EY Romania, together with doingbusiness.ro, have put together an in-depth assessment algorithm, which balances the most relevant business performance indicators, factoring in the particular conditions of today’s economic context. The ranking methodology includes a scoring system by which each company is assessed, based on turnover, financial and non-financial aspects, all considered by separate weights which reflect our insights regarding the specifics of doing business in the local market.
The most important criteria taken into consideration by our methodology was the turnover reported by companies. This was further weighted alongside other financial and non-financial performance aspects. The indicators included in this methodology are computed based on public information disclosed either by authorized bodies and institutions or by the companies themselves.
The analysis of non-financial indicators was applied to aspects such as average number of employees, type of company (listed, unlisted, large companies, SMEs or microenterprises), corporate social responsibility and environmental initiatives developed in Romania as well as the contribution to developing a local brand.
The financial indicators were computed based on information extracted from annual financial statements as at 31 December 2012. A number of financial indicators were selected, such as Total assets turnover, Earnings before Interest, Taxes, Amortization and Depreciation (EBITDA) growth, Current Ratio, Return on Equity Ratio, Debt to Equity Ratio and Interest Coverage Ratio.
Each indicator has been assessed based on a scoring grid from 1 to 5 allotted for specific value intervals, 1 being the value assigned for the lowest performance and 5 being assigned for the highest performance.
We have developed a separate methodology the banking sector. Apart from Total Assets, which represent the major size measure, we have considered other indicators such as: Net Banking Income growth, Return on Equity, Cost/Income Ratio, Net Interest Income/Income Bearing Assets, Loans/Deposits Ratio. Furthermore, for insurance companies we have considered the Gross Written Premiums (“GWP”), while for leasing companies we have considered annual turnover.
With this revised approach, Major Companies looks at the performance of companies registered in Romania that have filed the financial statements for the year ended 31 December 2012 with the Trade Register. Companies that have not submitted their financial statements for 2012 were not included in this analysis.
EY Romania was pleased to bring its contribution to Major Companies drawing upon its significant experience in serving leading companies and investors across various industry sectors. Our 20 years of experience on the local market allowed us to thoroughly customize the research algorithm in order to reflect the particular aspects of doing business in Romania.
