Article
Trends in activity of Russian small business

Information agency Credinform has prepared a review of activity trends of Russian small business. The largest companies (ТОP-1000), registered in the Register of small and medium-sized enterprises of the Russian Federal Tax Service, in terms of annual revenue were selected according to the data from the Statistical Register for the latest available periods (2012 - 2017). The analysis was based on data of the Information and Analytical system Globas.

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

Table 1. The largest companies of real economy with the highest and lowest net assets rate in 2013 – 2017
Position in ТОP-1000
Name, INN, activity
Net assets value, million RUB Solvency index Globas
2013 2014 2015 2016 2017
1 2 3 4 5 6 7
1 LLC ORIMI TRADE
INN 7804069580 Leningrad Region
Wholesale of coffee, tea, cocoa and spices
up10264 down5282 up10207 down7810 up8652 196 High
2 NAO Investtrast
INN 7751048224 Moscow
Predistributive operations of own real estate
up1965 up3052 up8197 down7705 down7539 302 Adequate
3 LLC EDINYI MIGRATSIONNYI TSENTR
INN 7842421041 Saint-Petersburg
Other human resources provision
up898 down592 up3231 up4328 up5391 213 Высокий
4 NAO MURMANSELD 2
INN 5193104130 Murmansk region
Marine fishing
In process of reorganization in the form of merger of other legal entities, 24.01.2019
up996 up1108 up1976 up3440 up4144 178 High
5 SAAMI LTD
INN 5193410419 Murmansk region
Marine fishing
up1500 up2783 up3280 up3699 up4023 184 High
996 LLC MISHEL - ALKO
INN 6125019230 Rostov region
Wholesale of alcoholic beverages, including beer and potable ethanol
up177 up198 down30 down-526 down-702 286 Medium
997 LLC TRANSGARANT AGRO
INN 2364007084 Krasnodar region
Wholesale of grain, unmanufactured tobacco, seeds and animal feeds
The bankruptcy case is considered in respect of the company
up12 up13 up25 up33 down-835 550 Insufficient
998 NAO PHARMAMED
INN 7723021855 Moscow
Non-specialised wholesale trade
up2 up4 up59 down-432 down-894 237 Medium
999 PAO TYVAENERGOSBYT
INN 1701040660 Republic of Tuva
Distribution of electricity
down-1153 down-1301 down-1375 down-1445 down-1506 349 Adequate
1000 PAO MOSOBLFARMATSIYA
INN 5074114509 Moscow region
Retail sale of pharmaceuticals in specialised stores (drugstores)
up964 down0 down-598 down-1423 down-1641 321 Adequate

Up — growth indicator in comparison with prior period, Up — decline indicator in comparison with prior period.

For the last five years, the average values of TOP-1000 net assets showed the growing tendency (Picture 1).

Picture 1. Change in average net assets value of ТОP-1000 companies in 2013 – 2017 Picture 1. Change in average net assets value of ТОP-1000 companies in 2013 – 2017

For the last five years, the share of ТОP-1000 enterprises with lack of property showed the downward trend (Picture 2).

Picture 2. The share of enterprises with negative net assets value in ТОP-1000 Picture 2. The share of enterprises with negative net assets value in ТОP-1000

Sales revenue
In 2017, the total revenue of 10 largest companies amounted to 10% from ТОP-1000 total revenue (Picture 3). This fact testifies high level of competition within small businesses.

Picture 3. Shares of TOP-10 in TOP-1000 total revenue for 2017 Picture 3. Shares of TOP-10 in TOP-1000 total revenue for 2017

In general, the increasing tendency in revenue is observed (Picture 4).

Picture 4. Change in average revenue of TOP-1000 in 2013 – 2017 Picture 4. Change in average revenue of TOP-1000 in 2013 – 2017

Profit and loss
In 2017 profit of 10 largest companies amounted to 25% from TOP-1000 total profit (Picture 5).

Picture 5. Shares of TOP-10 companies in TOP-1000 total profit for 2017 Picture 5. Shares of TOP-10 companies in TOP-1000 total profit for 2017

For the last five years, the average profit values of TOP-1000 show the increasing tendency (Picture 6).

Picture 6. Change in average profit of TOP-1000 in 2013 – 2017 Picture 6. Change in average profit of TOP-1000 in 2013 – 2017

Over a five-year period, the average net profit values of ТОP-1000 show the increasing tendency, along with this the average net loss is growing (Picture 7).

Picture 7. Change in average net profit/loss of ТОP-1000 companies in 2013 – 2017 Picture 7. Change in average net profit/loss of ТОP-1000 companies in 2013 – 2017

Main financial ratios
For the last five years, the average values of the current liquidity ratio were higher than the recommended values - from 1,0 to 2,0, with growing tendency (Picture 8).

The current liquidity ratio (ratio of total working capital to short-term liabilities) shows the sufficiency of company’s assets to meet short-term obligations.

Picture 8. Change in average values of current liquidity ratio of TOP-1000 companies in 2013 – 2017 Picture 8. Change in average values of current liquidity ratio of TOP-1000 companies in 2013 – 2017

For the last five years, the high level of the average values of ROI ratio with increasing tendency is observed (Picture 9).

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

Picture 9. Change in average values of ROI ratio in 2013 – 2017 Picture 9. Change in average values of ROI ratio in 2013 – 2017

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.

For the last five years, this business activity ratio demonstrated the downward trend (Picture 10).

Picture 10. Change in average values of assets turnover ratio of TOP-1000 companies in 2013 – 2017 Picture 10. Change in average values of assets turnover ratio of TOP-1000 companies in 2013 – 2017

Production structure
The largest share of ТОP-1000 total revenue is occupied by the enterprises engaged in wholesale trade (Picture 11).

Picture 11. Distribution of activities in ТОP-1000 total revenue Picture 11. Distribution of activities in ТОP-1000 total revenue

Among small businesses in ТОP-1000 list, the largest share in total revenue have medium-sized enterprises (Picture 12).

Picture 12. Shares of small and medium-sized enterprises in ТОP-1000, % Picture 12. Shares of small and medium-sized enterprises in ТОP-1000, %

Main regions of activity
ТОP-1000 companies are unequally located across the country. 35% of the largest enterprises in terms of revenue are located in Moscow and St. Petersburg (Picture 13).

Picture 13. Distribution of TOP-1000 revenue by 10 most populated regions of Russia Picture 13. Distribution of TOP-1000 revenue by 10 most populated regions of Russia

Financial position score
An assessment of the financial position of TOP-1000 companies shows that more than a half of them have stable or above average financial position (Picture 14).

Picture 14. Distribution of TOP-1000 companies by financial position score Picture 14. Distribution of TOP-1000 companies by financial position score

Solvency index Globas
Most of TOP-1000 companies got superior/high or strong/medium Solvency index Globas, this fact shows the ability of the companies to meet their obligations in time and fully (Picture 15).

Picture 15. Distribution of TOP-1000 companies by Solvency index  Globas Picture 15. Distribution of TOP-1000 companies by Solvency index Globas

Conclusion
A complex assessment of activity of the largest companies of Russian small business, taking into account the main indexes, financial ratios and indicators, demonstrates the presence of positive trends (Table 2).

Table 2. Favorable and unfavorable trends, assessment factors
Trends and assessment factors Relative share, %
Growth/drawdown rate of average net assets value up10
Increase / decrease in the share of enterprises with negative net assets up10
The level of capital concentration up10
Growth/drawdown rate of average revenue up10
Growth/drawdown rate of average net profit (loss) up10
Increase / decrease in average net profit of companies up10
Increase / decrease in average net loss of companies down-10
Increase / decrease in average values of current liquidity ratio up5
Increase / decrease in average values of ROI ratio up10
Increase / decrease in average values of assets turnover ratio, times down-10
Regional concentration down-10
Financial position (the largest share) up10
Solvency index Globas (the largest share) up10
Average value of factors up5,0

Up — favorable trend (factor), Up — unfavorable trend (factor).

Article
Small and medium business in the Russian economy

For the first time, the Federal State Statistics Service published official statistical information on the share of small and medium-sized businesses (SMEs) in the Russian economy. In 2017, it amounted to 21,9% of gross domestic product (GDP) or 20 trillion RUB.

Previously, such studies were carried out by the Non-Profit Partnership Association of Entrepreneurial Organizations «OPORA», uniting over 100 business and industry associations. In 2015, according to these calculations, the share of SMEs in GDP was 20%, with the number of employees exceeding 17 million people.

Information on small business is also contained in the Unified Register of small and medium-sized businesses. 6 058 279 SMEs with 15 843 300 employees are registered in the Register as of February 10, 2019.

The Unified Register of small and medium-sized businesses was established in accordance with the Federal Law of 29.12.2015 No. 408-FL and is formed by the Federal Tax Service on the basis of:

  • Unified State Register of Legal Entities (EGRUL);
  • Unified State Register of Individual Entrepreneurs (EGRIP);
  • data presented in accordance with the tax legislation of the Russian Federation on the average number of employees and income from business activities;
  • data contained in documents related to the application of special tax regimes;
  • data provided by legal entities and individual entrepreneurs.

Comprehensive data on SMEs and their business is available by subscription to the Information and Analytical system Globas