How is equity to be determined?
- § 198 (1) Austrian Commercial Code (Unternehmensgesetzbuch) defines equity as total assets minus provisions, liabilities and accruals. For corporations, § 224 (3) explicitly prescribes the breakdown of equity to be applied.
- Equity includes untaxed reserves (compare § 224 (3) B). Please note that equity ratios published by the OeNB do not reflect tax liabilities.
Which components must be included in risk capital?
Apart from equity (including untaxed reserves), provisions for severance pay, pensions and other long-term benefits as specified in the annex to the financial statements must be included.
Do current assets include accruals?
Yes, current assets include accruals.
Do accounts receivable and payable extend to affiliated companies and investee companies?
No, they do not.
What is the data source for depreciation/amortization and procurement figures?
The depreciation figures derive directly from the income statement pursuant to § 231 (2) No. 7 Austrian Commercial Code.
Why are operating profits not adjusted for depreciation and amortization?
In order to meet the requirements of external financial analysts; this result is meant to serve as a proxy for EBITDA (Earnings before Interest, Tax, Depreciation and Amortization).
How should adjusted figures be treated? Are readers who do not have access to underlying data able to reconstruct the calculation of these indicators? Are there any general markups that could be used?
All adjusted ratios serve to facilitate comparisons between partnerships and corporations:
For example, the staff costs of partnerships need to be adjusted for imputed wages (i.e. the latter need to be added) to be comparable with the staff costs recorded by corporations in their annual financial statements. Unfortunately, such ratios are not easy to reconstruct for readers lacking access to the data. Note that the Austrian Institute for SME Research provides guidance on how to calculate imputed wages and interest.
Calculation of financing costs:
This item refers only to interest on external debt.
How are liability-side accruals treated?
Accruals are covered by liabilities.
Why are there two cash flow ratios – cash flow/debt and adjusted cash flow/debt ratios – and which of these ratios should be used in general?
- See also the comments on should adjusted figures be treated?
- The cash flow/debt ratio is basically a measure of net debt adjusted for current liquid assets and cash at bank. This concept is commonly used in European countries, e.g. France, Italy and Spain.
- The adjusted cash flow/debt ratio has been found to be separable, though volatile, in statistical models and appears suited to identifying profitability problems that could lead to insolvency.
Does investment refer to additions as shown in the fixed assets schedule, or to additions adjusted for the depreciated cost of disposals?
Additions as shown in the fixed assets schedule.
Why do investment ratios also include depreciation of marketable securities? Would it not be possible to consult the fixed assets schedule for all depreciation of investment assets?
As noncorporations are not obliged to break down depreciation under § 231 (7) Austrian Commercial Code and as many small and medium-sized enterprises are not obliged to draw up a fixed assets schedule, they record only depreciation totals. Still, meaningful investment ratios can be calculated from larger data sets if “fuzzy” depreciation figures are acceptable.
How do you calculate operating income?
Operating income comprises items 1 through 4 of the statutory breakdown prescribed by § 231 (2) Austrian Commercial Code.
1. net sales
2. change in inventories
3. other own work capitalized
4. other operating income
What components do current liabilities include?
Current liabilities in our definition breaks down into liabilities, provisions with a maturity of up to one year, and accruals.
This item does not include untaxed reserves (deferred tax expenditure is not taken into account).
Why is the value added per euro of staff costs including imputed wages generally larger than the value added per euro of staffcosts?
For corporations, staff costs include imputed wages, while imputed wages need to be specifically added to the staff costs of sole proprietorships and partnerships to arrive at comparable figures. Hence, if a country has a largeshare of sole proprietorships and partnerships, the share of imputed wages in staffcosts will be rather large, as a result of which theratio of value added to staffcostcosts is correspondingly lower.Please note that the share of partnerships differs across sectors.