Inventory turnover of paints and varnishes manufacturers

Information Agency Credinform has prepared the ranking of inventory turnover of paints and varnishes manufacturers. The largest enterprises engaged in this activity in terms of turnover were selected according to the data from the Statistical Register for the latest available period (for the year 2013). Then, the first ten companies by turnover were ranged by decrease in inventory turnover ratio.

Inventory turnover is a ratio of revenue to average value of stocks for a period. Thus, the ratio shows how many times the company used the average stock remainder during the analyzed period. The ratio characterizes the quality of stocks and its management effectiveness, allowing to identify the remains of unused, outdated or unsuitable stocks.

There are no general standards for this ratio; it should be analyzed in comparison with the industry average values. Thus the decrease in inventory turnover ratio can reflect the accumulation of surplus stocks and inefficient warehouse control. However, high turnover is not always a positive indicator, as it can testify about the exhaustion of stocks, which may lead to interruptions in the production process.

Inventory turnover and solvency index of the largest manufacturers of paints and varnishes in Russia, Top-10
Name, INNRegionTurnover 2013, mln.RUBInventory turnover, timesSolvency index Globas-i ®
1 CJSC Akzo Nobel Dekor
INN 5001027607
Moscow region 3097 15,38 229 (high)
INN 5041024497
Moscow region 1459 13,58 286(high)
INN 7816424590
Saint-Petersburg 9489 11,22 213 (high)
4 BASF Wostok
INN 7710317252
Moscow region 3144 7,94 163 (the highest)
INN 7726296375
Moscow region 4987 6,14 224 (high)
INN 6167008343
Rostov region 2382 6,04 269 (high)
INN 7602003918
Yaroslavl region 1930 5,16 182 (high)
INN 7605015012
Yaroslavl region 2603 4,48 226 (high)
INN 7702177932
Moscow region 2687 3,56 220 (high)
10 CJSC АВС Farben
INN 3618003426
Voronezh region 1504 3,39 237 (high)

The first place of the ranking takes CJSC Akzo Nobel Dekor with ratio value 15,38 times, which speaks that within a year the company used the average remainder more than 15 times and it is an excellent result. The company has the high solvency index Globas-i®, which shows company’s stable financial condition. 

paints and varnishes manufacturers

Inventory turnover of paints and varnishes manufacturers in Russia, Top-10

The industry leader by turnover LLC TIKKURILA takes the third place of the ranking with ratio value 11,22 times. It should be noted that according to 2013 results, net profit of the company decreased by 30% and amounted to 414 mln. RUB. However according to total financial and non-financial indicators, the high solvency index Globas-i® was assigned to the company.

In general, all companies of TOP-10 showed good level of inventory turnover ratio, which speaks about competent policy of companies’ management in relation to warehouse control.

In conclusion it should be noted that inventory turnover level is also depends on company’s marketing policy. Thus, for enterprises with high profitability of sales is typical lower turnover than for enterprises with low rate of return on sales.

Russia’s isolation postponed

The global business is still ready to increase the investment in Russia. According to consulting company AT Kearney, more than a half of 500 affluent worldwide business representatives are planning to increase the investment in Russia «significantly or moderately» under the condition of recession of geopolitical intensity around Ukrainian events.

Despite the current situation, 50% of respondents still think, that Russia is the reasonable direction for investment. Some banks, including Coutts and DBS in Singapore, are noting that the shares of Russian companies are record-breaking cheap, and the ratio of price/profit is lower than dividend income indicators; this is a signal for purchasing of securities

According to the Foreign Direct Investment Confidence index (the trust index in the context of direct foreign investments), which is calculated by AT Kearney, Russia is out of TOP-25 directions for the investment for the second year in a row.

According to FDI Markets, in 2014 178 new projects, which are financed by foreign investment, were started in Russia for a total amount of 13 bln. USD. In 2011 the number of such projects amounted to 396, total value - about 23 bln. USD.

Further fall in prices of Russian assets, as expected, will increase the interest of Asian investors.

Moreover, the Russian business is also perked up, and reached much higher rates, than many global companies. And it is all because of sanctions and lack of foreign products, the Russians began to make a choice in favor of domestic products and services. Now, as a result, the Russian companies, which are trading at Moscow Exchange, are more profitable than all other companies from the index of developing markets according to MSCI by profit before tax values. Many Russian corporations surpassed its direct global competitors by growth level.