Highest in 6 Years

20,888 South Korean companies subject to external audit recorded an operating profit-to-sales ratio of 6.1% last year.
20,888 South Korean companies subject to external audit recorded an operating profit-to-sales ratio of 6.1% last year.

 

The Bank of Korea announced on May 30 that 20,888 South Korean companies subject to external audit recorded an operating profit-to-sales ratio of 6.1% last year.

The ratio increased 0.9 percentage points from a year ago to reach the highest level since 2010, when it had been 6.7%.

Last year, the South Korean companies’ sales showed a year-on-year growth of 1.1%, the first positive growth in three years. Their sales had declined by 0.3% and 2.4% in 2014 and 2015, respectively.

Although the companies’ profitability improved, 26.5% of them showed an interest coverage ratio of less than 100% last year. This means about one-fourth of them had a hard time repaying their interest, not to mention their principal, by doing business activities.

 

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