Information agency Credinform has prepared a review of trends of the largest Russian companies of the light industry.

The largest manufacturers of textile, clothes and leather goods (TOP-1000) in terms of annual revenue were selected for the analysis according to the data from the Statistical Register and the Federal Tax Service for the latest available periods (2014-2019). The analysis was based on the data of the Information and Analytical system Globas.

Net assets are total assets less total liabilities. This indicator reflects the real value of the property of an enterprise. When the company’s debt exceeds the value of its property, the indicator is considered negative (insufficiency of property).

The largest company in term of net assets is JSC GLORIA JEANS CORPORATION, INN 6166034397, Rostov region. In 2019, net assets value of the company amounted to 18,6 billion RUB.

The lowest net assets value among TOP-1000 belonged to LLC ZAVOD ELASTIK, INN 1651041168, the Republic of Tatarstan. In 2019, insufficiency of property of the organization was indicated in negative value of -2,0 billion RUB.

Covering the six-year period, the average net assets values have a trend to increase with a decreasing growth rate (Picture 1).

Picture 1. Change in industry average net assets value in 2014 – 2019

Over the past six years, the share of companies with insufficient property had a trend to decrease (Picture 2).

Picture 2. Shares of TOP-1000 companies with negative net assets value in 2014-2019

Sales revenue
In 2019, the revenue volume of 10 largest companies of the industry was 29% of total TOP-1000 revenue (Picture 3). This is indicative of relatively high level of competition in the industry.

Picture 3. The share of TOP-10 companies in total 2019 revenue of TOP-1000

In general, there is a trend to increase in revenue with decreasing growth rate (Picture 4).

Picture 4. Change in industry average net profit in 2014 – 2019

Profit and loss
The largest organization in term of net profit is PV OOO FIRMA TECHNOAVIA, INN 7724152603, Moscow. The company’s profit for 2019 reached 1,4 billion RUB.

Covering the six-year period, there is a trend to increase in average net profit with decreasing growth rate (Picture 5).

Picture 5. Change in industry average net profit (loss) values in 2014 – 2019

For the six-year period, the average net profit values of TOP-1000 have the increasing trend with the decreasing net loss (Picture 6).

Picture 6. Change in average net profit and net loss of ТОP-1000 in 2014 – 2019

Key financial ratios
Covering the six-year period, the average values of the current liquidity ratio were above the recommended one - from 1,0 to 2,0 with a trend to increase (Picture 7).

Current liquidity ratio (current assets to short-term liabilities) shows the sufficiency of company’s assets to repay on short-term liabilities.

Picture 7. Change in industry average values of current liquidity ratio in 2014 – 2019

Covering the six-year period, the average values of ROI ratio have a trend to decrease (Picture 8).

ROI ratio is calculated as net profit to sum of shareholders equity and long-term liabilities, and shows the return of equity involved in commercial activities and long-term borrowed funds.

Picture 8. Change in industry average values of ROI ratio in 2014 – 2019

Assets turnover ratio is the ratio of sales revenue and company’s average total assets for a period. It characterizes the effectiveness of using of all available resources, regardless the source of their attraction. The ratio shows how many times per year the full cycle of production and circulation is performed, generating the corresponding effect in the form of profit.

Covering the six-year period, business activity ratio demonstrated the decreasing trend (Picture 9).

Picture 9. Change in average values of assets turnover ratio in 2014 – 2019

Small business
88% of TOP-1000 organizations are registered in the Register of small and medium-sized enterprises of the Federal Tax Service of the Russian Federation. Their share in total revenue of TOP-1000 is almost 45% that is double the national average in 2018-2019 (Picture 10).

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

Main regions of activity
Companies of TOP-1000 are registered in 66 regions of Russia, and unequally located across the country. Almost 47% of companies largest by revenue are located in Moscow, Moscow region and Rostov region (Picture 11).

Picture 11. Distribution of TOP-1000 revenue by regions of Russia

Financial position score
Assessment of the financial position of TOP-1000 companies shows that the majority of them have financial position above average (Picture 12).

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

Solvency index Globas
Most of TOP-1000 companies got Superior / High and Strong / Medium index Globas. This fact shows their ability to meet their obligations fully (Picture 13).

Picture 13. Distribution of TOP-1000 companies by solvency index Globas

Conclusion
Complex assessment of activity of the largest Russian providers of social services, taking into account the main indexes, financial ratios and indicators, demonstrates the prevalence of positive trends in the industry in 2014 - 2019 (Table 1).

Table 1. Positive and negative trends, evaluation factors

Trends and evaluation factors	Relative share of factors, %
Dynamics of the average net assets value	10
Rate of growth (decrease) 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
Dynamics of the average revenue	10
Rate of growth (decrease) in the average size of revenue	-10
Dynamics of the average profit (loss)	10
Rate of growth (decrease) in the average profit (loss)	-10
Growth / decline in average values of companies’ net profit	10
Growth / decline in average values of companies’ net loss	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 businesses in terms of revenue being more than 22%	10
Regional concentration	-10
Financial position (the largest share)	10
Solvency index Globas (the largest share)	10
Average value of relative share of factors	2,4

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

Information agency Credinform has prepared a ranking of light industry enterprises in Russia. The manufacturers of textile, clothes, leather goods. (TOP-10) with the largest annual revenue were selected for the ranking, according to the data from the Statistical Register and the Federal Tax Service for the latest available accounting periods (2017 - 2019). Then the enterprises were ranked by the accounts receivable turnover (Table 1). The analysis was based on the data from the Information and Analytical system Globas.

Accounts receivable turnover (days) is calculated as a ratio of the accounts receivable average value for a period to sales revenue. The ratio shows how many days it takes for an enterprise to pay off the average sum of its accounts receivable.

The indicator reflects the procedure of satisfaction of liablilities to contractors. It is calculated for cash flow assesment, that gives an opportunity to make conclusions on company’s working efficiency and the chosen financial strategy.

The lower the indicator is, the faster an enterprise settles accounts with suppliers. The increase of turnover indicates both the problems with payment of accounts, and more effective organization of relations with suppliers, providing more profitable and well-managed payment schedule and using accounts receivable as a source of cheap financial resources.

In order to get the most comprehensive and fair picture of the financial standing of an enterprise it is necessary to pay attention to all combination of financial indicators and company’s ratios.

Net profit, revenue, accounts receivable turnover, solvency index Globas of the largest light industry enterprises in Russia (TOP-10)

Name, INN, region	Revenue, million RUB		Net profit (loss), million RUB		Accounts receivable turnover, days		Solvency index Globas
	2018	2019	2018	2019	2018	2019
1	2	3	4	5	6	7	8
JSC GLORIA JEANS CORPORATION INN 6166034397 Rostov region	37 553,1	37 719,2	1 280,8	927,3	18,74	20,56	262 Medium
PV OOO FIRMA TECHHNOAVIA INN 7724152603 Moscow	15 467,6	16 719,9	1 855,9	1 433,7	21,95	22,86	184 High
LLC AVGOL INN 7116128972 Tula region	4 210,4	4 631,2	-427,1	762,8	23,75	26,25	250 Medium
AO FPG ENERGOKONTRAKT INN 7703268269 Moscow	6 221,9	6 728,2	268,9	212,7	32,98	30,43	207 Strong
NJSC Ralf Ringer INN 7718160370 Moscow	5 943,4	5 752,3	-107,6	-281,9	53,95	51,88	293 Medium
LLC MIRTEX INN 3702644450 Ivanovo region	3 306,1	4 400,2	207,2	581,0	81,06	52,47	187 High
TDL TEXTILE, LLC. INN 3730010504 Ivanovo region	9 749,4	9 723,7	614,2	378,4	17,38	58,01	261 Medium
Company Limited BELLA INN 5011021499 Moscow region	7 411,2	8 463,4	225,6	491,1	62,65	61,83	165 Superior
LLC AVANGARD INN 7826741774 Leningrad region	7 533,2	8 730,6	151,8	167,4	68,63	78,68	213 Strong
OOO PROMKOMPLEKTATSIYA INN 7721624833 Moscow region	11 555,9	11 775,5	170,4	151,7	69,41	81,57	241 Strong
Average value for TOP-10	10 895,2	11 464,4	424,0	482,4	45,05	48,45
Average value for TOP-1000	379,4	390,9	17,3	16,3	116,05	124,10

improvement compared to prior period, decline compared to prior period

Average value of accounts receivable turnover of TOP-10 is lower than the average TOP-1000 value. Four companies have the standard value in 2019 comparing to the previous period.

Picture 1. Accounts receivable turnover and revenue of the largest light industry enterprises in Russia (TOP-10)

During 6 years the average industry values of accounts receivable turnover had a trend to increase. (Picture 2)

Picture 2. Change in average values of accounts receivable turnover of TOP-1000 light industry enterprises in Russia in 2014 – 2019