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Brazilian Public Versus Private Companies: Current State of Affairs

Brazil has grown steadily for many years. It is the seventh-largest economy in the world and remains the prominent power in South America even though the country is experiencing recent challenges. This analysis will provide insight into how privately owned companies are performing compared to their public peers in Brazil. By looking at the Brazilian company financial data, we can observe where opportunities exist and better understand the dynamics between privately owned and publicly traded companies. From these companies, we analyze various key ratios including profitability, efficiency, solvency, and liquidity to see how sectors are positioned within Brazil. In addition, we look to some banking and energy ratios to better understand key metrics in these two industries as an example of the analysis this data set can support.

Key Findings:

  • Private companies use assets to drive sales more efficiently but are not as good at managing costs.
  • Publicly-traded industrials, consumer discretionary, and materials companies have median debt-to-capital ratios that are 10% higher than their privately-owned counterparts. 
  • Privately-owned banks are more conservative with a lower loan-to-deposit ratio and generate less revenue from other services aside from lending.
  • Public exploration and production companies have better cash flow to asset ratio while managing lower exploration expenses as a percentage of revenues.

Source: S&P Capital IQ financial data as of: February 17,2015

Source: S&P Capital IQ financial data as of: February 17,2015

Click here to read the full report.

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