Which Australian companies are worth more than $1bn?
The value of Australia’s private companies and how much they should be valued has changed dramatically over the last decade, according to a new study.
The report by Deloitte looks at how companies have changed in Australia over the past decade.
The Australian Institute of Management has also found that Australia’s business sector has changed, with companies increasingly being valued on their ability to generate revenue.
The new report, titled ‘The Australian Business Value’, also finds that there is a significant amount of uncertainty about how Australia’s economy will perform over the next decade.
“We have seen the cost of doing business, and that is the cost to businesses of doing what they are doing,” Professor David Wessel from the University of Melbourne said.
“So, when we look at companies and the cost they pay, we are not really certain what will happen in the future.”
The value of Australian companies is very much driven by their ability or lack of it to generate profit, so we have a significant degree of uncertainty around that.”‘
Inflationary’ growthThe report also looks at the Australian economy as a whole.
The report found that in the six years ending in December 2018, Australian GDP grew by 1.5 per cent, with the overall growth rate in the economy decreasing to 1.3 per cent.
However, it found that over the same period, the value of the Australian business sector dropped by 2.1 per cent to $1.5 trillion.
Professor Wessel said it was “insane” that there was such a large difference between what the average Australian business person was paying in salary and what they were earning.”
It’s a very different kind of business to a financial company, so to have a 1.7 per cent increase in the cost base and a 2.5 percentage increase in profit is quite shocking,” he said.
He said it also showed the cost-cutting pressures facing Australian companies were “inflationary”.”
That’s what the Australian government is talking about when they say the cost pressures are growing, so that is really telling you that inflationary pressures are on,” he explained.”
In the long term, there’s no need for them to do anything, and if they do, it’s just to reduce their cost base.”‘
No clear evidence’ about how much the economy is worthA spokeswoman for the Australian Business School, Professor David Wilcox, said the report showed that while the economy was performing well, it was not clear that the cost structure of Australian businesses was sustainable.”
There is no clear evidence that these companies are doing as well as they could be doing, particularly as the cost environment has changed and companies are shifting to the services sector,” she said.”[The] evidence is that the businesses are not able to generate the same revenues as they did before, so they are struggling to maintain their competitiveness.
“What they’re doing now is very different from what they would have done five years ago.”
Topics:business-economics-and-finance,industry,business-insider,industries,government-and ofeims,economy,australiaFirst posted October 26, 2019 06:38:36Contact Emily TaitMore stories from Western Australia