Posted on 08/05/2012 4:50:30 PM PDT by DeaconBenjamin
Thousands of Greek businesses are facing the specter of bankruptcy, unable to service bank loans and liabilities to suppliers with increasingly meager turnover and profits.
According to Hellastat, which processed the balance sheets of 52,000 enterprises between 2002 and 2011, about 50 percent of operating profits today go to pay banks and suppliers, compared to about 30 percent before 2008.
In a sample of 15,000 firms of all sizes and activities, aggregate sales fell 4.66 billion euros in 2011. Within four years, businesses lost 25 percent of turnover and 50 percent of profits.
Exempting very large businesses and organizations, the figures show that total outstanding loan liabilities fell 18 percent to 35.8 billion euros in 2011. The number of companies in debt in 2011 was 36.6 percent, 15 percent lower than in 2010.
“It is important to stress that among small and mid-sized enterprises, the rate of those with access to bank funding does not exceed 20 percent,” said Hellastat CEO Panos Michalopoulos.
To put this in prospective, and I read the Greek story back in March...they have a problem in acquiring drugs.
They had a guy who needed insulin. He had the national healthcare policy and normally...he just paid a few bucks each month, and the local pharmacy acquired his insulin for him. The druggist called him up...the European companies that made insulin (they were no Greek companies doing it)...wanted cash before delivery now. They refused to ship unless they had the money in their hand (they were extremely unhappy waiting six to nine months to be paid).
So no insulin, unless he came up with cash for the druggist to buy it. So he went down to the bank...got the cash...paid for his insulin, and it was delivered four days later. As the druggist pointed it out...it had to be done each month this way.
The problem is...this guy has to use his own cash to buy his insulin....rather than use the national health care policy for his drugs. If he wanted a transmission job? Well...same deal...his mechanic would now likely require a cash payment before any work was done. Plumbing gone bad in the house...the plumber would ask for cash up front.
You layer this cash up front situation across every part of your life, and you pretty much burn up any cash reserve that you might have. If you were living on the edge of life...you won’t survive in the long-run.
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