The Government approved to reduce the period of registration for new legal entities

A bill of the reduction of period of registration from five to three days for individual entrepreneurs and legal entities, which are established for the first time, was introduced in the State Duma. According to the Prime-Minister of the Russian Federation Dmitrii Medvedev, the simplification of registration procedure will make the Russian business environment more attractive both for domestic and foreign investors.

The Prime-Minister also noted, that the reduction of period of registration will positively influence on the position of Russia in the international DoingBusiness rating. The rating is annually published by the World Bank and estimates the profitableness of doing business in different countries. According to 2014 results, Russia took the 62 place among 189 countries; the leader of the rating is Singapore.

However, the business-community representatives think, that the reduction of legally established terms for registration of legal entities and individual entrepreneurs won’t significantly influence on business activity level. The businessmen note, that today the difficulties are caused not by the procedure duration, but by the number of forms, which are required to fill. Thus, the most popular reason of denial of registration is the mismatch of submitted application form to the established requirements. The application form must be simplified as much as possible or the staff of registration authority must be obligated to make an application at the place of handling in order to optimize the registration process.

It should be reminded, that the bill was developed by the Ministry of Economic Development of the Russian Federation in the summer 2014. The original version obligated banks to make a decision about opening of the account within 10 days. However this offer was excluded from the final version of the project, as the Central Bank didn’t support it.

Total liquidity of sugar manufacturers

Information agency Credinform prepared a ranking of companies engaged in sugar manufacturing.

Companies with the mentioned activity type and the highest volume of revenue were selected for this ranking according to the data from the Statistical Register for the latest available period (for the year 2013). The enterprises were ranked by decrease in sales revenue. Total liquidity ratio was calculated for all companies of the ranking.

Total liquidity ratio (x) is a sum of working assets of the company to long-term liabilities. It shows the sufficiency of funds for repayment of short-term liabilities. The recommended value varies from 1,0 to 2,0.

The ratio assesses the liquidity of assets more overall. Since current liabilities are repaid mainly by means of current assets, the normal liquidity level requires the excess of current assets value over the sum of current liabilities. The normal value of the ratio is not less than 1. However, the industry classification of the company, structure of reserves, status of accounts receivable, production lead time and other factors influence the normal value.

The value of 1 supposes the equity of current assets and liabilities. Considering that the liquidity level of various assets parts differ significantly, one can concede that not all assets will be immediately realized or realized at the whole cost. This can invite a danger of weakening the company’s financial situation. Moreover, the enterprise should have some volume of inventories to continue the business after the repayment of all current liabilities.

If the value far exceeds 1, it can be concluded that the company have the significant volume of free resources, which were formed due to own source. Through the spectacle of creditors, this way of working assets formation is the most satisfactory. Alongside with that, according to the manager’s view, the significant inventory stockpiling and diversion of funds to accounts receivable can be connected with ineffective asset management. At the same time, the company probably uses its drawings possibilities not in full. This carries a threat of competitiveness loss due to the absence of investments in production growth and taking of new outlets. 

Table. Revenue, total liquidity and solvency index of the largest sugar manufacturers (Top-10)
NameRegionRevenue, mln. RUB, 2013Total liquidity ratio, (х)Solvency index Globas-i®
INN 6804000019
The Tambov region 6 943,1 1,0 214 high
INN 3126000974
The Belgorod region 5 341,2 1,5 230 high
3 ООО Kristall
INN 6824004406
The Tambov region 3 145,4 1,1 273 high
INN 4804000086
The Lipetsk region 2 876,3 1,4 225 high
INN 2341006687
The Krasnodar Territory 2 842,1 2,2 210 high
INN 2357005329
The Krasnodar Territory 2 772,7 1,0 246 high
INN 5711002822
The Orel region 2 668,4 1,2 239 high
INN 3652000739
The Voronezh region 2 624,3 1,1 260 high
9 OAO Zainsky Sakhar
INN 1647008721
The Republic of Tatarstan 2 432,5 0,9 228 high
10 OJSC Olkhovatsky Sugar Factory
INN 3618003708
The Voronezh region 2 329,0 1,5 211 high

sugar manufacturing

Figure. Total liquidity and revenue of the largest sugar manufacturers (Top-10) 

According to the last published financial accounts (2013), the revenue of the largest sugar manufacturers of the RF (Top-10) amounted to 34,0 bln. RUB; the annual surplus is 4,4%.

According to the 2014 year end, 5 212 679 tons of sugar (sand sugar) were produced in Russia; that is by 6,3% higher than in 2013 (4 903 798 tons).

The best values of total liquidity ratio of the Russian largest sugar manufacturers belong to the following companies: OPEN JOINT STOCK COMPANY SAKHARNYI ZAVOD LENINGRADSKY (2,2), OPEN JOINT STOCK COMPANY VALUYKISAKHAR (1,5) and OJSC Olkhovatsky Sugar Factory (1,5).

Two of ten companies show the negative values: liabilities exceed assets (OAO Zainsky Sakhar (0,9) and JOINT STOCK COMPANY USPENSKIY SAHARNIK (less than 1,0)). This indicates over-crediting of companies and can be resulted in adverse consequences for the finance stability (assuming a one-time requirement of all creditors to repay debts).

All Top-10 companies got a high solvency index that shows the ability to timely and fully repay the debt with minimal risk of default.