Corporate bankruptcy

According to the Federal Tax Service, 9290 companies have failed in the last year (2012), due to bankruptcy, that is 17.5% less than in the previous year (2011), thereby proving Credinform experts' earlier predictions. It is worth mentioning that the bankruptcy rate has been going down since 2010. 

Most of them were LLCs and ALCs. A share of such companies in total number of failed companies has increased for 82% compared to 2011 with only 67%. The share of open and closed Joint Stock Companies has not significantly change with 15% in 2012 vs. 12% in 2011. And only 2.6% of non-commercial organizations have failed last year. 

In 2012 the two areas with the most significant number of bankruptcies were Volga Federal District and Central Federal District with 2,622 and 2,591 cases respectively.  The lowest rate of business failure was found in North Caucasian Federal District and Far Eastern Federal District with 613 and 267 cases respectively.

Among largest federal subjects of Russia by GDP with most bankruptcy cases for 2012 are Moscow (773 cases), Samara region (549 cases) and The Republic of Bashkortostan (489 cases). 

There is also decrease in total number of bankruptcies among sole proprietorship companies with 1,772 court cases, which is 7.9% less than in 2011. 

The most common cause for an entrepreneur to file for bankruptcy is an insufficient Field Tax Audit Report. The entrepreneur might be obligated to pay extra VAT if Tax Service officials discover undeclared contracts with fly-by-night companies made within last three years. In today's business practice in Russia arrears can exceed ten million rubles so it is reasonable to check your business partner's background before signing a contract. Make sure that the contractor has official registration and all required licenses and permissions to provide the kinds of services or products you intent to purchase. Also it is wise to ensure the company owns the equipment necessary to fulfill the contract.

Detailed information on Russian companies bankruptcy you can obtain from our specialists. 

Equity turnover of paper and cardboard producers in the Russian Federation

Credinform Information Agency offers you a ranking of Equity turnover of paper and cardboard producers. For the ranking, Russian pulp-and-paper mills with highest revenue have been selected and then ranked by number of equity turnover per annum.
Equity turnover reflects the equity turnover rate, which means – in particular, for joint stock companies – activity of funds put at stake by owners of enterprise. Low value of this indicator speaks for inactivity of a part of equity. Increase in turnover means that company’ equity is put into turnover.

Equity turnover and solvency index of paper and cardboard producers with highest turnover
NNameINNTurnover in 2011, ml rub.Equity turnoverIndex
1 Syas Pulp-and-Paper Mill OJSC 4718011856 3,356.13 12.22 242(high)
2 Vyborg Pulp OJSC 7825481883 2,715.46 11.52 228(high)
3 Kamensk Paper-and-Cardboard Plant OJSC 6929000141 1,994.76 3.66 217(high)
4 Kondopoga OJSC 1003000650 14,318.65 2.94 273(high)
5 Volga OJSC 5244009279 9,885.57 2.41 278(high)
6 Proletariy CJSC 3229000246 2,170.31 2.11 170(highest)
7 Shattdekor LLC 5049011877 2,791.49 2.04 203(high)
8 Sukhonsk Pulp-and-Paper Mill LLC 3527009692 2,173.82 1.61 240(high)
9 St. Petersburg Cardboard Printing and Publishing Factory OJSC 4719003640 5,381.72 1.24 193(highest)
10 Perm Cardboard LLC 5904108952 3,182.25 -20.51 316 (satisfactory)

Capital turnover directly influences the company’s solvency. Moreover, increase in capital turnover rate against equal remaining conditions reflects growth of production and technical potential of organization.

First two enterprises – Syas Pulp-and-Paper Mill OJSC and Vyborg Pulp OJSC – enjoy rather high equity turnover indicators, as well as high GLOBAS-i solvency index, which speaks for the growth of their business activity.

Equity turnover indicators of Kamensk Paper-and-Cardboard Plant OJSC, Kondopoga OJSC, Volga OJSC, Proletariy CJSC, Shattdekor LLC, Sukhonsk Pulp-and-Paper Mill LLC, and St. Petersburg Cardboard Printing and Publishing Factory OJSC are remarkable lower, however, high and highest solvency index assigned by the Agency to the company proves rather harmonious development of financial ratios of these enterprises.

The only company from the list – Perm Cardboard LLC – has negative equity turnover, which is the evidence of critical financial situation, when the solvency rate is low. It is assumed that monetary funds, short-term financial investments and debt receivables do not cover even its payables and outstanding borrowed funds. Satisfactory solvency index assigned to this company – also due to losses in balance sheet figures structure – confirms average risk of monetary default.

Therefore, if equity turnover rate is too high (which means substantial prevailing of sales rate over invested funds), this results in raise of credit resources; the risk of creditors also rises, and the enterprise may suffer serious hardships due to reduction of profits or general trend to reduction of prices. Low rate means inactivity of a part of equity. In this case, equity turnover index indicates the necessity to invest equity to another source of profit, which better suits the current conditions.