Non-Financial corporations debt to surplus ratio

The non-financial corporations' debt to surplus ratio provides an indication of the capacity of non-financial corporations to meet the cost of interest and debt repayments with the operational profits generated. Debt is calculated as the sum the following liability categories: currency and deposits, debt securities, loans, insurance, pensions and standardised guarantee schemes, and other accounts payable. Gross operating surplus (GOS) is the value added generated by production activities after deduction of compensation of employees. The sector non-financial corporations (S11) includes all private and public enterprises that produce goods and non-financial services to the markets. If the ratio debt to GOS of a non-financial corporation is 2.5, this means that the debt outstanding is 2.5 times larger than the annual flow of gross operating surplus.

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Keywords: value added, non-financial corporations