Value added productivity analysis: applied to Turkish Fertilizer Corporation, 1988-1991

Abstract

In this study a value added productivity analysis is conducted at a publicly owned enterprise in Turkey. The chosen method is known as Wainai method. By adapting this method, we first find out the value added for the company. Obtained value added is applied to calculate company's performance and productivity ratios. During the period 1988-1991, the company's profitability and productivity have drastically declined. The main reason is the substantial decrease in the labor cost competitiveness ratio because of both increase in the labor cost and decrease in the value added. The company suffers from high amount of interest payments to commercial banks. It has made very big amount of net losses in 1990 and 1991 chiefly due to these interest expenses.