PROFITABILITY AND EFFICIENCY ANALYSIS IN WATER AND SEWERAGE SECTOR IN ROMANIA

• Published in: Analele Universităţii Constantin Brâncuşi din Târgu Jiu : Seria Economie 2017-08, Vol.1 (4), p.96-102
• Main Authors: BAKÓ KINGA-ERZSÉBET, FÜLÖP ÁRPÁD-ZOLTÁN
• Format: Article
• Language: English
• Subjects: non-revenue water; public utilities; water policy
• ISSN: 1844-7007; 1844-7007

Profitability is a central element in economic and financial analysis of a company. An enterprise which is not profitable in the long term, slowly taking steps towards bankruptcy. Theoretically profitability means the same concept for any company, but practically there are specific elements in each sector of national economy, which makes the formulas applied in a general way does not lead to correct results, at a correct analysis. The profitability analysis has a major importance in the sector of water and sewage, because most of the enterprises in this sector are public enterprises, and as has been demonstrated in countless cases, public entities are not too well managed. It is important to keep a mirror in front of them, through the provision of specific tools that makes possible a correct analysis of the efficiency, because the resources that it manages are vital to society and their bankruptcy can affect local communities. In this sector the analysis of the profitability efficiency presents peculiarities, so the standard formulas of analysis do not give a correct image on the profitability and efficiency of these enterprises. In this article we analyze the indicators of efficiency and profitability in the sector of water and sanitation in comparison with international data.