NATIONAL ACCOUNTS
MARIA GRZELAK
ANALITYKA GOSPODARCZA
Sales of cars
1 353 500
Purchases Inventories of finished products Inventories of raw materials
Raw materials
Temporary employment
services
Machine tools Start of the period End of the period Beginning of the period End of the period
540 000 350 500 264 000 245 000 346 700 73 200 43 000
ASSUMPTION
PRICES ARE UNCHANGED DURING THE PERIOD
LATER ON I WILL EXPLAIN WHY THIS LAST CONDITION IS SO
IMPORTANT
WHAT DO WE NEED TO DO?
• WE NEED TO CALCULATE:
THE OUTPUT
THE INTERMEDIATE CONSUMPTION
THE VALUE ADDED AT CURRENT PRICES
OUTPUT FORMULA
OUTPUT = SALES + CHANGE IN INVENTORIES OF
FINISHED PRODUCTS
THE CHANGE IN INVENTORIES OF FINISHED PRODUCTS
- =
CALCULATION OF OUTPUT:
+ =
•INTERMEDIATE CONSUMPTION = PURCHASES
OF MATERIALS + TEMPORARY EMPLOYMENT –
CHANGE IN MATERIALS INVENTORIES
CALCULATION OF CHANGE IN MATERIALS INVENTORIES:
- =
Change in materials inventories
This shows that this change can be negative.
CALCULATION OF INTERMEDIATE CONSUMPTION
+ - =
As it can be seen, this solution does not include the amount of machine-tool purchases because the purchases are not
intermediate consumption but gross fixed capital formation.
VALUE ADDED = PRODUCTION – INTERMEDIATE CONSUMPTION
VALUE ADDED
- =
The absence of a change in prices is important because it makes it possible to
calculate the change in inventories by simply subtracting the value of the stocks at the end of the period from the stock values at the beginning of the period. If the prices of either the finished products or of the goods held for intermediate
consumption are not constant (which is the usual situation), this simple calculation will
include holding gains and losses, and these have to be deducted in the calculation
of gross output and intermediate consumption.
Holding gains and losses are generally defined as increases or decreases in the replacement costs of the assets/liabilities held during a given period.
For example, if a company holds bottles of wine in its
inventory and that specific wine becomes more expensive on the market, the replacement cost of the wine in the inventory increases as it has become more expensive for the company to replace its current stock of wine. Thus, by merely holding the wine in the inventory, the assets of the company have risen in value.
NON- MARKET SECTOR
WHAT DO WE NEED TO DO?
• CALCULATE:
OUTPUT
INTERMEDIATE CONSUMPTION
VALE ADDED
VERIFY THAT :,”THE MEASURE OF OUTPUT CORRESPONDS TO THE ASSUMPTION THAT THIS ADMINISTRATIVE BODY IS NON-PROFIT’’
NON-MARKET OUTPUT
• IT IS CALCULATED ON THE BASIS OF THE SUM OF COSTS.
NON-MARKET OUTPUT FORMULA
• NON MARKET OUTPUT = CIVIL SERVANTS’ GROSS WAGES AND SALARIES + THE EMPLOYERS’ SOCIAL CONTRIBUTIONS + THE INTERMEDIATE
CONSUMPTIONS +DEPRACIATION
NON-MARKET OUTPUT
+ + + =
Depreciation – consumption of fixed capital corresponding to the utilisation costs of plants and buildings, machinery,
software, Research and Development (R&D).
• TAX REVENUE HAS NOTHING TO DO WITH THE MEASUREMENT OF OUTPUT.
VALUE ADED
- =
This value added breaks down into:
The cost of labour
The cost of capital and profits
THE COST OF LABOUR
+ =
• COST OF CAPITAL = DEPRECIATION =
- + =
When these two items are deducted from value added, one is left with zero, meaning that profits are nil. The assumption that general goverment entities are non-profits is therefore verified.
