Finances, Efficiency, and Profits
This chapter analyzes three aspects of behavior: financial soundness and stability, internal efficiency, and profitability. The accompanying graphs present ratios for company groups: flagship firms; utilities; state traders; transporters; major banks; financial institutions; and other nonfinancial firms. The equity problems that resulted in poor current and quick ratios led to high funding requirements and financial overextension. Widespread portfolio or cross-sectoral similarities in efficiency ratios indicate that government authorities strongly influenced the public enterprise operating environment. Efficiency comparisons between public and private enterprises almost invariably place the former in second place. Analyzing the ratio of sales and administrative expenses to sales provides important information about resource use. The more a ratio depended on factors under central government influence, the more they tended to be inefficient. Greater government guidance did not provide an environment conducive to efficiency; on the contrary, greater autonomy did.