Inventory turnover ratio of leading meat-processing enterprises in Russia

Information agency Credinform prepared a ranking of leading meat-processing enterprises in Russia, producing mainly finished goods.

The companies with the highest volume of revenue were selected for this ranking according to data from the Statistical Register for the latest available period (for the year 2013). These enterprises were ranked by decrease in inventory turnover ratio.

Inventory turnover (in times) - relation of sales revenue to average inventory value for a period. It shows the speed of realization of inventory.

Inventory turnover characterizes mobility of assets, which an enterprise puts into the stocking: the faster the money put into inventories return to a company as proceeds from sales of finished goods, the higher is the business activity of this organization, efficiency of resources use by the company taking into account the time factor.

There is no recommended value prescribed for this ratio, because the indicator can vary strongly depending on industry sector, where the concrete enterprise operates. However, the higher is its value, the better.

By the analysis of company’s activity it is expedient to take into account the industry-average indicator. 

Picture. Sale proceeds and inventory turnover of leading meat-processing enterprises in Russia (TOP-10)

The turnover of the largest Russian meat-processing enterprises (TOP-10) made 134 751 bln RUB, according to the latest published annual financial statement (for the year 2013).

The average value of inventory turnover of TOP-10 organizations is 29 times.

Ostankinsky myasopererabatyvayushchy kombinat OJSC - is the leading Russian manufacturer of products of meat-processing and semi-finished goods, which realizes the complete inventory turnover 23 times a year. In 2013 the sales volume of the plant exceeded 168 thousand tons, thereby consolidated its leading positions in the meat market.

The rate of inventory turnover being higher, than all enterprises average, was showed only by four companies from TOP-10 list – they are as follows:

• Ptitsekombinat LLC (78 times) - is one of the largest poultry plants in southern Russia;
• Starodvorskie kolbasy CJSC (38 times) – produces sausage products, ham;
• MPZ Agro-Belogore LLC (37 times) – vertically-integrated holding company, which specializes in manufacture of pig meat on a commercial scale and realization of fresh meat products in finished consumer package;
• Cherkizovsky myasopererabatyvayushchy zavod OJSC (36 times) – today it is one of the largest manufacturers of meat products in Russia. The plant is the main enterprise of meat-processing segment of «Cherkizovo» Group.

The rest participants of TOP-10 list showed the rate of inventory turnover being lower, than the branch average.
According to the independent estimation of the Information agency Credinform, all organizations of the TOP-10 list (except Khalyal Ash LLC - new entrant, producing meat and meat products, which meet Muslim standards for this product) got a high and the highest solvency index, what can signal to potential investors, that the largest market players can pay off their debts in time and fully in the moment of their incurrence.

See also: Product profitability of meat products manufacturers