TOP-1000 companies of the Central Black Earth Region of Russia

In order to reduce interregional differences in the level and quality of life of people, the Ministry of Economic Development of the RF approved the strategy of spatial development of Russia in February 2019. 12 macro-regions were formed in the strategy. One of them is the Central Black Earth Region, which includes: Belgorod, Voronezh, Kursk, Lipetsk and Tambov regions.

Information agency Credinform represents an overview of activity trends of the largest enterprises of the real sector of the economy in the Central Black Earth economic region of Russia.

Enterprises with the largest volume of annual revenue (TOP-1000) were selected for the analysis, according to the data from the Statistical Register for the latest available periods (for 2013 - 2018). The analysis was made on the basis of the data of the Information and Analytical system Globas.

Net assets value is an indicator, reflecting the real value of company’s property, is calculated annually as the difference between assets on the enterprise balance and its debt obligations. The indicator of net assets is considered negative (insufficiency of property), if company’s debt exceeds the value of its property.

The largest enterprise of the Central Black Earth economic region of Russia in terms of net assets is NOVOLIPETSK STEEL MILL PJSC, INN 4823006703, Lipetsk region. Its net assets amounted to 336,1 billion rubles in 2018.

The smallest amount of net assets in the TOP-1000 list was hold by METALL-GROUP LLC, is in the process of being wound up since 22.03.2018, INN 7811122323, Belgorod region. The insufficiency of property of this company in 2018 was expressed as a negative value of -10,6 billion rubles.

The average values of net assets of TOP-1000 enterprises tend to increase over the five-year period (Picture 1).

Picture 1. Change in the average indicators of the net asset value of TOP-1000 companies in 2014 – 2018

The shares of TOP-1000 enterprises with insufficiency of assets have a tendency to decrease in the last five years (Picture 2).

Picture 2. Shares of enterprises with negative values of net assets in TOP-1000

Sales revenue
The revenue volume of 10 leading companies of the region made 31,3% of the total revenue of TOP-1000 in 2018 (Picture 3). It points to a relatively high level of capital concentration.

Picture 3. . Shares of participation of TOP-10 companies in the total revenue of TOP-1000 enterprises for 2018

In general, there is a tendency to increase in the revenue volumes (Picture 4).

Picture 4. Change in the average revenue of TOP-1000 companies in 2014 – 2018

Profit and losses
The largest company in terms of net profit value is also NOVOLIPETSK STEEL MILL PJSC, INN 4823006703, Lipetsk region. Company's profit amounted to 117,9 billion rubles in 2018.

Over a five-year period, TOP-1000 enterprises showed a tendency to growth of profits (Picture 5).

Picture 5. Change in the average indicators of profit of TOP-1000 companies in 2014 – 2018

Average values of net profit’s indicators of TOP-1000 enterprises have a tendency increase over a five-year period, at the same time the average value of net loss decreases. (Picture 6).

Picture 6. Change in the average indicators of net profit and net loss of TOP-1000 companies in 2014 – 2018

Key financial ratios
Over the five-year period, the average indicators of the total liquidity of TOP-1000 enterprises were above the range of recommended values - from 1,0 up to 2,0, with a tendency to increase (Picture 7).

The total liquidity ratio (the relation of the amount of current assets to short-term liabilities) shows the sufficiency of company’s funds for repayment of its short-term liabilities.

Picture 7. Change in the average values of the total liquidity ratio of TOP-1000 companies in 2014 – 2018

Over the course of three years out of five years, there is a high level of average indicators of return on investment ratio, with a tendency to decrease (Picture 8).

The ratio is calculated as the relation of net profit to the sum of own capital and long-term liabilities and demonstrates the return on the equity involved in the commercial activity and the long-term borrowed funds of an organization.

Picture 8. Change in the average values of the return on investment ratio of TOP-1000 companies in 2014 – 2018

Asset turnover ratio is calculated as the relation of sales proceeds to the average value of total assets for a period and characterizes the efficiency of use of all available resources, regardless of the sources of their attraction. The ratio shows how many times a year a complete cycle of production and circulation is made, yielding profit.

Over a five-year period, this indicator of business activity showed a tendency to decrease (Picture 9).

Picture 9. Change in the average values of the asset turnover ratio of TOP-1000 companies in 2014 – 2018

Small business
38% enterprises from TOP-1000 are registered in the Register of small and medium-sized enterprises of the Federal Tax Service of the RF. At the same time, their share in the total revenue of TOP-1000 amounts only to 9,1%, that is significantly lower than the national average (Picture 10).

Picture 10. Shares of proceeds of small and medium-sized enterprises in TOP-1000 companies

Main regions of activity
TOP-1000 companies are registered in all 5 regions and distributed unequal across the territory. Almost 58% of the largest enterprises in terms of revenue are concentrated in Belgorod and Lipetsk regions (Picture 11).

Picture 11. Distribution of the revenue of TOP-1000 companies by regions of the Central Black Earth economic region of Russia

Financial position score
An assessment of the financial position of TOP-1000 companies shows that the financial position of the most of them is above average (Picture 12).

Picture 12. Distribution of TOP-1000 companies by financial position score

Solvency index Globas
The vast majority of TOP-1000 enterprises got Superior/High or Strong/Medium Solvency index Globas, that points to their ability to pay off their debts in time and fully (Picture 13).

Picture 13. Distribution of TOP-50 companies by solvency index Globas

Industrial production index
According to the Federal State Statistics Service, there is a tendency towards a decrease in indicators of the industrial production index in the Central Black Earth economic region of Russia during 12 months of 2019 – 2020 (Picture 14). At the same time, the average index month-over-month made 100,6%.

Picture 14. Averaged industrial production index in regions of the Central Black Earth economic region of Russia in 2019 - 2020, month-over-month (%)

According to the same data, the share of enterprises of the Central Black Earth economic region of Russia in the total amount of revenue from the sale of goods, works, services made 2,577%, countrywide for 2018, and for 9 months of 2019 – 2,528%, that is lower than the indicator for the same period of 2018, which amounted to 2,587%.

Conclusion
A comprehensive assessment of activity of the largest enterprises of the real sector of the economy in the Central economic region of Russia, taking into account the main indices, financial indicators and ratios, points to the prevalence of positive trends (Table 1).

Table 1. Positive and negative trends, evaluation factors of TOP -1000

Trends and evaluation factors of TOP-1000	Specific share of factor, %
Rate of growth (decline) in the average size of net assets	10
Increase / decrease in the share of enterprises with negative values of net assets	10
Level of competition / monopolization	5
Rate of growth (decline) in the average size of revenue	10
Rate of growth (decline) in the average size of profit (loss)	10
Growth / decline in average values of net profit of companies	10
Growth / decline in average values of net loss of companies	10
Increase / decrease in average values of total liquidity ratio	5
Increase / decrease in average values of return on investment ratio	-10
Increase / decrease in average values of asset turnover ratio, times	-10
Share of small and medium-sized enterprises in the region in terms of revenue being more than 22%	-10
Regional concentration	5
Financial position (the largest share)	10
Solvency index Globas (the largest share)	10
Industrial production index	5
Dynamics of the share of proceeds of the region in the total revenue of the RF	-10
Average value of the specific share of factors	3,8

positive trend (factor), negative trend (factor).