s warehouse. Shipments may be dispatched in four hours when using Express Dispatch.
4.5.3
Licenses Required for Imports
Commerce and Industry Import licenses are not required for most products, except pharmaceutical products (drugs, cosmetics and skin care products) and agro-chemicals. For pharmaceutical products, a license must be obtained at the Secretariat of State for Public Health for each trademark/product imported by the company. The license is valid for a period of five years. Agro-chemicals and fertilizers require an import license from the Secretariat of State for Agriculture issued for every shipment.
Agriculture Although the “No objection” and other types of permits are not within the World Trade Organization (WTO) commitments, the Dominican government often requires them for imports of agricultural commodities. In addition, absorption requirements are needed for some agricultural products. The phytosanitary certificates issued by recognized authorities in the country of origin must accompany live vegetative material used in planting. Imports of animals normally require certificates of origin and other veterinarian documentation to assure disease-free status. Testing is done at the port of entry to reconfirm pest free status. Tariff rate quotas are in place for eight agricultural goods (rice, sugar, chicken parts, pork, corn, onions, milk powder and garlic). Other agricultural goods that often encounter non-tariff barriers are poultry and dairy products. Imports of food and agricultural products are normally facilitated through local distributors. Unless otherwise indicated, the Dominican Republic tends to follow U.S. standards concerning chemical tolerances in foods, packaging and labeling requirements. www.icongrouponline.com
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Controls on Exports
Commerce and Industry No export licenses are required. However, a sworn declaration of exports (Declaracion Jurada de Exportacion or Formulario Unico de Exportacion) should be presented at the port of departure. Free zone companies need only submit certifications from the National Free Zone Council to Centro de Promocion e Inversion (a government organization) to declare and register exports. According to Law 01-04, there is a 5 percent “temporary” tax on all exports required to cover government deficits.
Agriculture A requirement for export licenses for most agricultural exports was lifted in 1993. The Dominican Centro de Promocion e Inversion (CEI-RD) implemented the use of a form to declare exports. Export values are reported in US dollars. In the event the transaction is in any other currency (including RD$), the US$ value is estimated at the official exchange rate.
4.5.5
Documentation Required for Trade
All imports into the Dominican Republic, other than free trade zone imports, require a consular invoice from a Dominican overseas consulate approving the transaction. Many U.S. exporters continue to complain that the fees are rarely nominal and often arbitrarily assessed, creating uncertainty regarding costs for shipments to the Dominican Republic. Private-sector associations and other groups continue to push for a change in the system, but it is a major revenue earner for Dominican consulates as well as for general revenue coffers. An exception applies to shipments from countries where there is not a Dominican Consulate. In such cases, Customs assesses a fee of US$400. Even when shipping from countries that have a Dominican consulate, some importers prefer to pay this $400.00 fee (fine) instead of paying for the consular invoice because this cost does not vary. Imports into free trade zones that are destined for re-export from the Dominican Republic are exempt from this and other customs requirements, such as import licenses, registration requirements, and payment of customs duties based on commercial invoice and airway bills of lading.
4.5.6
Temporary Entry of Goods
Commerce and Industry Temporary entry of goods was adopted by Customs as a business facilitation service. Temporary entry is permitted for exhibition or demonstration purposes, as well as for other temporary work purposes in the Dominican Republic. Customs does not assess duties on temporary goods, but they must be returned. A bond or other suitable security for all or a portion of the value of the goods must be posted at the time of temporary entry. The security will be refunded upon meeting all the terms of temporary entry and proof of shipment out of the country. If the company wishes to sell the products or machinery after making temporary entry, valuation and all relevant duties are determined in accordance with previously noted customs procedures. Temporary entry admittance is granted for a period of three (3) months. If more time is needed, a ren ewal is required at the end of the three months.
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Agriculture There are no provisions for the temporary entry of agricultural products. However, agricultural commodities and food products may be imported under bonded warehousing and for transshipment.
4.5.7
Restrictions on Imports
There are few prohibitions on imports, although discretionary import licenses are required from the Secretariat of Agriculture for most agricultural products. These appear to limit imports of many items that the government perceives as competitive with domestic production.
4.5.8
Local Standards
The Dominican Republic generally accepts U.S. certifications and standards. The Dominican Standardization System follows international guidelines and it is compatible with the purposes of GATT’s Code of Standards. The DIGENOR (Dirección General de Normas & Sistemas de Calidad) is the governmental body overseeing the formulation, publication, and implementation of quality norms in the Dominican Republic. The DIGENOR was created on May 20, 1997 in accordance with Law 602. Rather than creating new standards specific to the Dominican Republic, DIGENOR follows international standards. The Dominican Standardization System (NORDOM or Normas Dominicanas) consists of 619 mandatory and voluntary standards.
4.5.9
Direccion General de Normas y Sistemas de Calidad (DIGENOR)
DIGENOR is the only national standards body library in the Dominican Republic. It is the center of information of the international standards and serves as: •
The National Enquiry Point under the WTO Agreement on Technical Barriers to Trade.
•
Contact Point for Codex Alimentarius Commission.
•
Local Agent for International Organization for Standardization (ISO).
DIGENOR also has membership in the Pan-American Standards Commission (COPANT) and receives assistance from the National Association of Drinking Water Supplies Agencies (ANDESAPA), and the Wastewater Equipment Manufacturers Association (CAPRA.) For the inclusion of standards for healthcare products such as cosmetics and pharmaceuticals, DIGENOR has created a joint commission with the Drugs and Pharmacy Department of the Secretariat of Public Health.
Conformity Assessment Due to a lack of resources at DIGENOR, products are typically tested in foreign, private laboratories.
Product Certification DIGENOR is the authorized institution to provide product certification. The Seal of DIGENOR Compliance (Sello de Calidad DIGENOR) is the certification that DIGENOR provides to manufactured products that meet Dominican www.icongrouponline.com
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standards. Manufacturers interested in obtaining this certification for any of its products should present documentation indicating that a laboratory accredited by an international institution has tested and approved the product. In the case of pharmaceuticals and cosmetics, the products must also receive a certification of approval (Registro Sanitario) from the Drugs and Pharmacy Department of the Secretariat of Public Health. This is a very straightforward process, which only requires a presentation of documents from an accredited international organization such as the Food and Drug Administration. Without this “Registro Sanitario”, pharmaceutical and cosmetic products are not allowed to enter the Dominican Republic.
Accreditation There are no testing laboratories in the Dominican Republic; therefore, DIGENOR will accept documents and assessments prepared by international accreditation bodies or testing laboratories. DIGENOR admits that its surveillance of products entering the country is not as thorough as it should be, due to its lack of resources.
Technical Regulations In the Dominican Republic the final regulations are published and available to the general public for a small fee. Because the country does not create new standards, but follows international standards, there is no need for public discussion of any technical regulations.
Labeling DIGENOR has indicated that products meeting U.S. standards in labeling and marking should have no difficulty in complying with relevant Dominican Regulations. There are special rules for unpacked foods as well as pharmaceutical products. These special rules are more in the area of registration and prior import license approval rather than in marking and labeling requirements. The labels are not required to be in Spanish.
Contact Information Direccion General de Normas y Sistemas de Calidad (DIGENOR) Secretaria de Estado de Industria y Comercio (Secretariat of State for Industry and Commerce) Edificio Oficinas Gubernamentales Juan Pablo Duarte Santo Domingo, Dominican Republic Phone: 809/ 686-2205 Fax: 809/ 688-3843 E-mail:
[email protected] Departamento de Drogas y Farmacias (Drug and Pharmacy Department) Secretaría de Estado de Salud Publica (Secretariat of State for Public Health) Av. San Cristobal No. 48, Ensanche La Fe Santo Domingo, Dominican Republic Phone: 809/ 541-3121 Ext. 2266 Fax: 809/ 566-8737
4.5.10
Free Trade Zone Options
Free Zone Operators (FZO) and enterprises are entitled to 100 percent exemption for extended periods of time from: •
The payment of corporate income tax.
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•
The payment of construction taxes, taxes on loan agreements, and on the recording and transfer of real property from the date of formation of the FZO.
•
The payment of all taxes otherwise due on corporate formation or capital increases.
•
The payment of any municipal taxes that may affect their activities.
•
The payment of import duties and related taxes on raw materials, equipment, construction materials, parts for buildings, office equipment, etc., destined for construction, preparation or operation within the free trade zone.
•
All taxes or duties on exports or re-exports, except for exports that enter into the local market.
•
The business tax (patente) on inventory or assets and from the tax on the transfer of industrialized goods and services (ITBIS).
•
Consular charges on imports consigned to Free Zone operators or enterprises.
•
Import duties on equipment and supplies for the installation and operation of cafeterias, health services, medical assistance, child care centers, entertainment or amenities or other equipment for the well-being of workers.
•
The payment of duties on the importation of transportation equipment, such as trucks, garbage trucks, micro buses, and minibuses for the transportation of employees to and from work, subject to the prior approval in each case of the National Free Zone Council. Such vehicles shall be non-transferable for a period of at least five years.
The following are types of operations that free trade zone companies may engage in: •
Introduce, store, unpack and re-pack, recycle, exhibit, manufacture, mount, assemble, refine, process and deal in any type of product, goods or equipment.
•
Provide internal services, such as design, layout, marketing, telecommunications, printing, data processing, translation, software development and any other similar or related service.
•
Introduce into the free trade zone any and all machinery, equipment, parts, and tools that may be necessary or advisable in their operations.
•
Transfer materials, equipment, machinery, etc. as well as labor and services from one free trade zone enterprise to another or between enterprises of different free trade zones, provided the transit regulations from one free zone to another are fulfilled.
Firms licensed to operate in the free trade zone may also be subject to certain rules of safety, environmental considerations and national security.
4.5.11
Adherence to Free Trade Agreements
The Dominican Republic is a member of the World Trade Organization. In 1998, the Dominican Republic joined with Costa Rica, Nicaragua, Honduras, El Salvador and Guatemala in establishing a Central American-Dominican Republic Free Trade Area. The Dominican government signed a similar agreement with CARICOM in 2000.
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INVESTMENT CLIMATE Openness to Foreign Investment
The Dominican government welcomes foreign investment. However, some laws exist that apply to specific sectors of the economy (e.g., insurance) that may discriminate between domestic and foreign investments. Regulations implementing the 1995 Foreign Investment Law were enacted in September 1996. Under the Foreign Investment Law (No. 16-95), unlimited foreign investment is permitted in all sectors, with the exception of the disposal and storage of toxic, hazardous or radioactive waste not produced in the country; activities negatively impacting public health and the environment of the country; and production of materials and equipment directly linked to national security without authorization from the president. There are no limits on foreign control, or screening of foreign investment in the open sectors. Foreign investors have fully participated at every stage in the capitalization of state enterprises such as the electric company, airport management and sugar mills. In 1997, the government also established the Office for Investment Promotion (OPI), which has proven to be an important contact for potential investors.
4.6.2
Conversion and Transfer Policies
The Central Bank purchases foreign currency from the market. Importers may obtain hard currency directly from commercial banks and exchange houses, as well as from the Central Bank. Foreign currency generated from international credit card companies, international telephone traffic, public sector loan payments, and the sale of oil to foreign flagged carriers must be exchanged at the Central Bank.
4.6.3
Expropriation and Compensation
Dominican expropriation standards have historically been at variance with international norms. A number of U.S. investors have outstanding disputes with the Dominican government concerning expropriated land. Property claims make up the majority of expropriation cases. Most, but not all, seizures have been for purposes of infrastructure, or commercial development. In some cases, claims have existed for many years. Investors and lenders often do not receive prompt or adequate payment for their losses, and payment has been difficult to obtain even when a Dominican court has ordered compensation or the government has recognized a claim. The most recent Dominican governments have expropriated fewer properties than their predecessors and have generally paid compensation in those cases. A law passed in 1999 authorized the issuance of bonds to settle claims against the Dominican government that arose prior to August 16, 1996, including claims for expropriated property.
4.6.4
Dispute Settlement
The Dominican Republic is a civil law country. A number of U.S. investors, ranging from large firms to private individuals, have payment-related, expropriation, or contractual disputes with the Dominican government and its government-owned enterprises. Both free trade zone and non-free trade zone companies face dispute resolution problems. U.S. firms, obliged to respect the U.S. Foreign Corrupt Practices Act, have had particular difficulty accessing justice within the Dominican system and defending their interests in court. Recent judicial reforms have somewhat improved the administration of justice in the country, but judicial procedures are of uneven quality. In mid-2003, the Senate passed a law creating a special, independent, anti-corruption prosecutor with national www.icongrouponline.com
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jurisdiction. Also in 2003, the government passed a law reforming the process for hiring prosecutors and making them less susceptible to political influence. In 2002, the government passed a new penal process code that defines legal judicial procedures and makes them more transparent. Nevertheless, the judicial system is often unable to enforce decisions in favor of foreign investors. In April 2002, the Dominican Republic became a member of the International Center for the Settlement of Investment Disputes (“ICSID,” also known as the “Washington Convention”). In August 2002, the Dominican Republic ratified the 1958 New York Convention on Arbitral Awards, thereby recognizing the right of companies to pursue international arbitration.
4.6.5
Performance Requirements and Incentives
There are no special investment incentives or other types of favored treatment given to foreign investors, nor are there requirements for investors to export a certain percentage of their production. Foreign companies are unrestricted in their access to foreign exchange. Law 69 requires local sourcing when components are of approximately equal cost and quality compared to imports, but this law has not appeared to hinder investors. In addition, there are no requirements that foreign equity be reduced over time or that technology be transferred according to certain terms. The government imposes no location, local ownership, local content, or export requirements or conditions on foreign investors. The Dominican labor code establishes that 80 percent of the labor force of a foreign company, including free trade zone companies, be composed of Dominican nationals (although the management or administrative staff of a foreign company is exempt from this regulation). The Foreign Investment Law provides that licensing contracts for the use of patents or trademarks, the leasing of machinery and equipment, and the provision of technical know-how must be registered with the Central Bank’s Directorate of Foreign Investment.
4.6.6
Right to Private Ownership and Establishment
The Dominican Constitution guarantees the freedom to own private property and to establish businesses. The Foreign Investment Law grants foreign investors the same rights as domestic investors. Public enterprises are not given preference over private enterprises.
4.6.7
Protection of Property Rights
Secured interests in both movable and real property are recognized and generally respected. Mortgages on real property must be registered in the Registry of Titles where the property is located. Real property rights registered under the Dominican Republic’s Torrens system of real property registration are binding on third parties. Provision in the law is also made for registration of liens on personal property. Some United States citizens have reported problems with fraudulent deeds or claims against their properties and difficulties enforcing property rights.
4.6.8
Transparency of the Regulatory System
During the last few years, the Dominican government has carried out a major reform effort aimed at improving the transparency and effectiveness of laws affecting competition. On November 20, 2002, Congress passed the Financial Monetary Law (Law 183-02) to regulate banks and other key players in the financial sector. The 2003 IMF standby agreement, which is not currently in effect, requires additional www.icongrouponline.com
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regulation and supervision of the banking sector. The primary sections of the Market Regulation Code have all been approved, including legislation in critical areas of the Patent and Trademark Law, telecommunications, copyright, and trade practices and safeguards. The lone exception is in the area of consumer protection. As in many developing countries, however, red tape and differences between law and actual practice are problems. Enforcement efforts are sporadic.
4.6.9
Capital Market Risks
The Dominican stock market, the Bolsa de Valores de Santo Domingo, was founded in 1991. Since beginning operations, the Bolsa has handled initial offerings of commercial paper. The private sector has access to a variety of credit instruments. Foreign investors are able to obtain credit on the local market, but tend to prefer less expensive offshore sources. There are 14 multi-service banks, 15 development banks, 18 savings and loan associations, one mortgage bank, 69 finance companies, 23 loan houses, and one national housing bank.
4.6.10
Political Violence
There have been sporadic outbreaks of protest in some of the poorer areas of the Dominican Republic over spiraling electricity costs and lengthy rolling blackouts. Occasional labor protests are generally peaceful.
4.6.11
Corruption
Corruption remains a pervasive problem in government and within law enforcement agencies nationwide. Corruption and the need for reform efforts are openly and widely discussed.
4.6.12
Bilateral Investment Agreements
In March 2004, the Dominican Republic completed negotiating a comprehensive free trade agreement with the United States, which will associate the country with the Central American Free Trade Agreement (CAFTA). The Dominican Republic has a Bilateral Investment Treaty with Spain and numerous bilateral trade agreements with Central American countries, but these do not provide the level of protection to investors generally offered by U.S. bilateral investment treaties. An Agreement for the Exchange of Tax Information between the United States and Dominican Republic has been in effect since 1989.
4.6.13
OPIC and Other Investment Insurance
The Overseas Private Investment Corporation has been active in the Dominican Republic with both insurance and loan programs. The Dominican government is a party to the Multilateral Investment Guarantee Agency (MIGA) Agreement.
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Labor
The Dominican Constitution provides for the right of workers to strike (and for private sector employers to lock out workers). The Dominican Labor Code, which became law in June 1992, is a comprehensive piece of legislation which establishes policies and procedures for many aspects of employer/employee relationships, ranging from minimum wage levels, hours of work, overtime and vacation pay, to severance pay, causes for termination, and union registration. The labor code also requires that 80 percent of non-management workers of a company be Dominican nationals. The standard workweek is 44 hours. Most jobs pay salaries based on the minimum wage. Some labor shortages exist in professions requiring lengthy education or technical certification. An ample labor supply is available, although there is a scarcity of skilled workers and technical supervisors. Most employers have found the local work force competent, trainable, and cooperative. Foreign employers are not singled out when labor complaints are made. About 10 percent of the nation’s work force is unionized. The labor code specifies that 20 percent or more workers in a company may form a union. Before a union may enter into a collective bargaining agreement or officially call a strike, however, it must have the support of an absolute majority of all company workers, whether unionized or not; have previously attempted to resolve the conflict through mediation; provided written notification to the Ministry of Labor of the intent to strike; and waited 10 days from that notification before striking. Due to these stringent requirements, brief work stoppages are more common than lengthy strikes. Collective bargaining is legal and may take place in firms in which a union has gained the support of an absolute majority of the workers. Very few companies have collective bargaining pacts. The Dominican labor code stipulates that workers cannot be dismissed because of trade union membership or union activities; however, in practice, it appears workers are sometimes fired because of union activities. The Dominican labor code establishes a system of labor courts for dealing with disputes. While cases do make their way through the labor courts, enforcement of judgments is not 100 percent reliable. Many of the major manufacturers in the free trade zones (FTZs) have voluntary “codes of conduct” that include workers’ rights protection clauses, but it is not clear whether these incorporate the ILO’s Fundamental Principles and Rights at Work. In general, workers are rarely familiar with such codes or the principles they set out, and no independent monitoring system exists to ensure that these codes are respected.
4.6.15
Free Trade Zones and Free Ports
The Dominican Republic’s free trade zones (FTZs) are regulated by Law 8-90, which provides for 100 percent exemption from all taxes, duties, charges and fees affecting production and export activities in the zones. These incentives are for 25 years for zones located near the Dominican-Haitian border, and 15 years for those located throughout the rest of the country. This legislation is managed by the Free Trade Zone National Council (CNZF), a joint private sector/government body. Among its other powers, the CNZF has discretionary authority to extend the time limits on these incentives. Hard currency flows from the free trade zones are handled via the free foreign exchange market. Foreign and Dominican firms are afforded the same investment opportunities both by law and in practice. In general, firms operating in the free trade zones experience far fewer bureaucratic and legal problems than do firms operating outside the zones. Exporters/investors seeking further information from the CNZF may contact: Consejo Nacional de Zonas Francas Leopoldo Navarro No. 61
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Edif. San Rafael, piso no. 5 Santo Domingo, D.R. Phone: (809) 686-8077 Fax: (809) 686-8079 and 688-0236 Web site: www.cnzfe.gov.do
4.7 4.7.1
TRADE AND PROJECT FINANCING The Banking System
The Central Bank of the Dominican Republic executes the monetary policy and issues national currency (Dominican pesos), maintaining its value against foreign currencies. The Central Bank also regulates the exchange rates and manages external payments. Commercial banks are the main formal source of private sector financing. Most loans are fixed-term loans where the borrower is required to make either periodic payments of principal and interest or a single balloon payment of the entire balance at the loan’s termination. Most commercial lending is short term, ranging from 30-90 days up to 1-3 years for working capital. Equipment purchases are often financed for up to 5 years. These loans are reviewed on a case-by-case basis. Financing for construction or tourist projects has terms of 12 years or more.
4.7.2
Foreign Exchange Control Risks
The Monetary Board sets monetary policy and oversees Central Bank operations. It also sets banking and financial norms through resolutions. All foreign exchange transactions operate in the private market where all sectors of the Dominican economy are free to buy and sell foreign exchange through commercial banks and exchange houses (casas de cambio). The exchange rate varies depending on the fluctuations of offer and demand.
4.7.3
General Financing Availability
Interest rates are determined by market conditions. Foreign companies cannot obtain domestic credit for a period greater than one year without prior approval from the Central Bank (Law 861, article 28 of July 1978).
4.7.4
Financing Export Strategies
The most common forms of payment are letters of credit, cash (most Dominican companies maintain dollar accounts abroad), and supplier credit when a trading relationship has been established. Another form of payment that has been recently used is electronic transfer. Payment through credit card for business purchases is also common. Nevertheless, American firms should be cautious accepting credit cards due to increased fraud.
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Types of Available Export Financing and Insurance
United States Ex-Im Bank is active in the Dominican Republic, financing the U.S. private sector. The Overseas Private Investment Corporation (OPIC) facilitates financing and insurance for private sector projects generally, and, only under limited circumstances, public sector projects. OPIC windows are currently closed for the Dominican Republic. The U.S. Trade and Development Agency (TDA) promotes American private sector participation in developing and middle-income countries, with special emphasis on economic sectors that represent significant U.S. export potential - through the funding of feasibility studies, orientation visits, specialized training grants, business workshops, and various forms of technical assistance. TDA programs are available to the Dominican Republic.
4.7.6
Financing Projects
The Inter-American Development Bank provides funding primarily to public sector entities for the design and execution of projects. IDB projects provide U.S. suppliers of goods and services significant export opportunities, mainly in the transportation, environmental, health, education, urban development, tourism, agriculture and energy sectors. Approved projects in the Dominican Republic include: low/moderate income habitat program, financial reform consolidation program, protection and sustainability of social reforms program, strengthening of foreign trade management, strengthening and regulation of the banking system, institution building for the information society, development of competitive advantages and program to support implementation of pension reform. The International Bank for Reconstruction and Development (IBRD), a member of the World Bank Group, gives long-term loans at market-related rates. Typically the World Bank does not finance the entire cost of a project. It finances only the components of a project purchased with foreign exchange. Active projects in the Dominican Republic include: social crisis response adjustment loan, financial sector technical assistance, power sector technical assistance, health reform support, early childhood education project, HIV/AIDS prevention and control, global distance learning, wastewater disposal in tourism centers, and telecommunication regulatory reform.
4.8
LOCAL BUSINESS PRACTICES
Normal business attire is the rule. Business hours are generally from 8:00 a.m. to 5:00 p.m., Monday through Friday. Government offices work from 7:30 a.m. to 2:30 p.m., Monday through Friday. Some companies work on Saturday mornings. The lunch hour is from 12:00 p.m. to 1:00 p.m. or 1:00 p.m. to 2:00 p.m. Lunch meetings are common; breakfast meetings are becoming more common, particularly among companies doing business internationally. Business appointments are generally required, but punctuality is not a consistent part of Dominican business practices. Most Dominican businesspeople speak English, but communication in Spanish is more prevalent. Business cards are exchanged.
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KEY CONTACTS U.S. Government Contacts
U.S. Department of Commerce U.S. Commercial Service Ave. Pedro Henriquez Urena No. 133 Edificio Empresarial Reyna I, 5th Floor Santo Domingo, Dominican Republic Telephone: 809/ 227-2121 Ext. 221 and 228 Fax: 809/ 920-0267 E-mail:
[email protected] Web site: www.BuyUSA.gov/caribbean David K. Katz, Regional Commercial Counselor E-mail:
[email protected] Dennis A. Simmons, Regional Commercial Attache E-mail:
[email protected] María Elena Portorreal, Regional Senior Commercial Specialist E-mail:
[email protected]
U.S. Department of Agriculture Foreign Agricultural Service Ave. Pedro Henriquez Urena No. 133 Edificio Empresarial Reyna I, 4th Floor Santo Domingo, Dominican Republic Phone: 809/ 227-0112 Ext. 275 Fax: 809/ 732-9454 E-mail:
[email protected] Web site: www.usemb.gov.do/FAS David Salmon, Counselor for Agricultural Affairs E-mail:
[email protected] Carlos G. Suarez, Senior Agricultural Specialist E-mail:
[email protected]
Department of State United States Embassy Corner of Calle Cesar Nicolas Penson and Calle Leopoldo Navarro Santo Domingo, Dominican Republic Phone: 809/ 221-2171, ext. 4335 Contact: Michael Meigs, Economic and Political Counselor E-mail:
[email protected]
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Dominican Republic Government Offices
Secretaria de Estado de Industria y Comercio (Secretariat of State for Industry and Commerce) Ave. Mexico, Edificio de Oficinas Gubernamentales Juan Pablo Duarte, Piso 7 Santo Domingo, Dominican Republic Phone: 809/ 688-2449 and 685-5171 Fax: 809/ 686-1973 E-mail:
[email protected] Web page: www.seic.gov.do Oficina Nacional de Derecho de Autor - ONDA (National Office for Copyrights) Calle Modesto Diaz No. 2, Zona Universitaria Edificio del Archivo General de La Nacion Santo Domingo, Dominican Republic Phone: 809/ 508-7742 Fax: 809/ 508-7575 E-mail:
[email protected] Web page: www.onda.gov.do Oficina Nacional de Propiedad Intelectual (Intellectual Property Rights Office) Leopoldo Navarro esq. Mexico Edificio de Oficinas Gubernamentales Juan Pablo Duarte (El Huacal) Santo Domingo, Dominican Republic Phone:809/ 689-6064 ext. 243 Fax: 809/ 688-7173 Secretaria de Estado de Agricultura (Secretariat of State for Agriculture) Kilometro 6 ½, Autopista Duarte Santo Domingo, Dominican Republic Phone: (809) 547-3888 Fax: (809) 547-1692 E-mail:
[email protected] Web site: www.agricultura.gov.do Direccion General de Aduanas (General Directorate of Customs) Ave. Mexico Santo Domingo, Dominican Republic Customs Director Phone: (809) 688-7070 Fax: (809) 687-3486 E-mail:
[email protected] Web page: www.dga.gov.do Centro de Promocion e Inversion de la Republica Dominicana (CEI-RD) (Investment and Promotion Office) Plaza Independencia www.icongrouponline.com
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Santo Domingo, Dominican Republic Phone: 809/ 530-5505 Fax: 809/530-8208 Web site: www.cei-dr.gov.do Instituto de Estabilizacion de Precios (INESPRE) (Price Stabilization Institute) Plaza Independencia Santo Domingo, Dominican Republic Phone: 809/ 530-0020 ext.2005 Fax: 809/ 531-0198 Instituto Azucarero Dominicano (Dominican Sugar Institute) Ave. Winston Churchill No. 606 Santo Domingo, Dominican Republic Phone: 809/ 532-5571 Fax: 809/ 533-2402 E-mail:
[email protected] Web page: www.inazucar.gov.do Patronato Nacional de Ganaderos (National Livestock Patronage) Ciudad Ganadera Santo Domingo, Dominican Republic Phone: 809/ 535-7165 Fax: 809/ 535-7167 Contact: Dr. Joselin Rodriguez Conde, President E-mail:
[email protected] Instituto Interamericano de Ciencias Agrícolas (IICA) (Interamerican Institute for Agricultural Sciences) Fray Cipriano De Utrera Esq. República del Líbano Centro de Los Heroes Santo Domingo, Dominican Republic Phone: 809/ 533-2797 Fax: 809/ 532-5312 Contact: Dr. Rafael Marte, Representative E-mail:
[email protected] Web page: www.iicard.org Banco Agricola de la Republica Dominicana (Agribusiness Bank of the Dominican Republic) Ave. Independencia Santo Domingo, Dominican Republic Phone: 809/ 535-8088 exts. 2001, 2002, 2003 Fax: 809/ 508-6212 Web page: www.bagricola.gov.do Centro Para el Desarrollo Agropecuario Forestal Jose A. Soler No. 50 Santo Domingo, Dominican Republic Phone: 809/ 544-0616 www.icongrouponline.com
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Fax: 809/ 544-4727 Contact: Lic. Altagracia Rivera de Castillo, Executive Director E-mail:
[email protected] Web site: www.cedaf.org.do
4.9.3
Chambers of Commerce
American Chamber of Commerce of the Dominican Republic Ave. Sarasota No. 20, Torre Empresarial AIRD, 6th Floor Santo Domingo, Dominican Republic Phone: (809) 381-0777 Fax: (809) 381-0303 Contact: William Malamud, Executive Vice President E-mail:
[email protected] Web site: www.amcham.org.do Camara de Comercio y Produccion de Santo Domingo (Santo Domingo Chamber of Commerce) Arzobispo Nouel No. 206 Phone: (809) 682-2688 Fax: (809) 685-2228 Santo Domingo, Dominican Republic Contact: Lic. Milagros Puello, Executive Director E-mail:
[email protected] Web site: www.ccpsd.org.do Camara de Comercio y Producción de Santiago, Inc. Mr. Iván J. Reynoso S., Executive Director Av. Las Carreras No. 7 Edif. Empresarial Santiago, Dominican Republic Phone: 809/ 582-2856 Fax: 809/ 241-4546 Email:
[email protected] Web Site: www.camarasantiago.com
4.9.4
Trade and Industry Associations
Consejo Nacional de la Empresa Privada, Inc. - CONEP Av. Sarasota No. 20 Torre Empresarial, 12th floor Santo Domingo, Dominican Phone: 809/ 472-7531 Fax: 809/ 472-7540 Contact Mrs. Elena Villeya de Paliza, President E-mail:
[email protected] Junta Agroempresarial Dominicana (JAD) (Dominican Agribusiness Council) Euclides Morillo No. 51, Arroyo Hondo
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Santo Domingo, Dominican Republic Phone: 809/ 563-6178 Fax: 809/ 566-7722 Contact: Osmar Benitez, Executive Vice President E-mail:
[email protected] Web site: www.jad.org.do Asociacion Nacional de Importadores (Dominican Importers’ Association) Roberto Pastoriza No. 16 Condominio Diandi XIII Santo Domingo, Dominican Republic Phone: 809/ 562-6909 Fax: 809/ 541-2574 Contact: Dr. Andres Dauajre, President E-mail:
[email protected] Asociacion Dominicana de Exportadores (Adoexpo) (Dominican Exporters Association) Winston Churchill No. 5 Santo Domingo, Dominican Republic Phone: 809/ 532-6779 Fax: 809/ 532-1926 Contact: Jose Antonio Flaquer, President E-mail:
[email protected] Asociacion de Industrias de la Republica Dominicana (Association of Manufacturers of the Dominican Republic) Ave. Sarasota No. 20, Torre Empresarial AIRD, 12th Piso Santo Domingo, Dom. Rep Phone: 809/ 472-0000 Fax: 809/ 472-0303 Contact: Lic. Yandra Portela, President E-mail:
[email protected] Fundacion Dominicana de Desarrollo (Dominican Development Foundation) Mercedes No. 4, Zona Colonial Santo Domingo, Dominican Republic Contact: Ada Wiscovitch, Executive Director Phone: 809/ 688-8101 Fax: 809/ 686-0430
4.9.5
Multilateral Development Bank Offices
Interamerican Development Bank (IDB) Banco Interamericano de Desarrollo Ave. Winston Churchill Esq. Luis F. Thomen Edificio BHD Phone: 809/ 562-6400, 562-1547 Fax: 809/ 562-2607 www.icongrouponline.com
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Santo Domingo, Dominican Republic Contact: Moises Pineda, Country Representative Web site: www.Iadb.org/dominicana
4.9.6
U.S. Trade-Related Offices
Trade Information Center Phone: 1-800-USA-TRADE (1-800-872-8723) Office of Caribbean Affairs Phone: 202/ 482-0407 Fax: 202/ 482-0464 Contact: Valerie Dees E-mail:
[email protected] U.S. Department of Agriculture Foreign Agriculture Service Trade Assistance and Promotion Office Telephone: 202/ 720-7420
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5 5.1
DISCLAIMERS, WARRANTEES, AND USER AGREEMENT PROVISIONS DISCLAIMERS & SAFE HARBOR
Summary Disclaimer. This publication ("Report") does not constitute legal, valuation, tax, or financial consulting advice. Nor is it a statement on the performance, management capability or future potential (good or bad) of the company(ies), industry(ies), product(s), region(s), city(ies) or country(ies) discussed. It is offered as an information service to clients, associates, and academicians. Those interested in specific guidance for legal, strategic, and/or financial or accounting matters should seek competent professional assistance from their own advisors. Information was furnished to Icon Group International, Inc. ("Icon Group"), and its subsidiaries, by its internal researchers and/or extracted from public filings, or sources available within the public domain, including other information providers (e.g. EDGAR filings, national organizations and international organizations). Icon Group does not promise or warrant that we will obtain information from any particular independent source. Published regularly by Icon Group, this and similar reports provide analysis on cities, countries, industries, and/or foreign and domestic companies which may or may not be publicly traded. Icon Group reports are used by various companies and persons including consulting firms, investment officers, pension fund managers, registered representatives, and other financial service professionals. Any commentary, observations or discussion by Icon Group about a country, city, region, industry or company does not constitute a recommendation to buy or sell company shares or make investment decisions. 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objectives, financial situation or particular needs of any particular person or legal entity. With respect to any specific company, city, country, region, or industry that might be discussed in this report, investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the information in this report. Investing in either U.S. or non-U.S. securities or markets entails inherent risks. In addition, exchange rate movements may have an effect on the reliability of the estimates provided in this report. Icon Group is not a registered Investment Adviser or a Broker/Dealer.
5.2
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