Comparative analysis in the field of Hungarian manufacturing · Coke production, petroleum processing (6.018.000) Importance of the automotive industry in Hungary . 18% 8% 9% 21%

Comparative analysis in the field of

Hungarian manufacturing

Bereczk Ádám

Tignes

06.02.2013.

“The described work was carried out as part of the TÁMOP-4.2.2/B-10/1-2010-0008 project in the framework of the New Hungarian Development Plan. The realization of this project is supported by the European Union, co-financed by

the European Social Fund.”

Aggregated value Automotive

industry

Manufacturing

total Ratio

„Rank”

(from 11)

Group of activity having

the highest value / rate

Number of

companies (ps) 651 35.030 0,019 10th

Wood, paper, printing

activity (8.089)

Total assets (Bln

HUF) 2.433 17.404 0,140 3rd

Coke production, petroleum

processing (2.637)

Tangible assets (Bln

HUF) 826 5.528 0,149 1st -

Intangible assets

(Bln HUF) 111 576 0,193 1st -

Export

income/income 0,87 0,58 - 2nd

Production of electrical

machinery, tools (0,88)

Sum of net profit 187 -9 - 1st -

Profit 207 618 - 1st -

Loss -20 -627 - - -

Net profit/Total

assets 0,077 -0,0005 - 1st -

Gross added value

(Bln HUF)

623

4.606

0,135 1st -

Average number of

employees (number)

55.000

639.000

0,086

5th

Production of metal basic

materials, metal processing

(103)

Average staff costs

(staff costs/number

of employees, HUF)

2.734.000

2.087.000

1,31

3rd

Coke production, petroleum

processing

(6.018.000)

Importance of the automotive industry in Hungary

18%

8%

9%

21%

5%

14% Élelmiszer, ital, dohány gyártása

Textília, bőrtermék, lábbeli gyártása

Fa, papír, nyomdai tevékenység

Kokszgyártás, kőolajfeldolgozás

Vegyi anyag termék gyártása

Gumi-, műanyagtermék gyártása

Nem fém ásványi termék gyártása

Fémalapanyag gyártás, fémfeldolgozás

Villamos gép, műszer gyártása

Gép, berendezés gyártása

Járműgyártás

Egyéb feldolgozóipari tevékenység

2002

2007

Production of food, drinks, tobacco products

12%

4%

10% 25%

10%

17%

Proportion of the revenue in the Hungarian

manufacturing

Production of textiles, leather, footwear

Wood, paper, printing activity

Coke production, petroleum processing

Production of chemical products

Production of rubber, plastic products

Production of non-metal mineral products

Production of metal basic materials, metal processing

Production of electric machinery, tools

Production of machines, equipment

Vehicle production

Other manufacturing

assemble: Audi, Suzuki Mercedes, GM

comes to mind but I did not deal with

Significance of the suppliers

• Sampling

Automotive industry: OEM, Tier -1, -2, -3

- Tier-2, Tier-3 group

SMEs size limit

Hence: „SMEs”

- 10 element sample from both groups

- Examined: asset management, capital intensity,

net circulating capital

Categories and my sample

Metal industry SMEs

Asset management I.

• The main issue:

Whether SMEs have longer financing time than TIER-1s?

• Categories and method of calculation

Financing time =

Rotation time – Accounts payable payment period

average accounts payable / recovery per day

Rotation time =

Average inventory period + Accounts receivable collection period

(average inventories / revenue per day) (average receivable / revenue per day)

unit: day(s)

Financing time in the studied groups

Source: calculations of the author

Asset management II.

SMEs

Tier-1

Asset management III.

Financing time - SMEs versus metal industry

Source: calculations of the author

Asset management IV.

• The „rotation speed indicators” can contain hidden problems,

which are:

- the claims were sold (to a financial affiliated firm or to third

party);

- the inventory level is too low;

- the substitution cost significantly exceeds the value shown by

the bookkeeping;

- the liquidity is dangerously low;

- the short term obligations are overvalued.[1].

[1] Luc Soenen alapján Tarnóczi, DE, egyetemi jegyzet.

Capital intensity in the individual groups, sub-branches and in the manufacturing (million HUF/employee)

Source: calculations of the author

Capital intensity

Capital intensity (here) = Money value of capital /

average number of employees

Net circulating capital

• The part of the current assets that are financed from long-term liabilities or

from owner’s equity.

• If it is negative the corporation finance a certain stock of invested assets

from short-term liabilities !

• Results:

- 2/3 of TIER-1: positive

- 2/3 of SMEs : negative

Net circulating capital in proportion to current assets

Source: calculations of the author

Thank you for your attention!