Each year, the National Bank examines the situation regarding the annual accounts of Belgian non-financial corporations. By that time, the Central Balance Sheet Office has already collected a representative number of annual accounts for the preceding year. The article is in three parts. The first part describes the methodology used and the sample. The second part studies the main developments in the profit and loss account. Finally, the third part contains a financial analysis of Belgian companies ; this analysis is supplemented by the interpretation of the results of the failure prediction model developed by the Bank. In 2005, the total value added created by Belgian non financial corporations increased by 4 p.c., constituting a slowdown in comparison with 2004. At the same time, the operating costs (mainly personnel costs and depreciation) grew by 2.8 p.c. So, for the third year in a row, value added growth greatly exceeded the rise in operating costs. As a result, the net operating profit increased by 8.4 p.c., after having already produced an exceptional increase in 2003 and 2004. In three years, the operating profit gained 12 billion euro or 70 p.c. After taking into account the other elements of the results, and particularly the financial and exceptional results, non financial corporations made a net profit after tax of 41 billion euro, representing a strong increase in comparison with 2004. Return on equity increased significantly in 2005 in the largest companies. The slight decline in the leverage effect had a positive influence on financial independence and, due to historically low interest rates, the associated charges continued to fall. The net working capital of large companies and SMEs went up, while the working capital needs of the former tend to exceed their net working capital. Investments caught up in 2005 in the major companies, mainly in the non manufacturing sector, but in terms of the median value there was a slight decline, linked to lower use of production capacity. Rising amounts invested in R&D were concentrated on a smaller number of companies. As far as financial risks are concerned, they levelled off in 2005, after several years of decline.
