Financial indicators of merchants (individual merchants and commercial companies) provide summarised information on liquidity, profitability and solvency of merchants.

Definitions

Absolute liquidity ratio shows the share of current liabilities the company can cover in the closest future.

Activity ratio shows how efficiently the company uses resources in its disposal.

In the event the company has too many assets, any further investments in the assets are unnecessary. In its turn, if there is a shortage of assets, it might imply that the company operates inefficiently.

Commercial profitability shows company’s profit from a net turnover unit before and after taxes.

Economic profitability allows determining the amount of profit per one unit of company’s assets.

Financial profitability shows the amount of profit the company has gained per one unit of capital.

Liquidity characterises company’s ability to clear its current liabilities at any time.

Analysing liquidity in company’s balance sheet, positions of current assets grouped by liquidity level (speed) are compared with current liabilities. The key task of liquidity analysis is evaluation of company’s solvency. For this purpose total liquidity and absolute liquidity ratios are used. The difference lies only in the structure of current assets, which can be directed for clearing current liabilities.

Ratio between the amount of profit and another indicator related to the amount of the respective profit.

Normally, invested capital or property, as well as net turnover are considered as indicators influencing the size of profit. 

High level of all profitability indicators is always positively assessed. Low level of profitability indicates that there are problems in the company’s development, which left neglected, might lead to bankruptcy.

Ratio between liabilities and own capital characterises company’s financial independence from external debts, as well as ratio between liabilities and own capital.

It is used to judge about company’s financial independence. Threshold for this ratio is set at 1.0. 

The share of liabilities in the balance sheet is an indicator characterising leverage ratio in total capital.

The share of liabilities in the balance sheet should be as small as possible. High share of liabilities in the balance sheet means that the company must pay high interest rate for loans and it can loose the option to receive additional loans.

Solvency characterises the structure of company’s funds and presents company’s ability to cover current and long-term liabilities.

Low level of total liquidity ratio means that the company might face difficulties in settling current liabilities.

It is considered that in normal circumstances this ratio should fall between 1.0 and 2.0.

Turnover of all assets shows how efficiently company’s assets are used for net turnover formation.

The level of this ratio should be as high as possible. In the event the value falls within the boundaries between 1.0 and 2.0 it is much below the average level of soundly operating companies.

Data availability

Dissemination format and Release calendar

Classifications

Statistical Classification of Economic Activities in the European Community NACE Rev. 2 is used for the survey.

A Classification Catalogue with classification codes and their explanations has been published on the CSB website.

Customised data sets

If you would like to obtain statistical data that are not available in publications or in the CSB online data base, please send us an information request:
 - postal mail: 1 Lāčplēša Street, Riga, Latvia, LV-1301;
 - e-mail: info [at] csb [dot] gov [dot] lv;
 - visiting Information centre.

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Data collection

Survey method and source data

Data source for the survey is annual reports of companies submitted to the State Revenue Service containing data from merchants’ balance sheet and profit or loss account.

Statistical population

The survey covers economically active merchants.

The survey on financial analysis of merchants does not include data on banks, investment brokers, investment management authorities, insurance companies, pension funds and budgetary institution.

Statistical processing

Calculation methods

Indicators are calculated on the basis of the information of annual reports of companies submitted to the State Revenue Service.

Information is collected in breakdown by type of activity at NACE Rev.2 two digit level.

Share of liabilities in the balance sheet is calculated as follows: all creditors/ balance sheet assets.

Share of current liabilities in the balance sheet is calculated as follows: current creditors/ balance sheet assets.

Ratio of liabilities against own capital is calculated as follows: all creditors/ own capital.

Total liquidity is calculated as follows: current assets/ current liabilities.

Absolute liquidity is calculated as follows: (current financial investment + cash)/ current creditors.

Turnover of all assets is calculated as follows: net turnover/ average value of balance assets.

Commercial profitability before taxes is calculated as follows: profit or loss before taxes/ net turnover (%).

Commercial profitability after taxes is calculated as follows: profit or loss after taxes/ net turnover (%).

Economic profitability before taxes is calculated as follows: profit or loss before taxes/ average value of balance sheet assets (%).

Economic profitability after taxes is calculated as follows: profit or loss after taxes/ average value of balance sheet assets (%).

Financial profitability before taxes is calculated as follows: profit or loss before taxes/ average value of own capital (%).

Financial profitability after taxes is calculated as follows: profit or loss after taxes/ average value of own capital (%).

Data revision

Data are final and are not revised, excluding cases when significant mistakes are detected in enterprise reports.

Confidentiality

Confidentiality of the information provided by respondents is protected by the Section 17 of the Statistics Law stipulating rights and obligations of the Central Statistical Bureau of Latvia and other state authorities producing official statistics. Read more

Contact person on methodology

Name Surname Telephone Position e-mail
Baiba Laķe +371 67366663 Senior Officer baiba [dot] lake [at] csb [dot] gov [dot] lv

Last update

06.01.2015

Financial indicators of merchants (commercial companies)

Indicators of Non-financial merchants

Profit or loss and net turnover of financial merchants (commercial companies)

Explanation of symbols

-

Magnitude zero

0

Less than half of the unit employed

...

Data not available or too uncertain for presentation

X

Figure not applicable because column heading and stub line make entry impossible, absurd or meaningless

.

Data not released for confidentiality reasons

If data are absolute numbers

0

Magnitude zero