The paper analyses the main differences in the financial structure of Italian and European non financial corporations in the period 2004-2007, that is, during the years before the financial crisis. The research is based on individual balance sheets held in the Amadeus (Analyse Major Databases from European Sources) database.
Italian non financial corporations present many factors of weakness compared with their European counterparts. Firstly they are characterised by a lower operating income, even if in the period under analysis they had a slightly higher increase in turnover.
Secondly a high level of indebtedness, with respect both to turnover and to risk capital, gives rise to a bigger impact of interest payments. Moreover the weight of short-term debt for Italian firms is higher and the availability of liquid assets is lower. Finally the percentage of commercial debt on assets is quite high.
Taking all this into account, financial fragility is confirmed by the higher share of Italian firms which are vulnerable compared with the European average.
