Financial directions - UK companies top added value report.

(From Financial Director)

The 2004 Value Added Scorecard, published by the Department of Trade and Industry, looked at the wealth created by the top 600 European companies (including 165 from the UK) and, separately, the top 800 UK companies.

Their performances were judged by calculating their 'value added', which is traditionally defined as turnover minus the cost of bought-in goods and services. The idea is to give a measure of the value added - and shared - by employees and providers of capital. But because the cost of bought-in goods and services is rarely given in annual reports, the researchers used a proxy definition by which value added is defined as operating profit plus employee costs, depreciation and amortisation.

More UK firms are represented in the European 600 than any other country (165), with a combined value added of GBP315bn. Germany was second with GBP295bn and France third with GBP246bn.

The overall value added by the European 600 was GBP1,326bn, an increase of 1% over the previous year. However, the UK companies in the European 600 accounted for GBP315bn of value added, a 5% increase on the last survey, while the 800 UK companies surveyed increased their value added by 4%.

"These results show the UK's strong position in Europe, and are very encouraging," said secretary of state for trade and industry Patricia Hewitt. "Efficient wealth creation and re-investment by business is vital to the continued growth of the UK economy."

Shell was the UK's ...