Flow of funds: Non financial Business Q2 2004

This sector includes non farm non financial corporate business, farm business, and non corporate non financial business.

The primary source of funding for this sector during the second quarter of 2004 was current profits, running at an annual rate of $1,196.8 billion. The next largest source of funding was increased debt in the form of mortgages ($278.3 billion, net), trade payables ($229.5 billion, net) and miscellaneous liabilities ($145.3 billion, net).

Funds were used mainly to acquire fixed assets ($984.6 billion), miscellaneous assets ($361.4 billion), and trade receivables ($243.2 billion).

Income, before taxes, on an annual basis, was up 18% over the level of 2000, the last year of the Great Bubble. Profits (shown as ‘gross savings and net capital transfers’) were up 32% over the same period. Investment in fixed assets was about 75% of income before taxes, compared to 89% in 2000, the last year of the Great Bubble.

Buybacks of corporate equities and withdrawals of proprietor’s net investment was at higher levels than at the peak of the Great Bubble.

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