Accounts payable of furniture manufacturers

Information agency Credinform has prepared a ranking of the largest Russian furniture manufacturers. The companies with the largest annual revenue (TOP-10) were selected for the ranking, according to the data from the Statistical Register for the latest available accounting periods (2015 - 2017). Then they were ranked by accounts payable turnover ratio (Table 1). The analysis was based on the data from the Information and Analytical system Globas.

Accounts payable turnover ratio (days) is a ratio of average accounts payable for the period to sales revenue. The ratio indicates the number of days it took the company to pay its average payables.

The ratio reflects debt redemption to counterparties, and is calculated for assessment of money flow in order to make conclusions about company’s performance and its financial strategy’s efficiency.

The lower the ratio the faster the enterprise pays its debts to suppliers. Increase in turnover may indicate either difficulties in accounts settlement, or a more efficient management of relations with suppliers that provides a more profitable, deferred payment schedule, and uses payables as a source of cheap financial resources.

A calculation of practical values of financial ratios, that might be considered as normal for a certain industry, has been developed and implemented in the Information and Analytical system Globas by the experts of Information Agency Credinform, having taken into account the current situation in the economy as a whole and in the industries. Practical value of accounts payable turnover amonts up to 90.88 days for furniture manufacturers.

All indicators and financial ratios are to be considered to get a full and comprehensive vision of company’s financial standing.

Table 1.Net profit, revenue, accounts payable turnover, solvency index Globas of the largest Russian furniture manufacturers (TOP-10)
Name, INN,
region, core activity
Sales revenue,
billion RUB
Net profit (loss),
billion RUB
Accounts receivable turnover,
Solvency index Globas
2016 2017 2016 2017 2016 2017
1 2 3 4 5 6 7 8
OZ Micron NJSC
INN 6002005478 Pskov region
Manufacture of office and shop furniture
up3,53 up3,88 up0,546 up0,623 down17,89 up16,60 177 Superior
INN 4715011103 Leningrad region
Manufacture of furniture
up3,36 up3,43 down-0,204 up-0,085 down30,41 down31,31 226 Strong
King of Sofas LLC
INN 6432009756 Saratov region
ПManufacture of other furniture
up5,30 down4,61 up0,214 down0,161 up39,65 up33,85 293 Medium
INN 3305037917 Vladimir region
Manufacture of mattresses
down7,49 up8,45 down1,053 down0,321 down44,45 up42,75 218 Strong
INN 5050079140 Moscow region
Manufacture of kitchen furniture
up3,31 up3,91 up0,027 up0,041 up128,00 up43,81 219 Strong
INN 5049007736 Moscow region
Manufacture of other furniture
down3,31 up3,61 up0,001 up0,115 up49,37 up47,19 202 Strong
INN 5029042443 Moscow region
Manufacture of other furniture
up2,94 down2,91 down0,053 down0,026 down52,28 down56,76 257 Medium
INN 3907046732 Kaliningrad region
Manufacture of furniture
down8,81 up10,50 down0,012 down-0,0003 down99,90 up72,57 253 Medium
Furniture Factory Marya LLC
INN 6455026772 Saratov region
Manufacture of kitchen furniture
up6,49 up7,19 up0,025 up0,142 down62,08 down74,95 204 Strong
INN 4312146860 Kirov region
Manufacture of furniture
down4,14 down3,35 down-0,076 up0,004 up85,62 down89,48 304 Adequate
Total for TOP-10 companies down48,69 up51,84 down1,651 down1,349    
Average value for TOP-10 companies down4,87 up5,18 down0,165 down0,135 up60,97 up50,93
Industry average value up0,03 up0,03 up0,001 down0,001 up96,31 up90,88

Up — improvement compared to prior period, Up — decline compared to prior period.

Average value of accounts payable turnover of TOP-10 companies is above the industry average value. In 2017 six of TOP-10 companies showed improvement of the indicator.

Picture 1. Accounts payable turnover and revenue of the largest Russian furniture manufacturers (TOP-10) Picture 1. Accounts payable turnover and revenue of the largest Russian furniture manufacturers (TOP-10)

During the decade average industry values of accounts payable turnover tend to decrease (Picture 2).

Picture 2. Change of industry average values of accounts payable turnover ratio of Russian furniture manufacturers in 2008 – 2017 Picture 2. Change of industry average values of accounts payable turnover ratio of Russian furniture manufacturers in 2008 – 2017
World trade leaders

The world trade is currently undergoing a transformation: Russia, China, Turkey start to work out the plans to abandon the dollar in calculations among themselves; the U.S. trade sanctions are applied not only to Russia and a number of "unfriendly" states, but also to the closest allies; the duties war between USA and China risks to undermine the impressive dynamics of global cooperation.

According to 2017 results, international trade in goods and services amounted to USD 35.8 trn, 10.6% higher than in 2016.

China, USA and Germany are leaders by foreign trade turnover, controlling almost 30% of world trade. Meanwhile USA has the world's largest negative balance of trade (excess of imports over exports) – minus USD 862 bln (see Table 1). In this case, it becomes clear the U.S. attempts to correct the current disadvantaged position of the country. In this regard, the following point is remarkable: although Russia significantly lags behind the top three countries in terms of foreign trade turnover, it has the world's third-largest positive balance of trade: USD 116 bln, second only to China with USD 421 bln and Germany with USD 281 bln.

Table 1. Top-20 countries by foreign trade volume in 2017
Country Foreign trade turnover, bln USD Share in global trade,% Export, bln USD Share in world export, % Import, bln USD Share in world import, % Balance of trade, bln USD
  GLOBAL 35754 100 17730 100 18024 100,0 -294
1 China 4105 11,5 2263 12,8 1842 10,2 421
2 USA 3956 11,1 1547 8,7 2409 13,4 -862
3 Germany 2615 7,3 1448 8,2 1167 6,5 281
4 Japan 1370 3,8 698 3,9 672 3,7 26
5 Netherlands 1226 3,4 652 3,7 574 3,2 78
6 France 1160 3,2 535 3,0 625 3,5 -90
7 Hong Kong 1140 3,2 550 3,1 590 3,3 -40
8 Great Britain 1089 3,0 445 2,5 644 3,6 -199
9 Republic of Korea 1052 2,9 574 3,2 478 2,7 96
10 Italy 959 2,7 506 2,9 453 2,5 53
11 Canada 863 2,4 421 2,4 442 2,5 -21
12 Mexico 841 2,4 409 2,3 432 2,4 -23
13 Belgium 833 2,3 430 2,4 403 2,2 27
14 India 745 2,1 298 1,7 447 2,5 -149
15 Singapore 701 2,0 373 2,1 328 1,8 45
16 Spain 672 1,9 321 1,8 351 1,9 -30
17 UAE 628 1,8 360 2,0 268 1,5 92
18 Russia 592 1,7 354 2,0 238 1,3 116
17 Taiwan 576 1,6 317 1,8 259 1,4 58
20 Switzerland 569 1,6 300 1,7 269 1,5 31

In 2017 the Russian foreign trade volume amounted to USD 592 bln or 1,7% of the global turnover. Thus, Russia takes the 18th place. USD 354 bln of the amount (2% of world export) were exported, USD 238 bln (1,3% of world import) were imported.

According to the latest data published by the Federal Customs Service, the positive growth dynamics of export and import is observed in January-July 2018 compared with the same period in 2017. In relative terms, this is 28.5% and 11%, respectively. By the end of 2018, upon the maintaining of momentum in the second half of the year (taking into account the devaluation of ruble, the dynamics may be slightly lower), the volume of foreign trade turnover will increase to USD 719 bln, including export – 454 bln, import – 264 bln, positive balance of trade - USD 190 bln (Picture 1).

Picture 1. Dynamics of Russian foreign trade, bln USD  Picture 1. Dynamics of Russian foreign trade, bln USD

According to the data collected by the Central Bank of the Russian Federation, the top value of the Russian foreign trade was recorded in 2012 and 2013 – USD 863 bln. In contemporary landscape, this would put our country in the 11th place in the world. Under otherwise equal conditions, in case we extrapolate the current rate of trade development to 2019, we can expect USD 877 bln in the next year. This will exceed the previous historical record and bring Russia closer to the Top-10 leaders. In that way, the previously lost positions will be fully restored.