In this report, commissioned in June 1989 by the Transport and Road Research Laboratory (TRRL) from Price Waterhouse, the factors which determine the financial viability of bus operators and influence commercial success are examined. The report is based on: an analysis of a sample of 150 bus company accounts for the years 1986/87 to 1988/89; detailed case studies of a cross section of 11 bus companies; and a cross section regression analysis of the factors influencing differences in profitability for over 100 companies in 1987. The analysis of accounts indicated: a dip in profitability and profit margins in 1987 with slight recovery towards 1988; constant current ratios indicating that liquidity is under control; high gearing ratios for many companies in 1986 (reflecting high levels of debt) which declined towards 1988. The analysis revealed wide variation in performance between companies in the sample. Bus companies had experienced great change since 1986 with competition and privatisation. As a consequence most companies had reviewed all aspects of their business.

Want to know more about this project?