Charts of the Week

French companies went into the pandemic in a strengthened financial position

04/27/2021
Change in equity and debt of non-financial corporations

Given the way outstanding amounts of equity and debt are valued1 in national financial accounts2 , debt ratios calculated using these figures can give a distorted picture of the financial structure of non-financial companies. In contrast, capital increases and self-financing give a reliable approximation of changes in company capital. Our calculations suggest that French companies went into the pandemic in a strengthened financial position. Thus, the unprecedented increase in financial debt in 2020 (EUR 206 billion, with nearly EUR 130 billion in the form of government-guaranteed loans) was preceded, between 2015 and 2018, by a marked rise in capital, as the result of a significant increase in equity issues. However, these aggregate trends hide different pictures when individual companies, differing company sizes and different sectors are considered.

THE EXPERT ECONOMISTS WHO PARTICIPATED IN THIS ARTICLE