8142.0 - Business Operations and Industry Performance, Australia, Preliminary, 2000-01  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 16/05/2002   
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BUSINESS AVERAGES

These are derived by dividing the estimate of the financial variable in question by the number of operating businesses for that year.


BUSINESS COMPARISONS

Compares the profit margin, return on assets and return on net worth for each industry across quartiles. The quartiles divide the units at the 75, 50 and 25 percentile point. For example, table 8, shows that in the Construction industry, those businesses in the highest quartile (75% mark or higher) had a profit margin of 20.5% or more in 1999–2000. While those in the lowest quartile (25% mark or lower) had a profit margin of less than 0.9%. The median value was a profit margin of 7.5%.

For conceptual reasons, the calculation of the quartiles do not include units which reported zero profit, zero assets or zero net worth. For example where net worth equals zero, it was not possible to calculate Return on net worth.


BUSINESS PROFITABILITY

The proportion of businesses that made a profit, loss or broke even. Broke even is defined as those businesses incurring a profit or loss of less than $500.


ECONOMIC ACTIVITY SURVEY

An annual business survey which is one of the sources of the statistics presented in this publication.


EMPLOYMENT

Includes working proprietors, working partners, permanent, part-time, temporary and casual employees, and managerial and executive employees working for a business during the last pay period in June each year. Employees absent on paid or prepaid leave are included.


GROSS FIXED CAPITAL FORMATION

Gross fixed capital formation is measured by the total value of a producers acquisitions, less disposals of fixed assets during the accounting period plus certain additions to the value of non-produced assets realised by the productive activity of institutional units. Fixed assets are tangible or intangible assets produced as output from processes of production that are themselves used repeatedly or continuously in other processes of production for more than one year.


INCOME FROM SERVICES

Includes repair, maintenance and service income and fees, income from work done or sales made on a commission basis, delivery or installation charges which are invoiced separately to customers, advertising income and management fees/charges from related or unrelated businesses. As a result of revised international standards, income from royalties from intellectual property are also a component of estimates of income from services commencing with estimates for 1997-98. Excluded are rent, leasing and hiring income, government bounties and subsidies, income from natural resource royalties, interest income and dividends.


INDUSTRY VALUE ADDED

Represents the value added by an industry to the intermediate inputs used by that industry. From 1997-98, IVA has replaced IGP as the official measure of the contribution by industries to GDP. While IVA and IGP both represent gross output less intermediate inputs (or alternatively, the value added to intermediate inputs), introduction of new international standards for measuring economic variables has meant changes to the way in which gross output and intermediate inputs are defined, as follows.


Trading profit
plus Operational funding from Government
plus Own account capital work
equals Capitalised wages and salaries
plus Capitalised purchases
less Capitalised purchases
equals IGP
plus Computer software (non capitalised) expense
plus Indirect taxes (fringe benefits tax, payroll tax, land rates and taxes)
plus Exploration expenditure written off
less Intellectual property royalty expense
equals IVA


INTEREST COVERAGE

The number of times over that businesses can meet their interest expenses from their earnings before interest and taxation, i.e.


INVESTMENT RATE

The proportion of industry value added used to acquire capital, i.e.


LARGE BUSINESSES

See under 'Classification by size' in paragraph 13 of the explanatory notes.


OTHER BUSINESS

See under 'Classification by size' in paragraph 13 of the explanatory notes.


NET WORTH

Total assets minus total liabilities. This is equal to the interests of shareholders or other owners in the assets of the business.


MANAGEMENT UNIT

See under 'Classification by size' in paragraph 6 of the explanatory notes.


OPERATING BUSINESSES

A management unit which is still in existence at the end of the financial reporting period. See 'Management unit' above.


PROFIT MARGIN

The percentage of operating income available as operating profit, i.e.


RETURN ON ASSETS

Operating profit before tax as a percentage of the total book value of assets, i.e.


RETURN ON NET WORTH

Operating profit before tax as a percentage of shareholders' funds, i.e.


SALES OF GOODS

Includes sales of goods whether or not manufactured by the business and sales or transfers to related businesses.


TOTAL OPERATING EXPENSES

The total expenses of a business, excluding extraordinary items.


TOTAL OPERATING INCOME

The total income of a business, excluding extraordinary items.


OPERATING PROFIT BEFORE TAX (OPBT)

A measure of profit before extraordinary items are bought into account and prior to the deduction of income tax and appropriations to owners (e.g. dividends paid).