## Figure 1.10. Corporate Profitability Indicators in Advanced Economies

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**Canonical URL:** [Figure 1.10. Corporate Profitability Indicators in Advanced Economies](https://www.imf.org/-/media/files/publications/gfsr/2019/april/english/ch1data/charts/figure1-10.pdf)

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### 1. Global Profitability Trends (EBITDA in percent of assets)
- Profitability has been higher in the United States than in other advanced economies.
- Time series axis labels and markers shown: 1996, 97, 98, 99, 2000, 01, 02, 03, 04, 05, 06, 07, 08, 09, 10, 11, 12, 13, 14, 15, 16, 17, 18:H1.
- Vertical axis example values shown: 0.6, 0.7, 0.8, 0.9, 1.0, 1.1, 1.2, 1.3.

### 2. US S&P 500 Firms: Profitability Drivers (Percent of assets)
- US outperformance driven by a falling tax rate and by strong revenue growth—albeit with a notable decline in the fourth quarter of 2018.
- Panel shows components such as Net income (earnings), Pretax income, Effective tax rate (right scale), Capex+R&D, Payouts, M&A, Change in net debt.
- Plot axis examples include values: –0.2, 0.0, 0.2, 0.4, 0.6, 0.8, 1.0, 1.2, 1.4, 1.6, 1.8, 2.0.

### 3. US S&P 500 Firms: Uses of Cash Flow (Percent of assets; four-quarter moving average)
- Strong profits in the United States were used for payouts and other financial risk-taking.
- In many sectors, payouts were also financed with borrowing, despite already elevated debt ratios.
- Components in panel include Capex+R&D, Payouts, M&A, Change in net debt.

### 4. US S&P 500 Firms: Payouts, Net Borrowing, and Debt Ratios (2018; percent of assets)
- Panel compares Payouts and Net debt ratio (right scale).
- Net debt ratio axis values indicated on figure example: 0, 10, 20, 30, 40.

### 5. US S&P 500 Sectors: Expected EPS Growth, 2019 (Year-over-year percent change)
- US corporate profit forecasts have been revised down, particularly at firms with significant international exposures.
- Sector labels included: S&P 500, Utilities, Cons. disc., Cons. stap., Industrials, Comm., Energy, IT, Financials, Health.
- Horizontal axis example ticks: 0, 2, 4, 6, 8, 10, 12, 14.

### 6. Global Equity Markets: Expected EPS Growth, 2019 (Year-over-year percent change)
- Expected earnings growth has been revised down in other regions because of weaker economic data.
- Market labels included: United States, Euro area, Japan, United Kingdom and indices listed: US S&P 500, Eurostoxx, German DAX, UK FTSE 250, Japanese Topix.
- Time-series markers shown for monthly revisions: Oct. 2018, Nov. 18, Dec. 18, Jan. 19, Feb. 19, Mar. 19 (repeated for comparative series).
- Vertical axis example tick labels include: –4, –3, –2, –1, 0, 1, 2, 3, 4.

### Notes on sample and definitions
- Sample from S&P Capital IQ includes about 20,000 firms in the euro area, Japan, the United Kingdom, and the United States.
- In the euro area, they represent 23 percent of total debt in the total corporate sector; in Japan, 40 percent of total debt; in the United Kingdom, 36 percent of total debt; and in the United States, 76 percent of debt, measured as loans and debt securities.
- Abbreviations and definitions preserved as shown: Capex = capital expenditure; Comm. = communications; Cons. disc. = consumer discretionary; Cons. stap. = consumer staples; EBITDA = earnings before interest and taxes, depreciation; and amortization; EPS = earnings per share; IT = information technology; M&A = mergers and acquisitions; R&D = expenses for research and development; SGA = sales, general, and administrative.

*Sources: Bloomberg Finance L.P.; S&P Capital IQ; Thomson Reuters Datastream; Thomson Reuters I/B/E/S; and IMF staff calculations.*

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_Source: https://www.imf.org/-/media/files/publications/gfsr/2019/april/english/ch1data/charts/figure1-10.pdf_