Current ratio of Russian iron and steel enterprises

Information agency Credinform prepared a ranking on current ratio of Russian iron and steel companies. The companies with highest volume of revenue were selected for this investigation, according to data from the Statistical Register for the latest available period (for the year 2012). Then, the first 10 enterprises selected by turnover were ranked by decrease in current ratio.

Current ratio measures the ability of a company to discharge its short-term liabilities and shows, what part of current assets will be taken by the settlement of debts. This indicator is calculated as the relation of the sum of current assets of an enterprise to its short-term liabilities and allows investors to estimate an expected business performance, probability of insolvency, bankruptcy. Recommended values: from 2,0 to 3,0.

Current ratio and solvency index of Russian iron and steel companies the largest on turnover, TOP-10
Name, INN Region Turnover for 2012, mln RUB Coverage ratio, (x) Solvency index GLOBAS-i®
ИНН: 3128005752
Belgorod region 64 435 2,44 197
(the highest)
ИНН: 8401005730
Krasnoyarsk territory 288 554 2,27 171
(the highest)
ИНН: 6623000680
Sverdlovsk region 112 970 2,22 194
(the highest)
ИНН: 3803100054
Irkutsk region 37 693 1,98 252
ИНН: 6607000556
Sverdlovsk region 40 775 1,84 176
(the highest)
ИНН: 7414003633
Chelyabinsk region 243 059 1,63 228
ИНН: 2465000141
Krasnoyarsk territory 43 088 1,54 243
ИНН: 7450001007
Chelyabinsk region 93 568 1,1 283
ИНН: 3528000597
Vologda region 223 611 0,81 237
ИНН: 5607019523
Orenburg region 50 949 0,69 302

It is difficult to overemphasize the importance of the metallurgy industry for the national economy. The key advantage of Russian iron and steel industry is the availability of an extensive mineral resources base of iron ore, that allows not only to cover requirements of the domestic market in full, but also to export about 20% of prepared saleable ore. As of today the state balance sheet registers 192 deposits, 190 from which relate to iron-ore deposits. However, at year-end 2012 the cumulative turnover of the 10 largest manufacturers of the branch reduced by 5,14% in comparison with the year 2011 and made 1198 bln RUB. The experts explain such results first of all by obsolescence of production capacities.

 Current ratio of Russian iron and steel enterprises, TOP-10

The 1st place of the ranking belongs to OSKOLSKY ELEKTROMETALLURGICHESKY KOMBINAT OJSC with the value of current ratio 2,44, what conforms with recommended values and testifies to an ability of the enterprise to discharge short-term liabilities using current assets. This company got the highest solvency index GLOBAS-i®, that also characterizes it as financially stable.

The enterprises GORNO-METALLURGICHESKAYA KOMPANIYA NORILSKY NIKEL OJSC and EVRAZ NIZHNETAGILSKY METALLURGICHESKY KOMBINAT OJSC, taken the 2nd and the 3rd places of the ranking respectively, also showed the value of current ratio within the recommended range (2,27 and 2,22), what points to the fact, that these organizations have enough current assets to discharge their short-term liabilities. The company GORNO-METALLURGICHESKAYA KOMPANIYA NORILSKY NIKEL OJSC is also the largest on turnover in the branch at year-end 2012, in spite of the revenue reduction by 6,55% in comparison with the year 2011. Both enterprises got the highest solvency index GLOBAS -i®.

The value of current ratio of the enterprises RUSAL BRATSKY ALUMINIEVY ZAVOD OJSC and RUSAL KRASNOYARSKY ALUMINIEVY ZAVOD OJSC deviates slightly from recommended values, what testifies to an ability of the enterprises to discharge their short-term liabilities. The companies got a high and the highest solvency indexes GLOBAS-i®.

The enterprises CHELYABINSKY METALLURGICHESKY KOMBINAT OJSC and SEVERSTAL OJSC showed the value of current ratio 1,1 and 0,81, what testifies that the volume of their current assets is practically equal to the volume of short-term liabilities, what can cause problems with timely repayment of short-term debts. However, based on the combination of financial and non-financial indicators, both companies got a high solvency index GLOBAS-i®.

URALSKAYA STAL OJSC closed the ranking with the value of current ratio 0,69, that points to the fact, that the enterprise hasn’t enough current assets to discharge all short-term liabilities. The company got a satisfactory solvency index GLOBAS-i®, which also confirms possible difficulties with timely repayment of debts.

Financial organizations will be allowed to interstate information exchange

On the 20th of June the State Duma has passed the bill, approved by the Government of the FR, in its second and third reading, which grants to Russian financial organizations the right to transfer the information on American taxpayers, as well as obliges foreign financial organizations to transfer the information on Russian citizens to Federal Tax Service of the RF.

New rules are focused on the creation of legal conditions for information exchange between Russian and foreign financial organizations and tax authorities.

In some extent such normative acts are of revolutionary nature, because the necessity of disclosure of financial information about residents abroad is long overdue. So that, since the 1st of July the American Law «Foreign Account Tax Comliance Act» (FATCA) comes into effect. It demands from foreign banks to provide information on accounts of American clients to the Internal Revenue Service of the USA. From those banks, which are not ready to comply with the demand, the bank counterparties in the USA will be obliged to withhold taxes at the rate of 30% for a number of payments, including the income from investments.

At the same time our law-maker has included some sufficient clauses:

financial organizations are granted with the right to transfer the information on foreign taxpayers to foreign fiscal bodies
only by gaining approval from the client;
force of the bill in case of its passage won’t be extend to citizens of the RF and legal entities, established under the Russian law,
which have more than 90% of shares of the authorized capital directly or indirectly controlled by the RF or citizens of the RF;
Rosfinmonitoring (the Federal Financial Monitoring Service) has the right to forbid the transfer of requested information
to a foreign tax authority.

In total, it can be observed the liberalization of legal relations in the sphere of interstate exchange of fiscal information, what, finally, will increase the transparency of transactions with foreign counterparties.