Loans security ratio of soft drinks manufacturers

Information agency Credinform prepared а ranking of loans security ratio of enterprises engaged in manufacturing of soft drinks: lemonade, sweet carbonated water, kvass, drinks, nectars etc. The ranking list includes the largest companies and is based on total revenue as stated in the Statistics register, with the reference period of 2012. The companies were ranked by decrease of loans security ratio.

Loans security ratio (x) – is a relation of profit before taxes and interest on loans to the amount of interest payable. The ratio characterizes the security degree of creditors from non-payment of interest on provided loan. The ratio also shows how many times during reporting period the company earned funds for interest payment on loans.

The recommended value: >1. If there is no ratio value, this indicates that the company has no borrowed funds and, consequently, interest payable to creditors. That is well, but may be not the sign of company’s general well-being, after all sometimes credit resources are simply necessary for successful development. Therefore, the aim of company’s financial management is to observe the reasonable balance between market holding and own financial wellbeing.

Table 1. Loans security ratio of soft drinks manufacturers
NameRegionTurnover 2012, mln. RUBLoans security ratioSolvency index GLOBAS-i®
INN: 3316017655
Vladimir region 1348,732 - 314(satisfactory)
2 United Bottling Group LTD
INN: 6952000100
Tver region 4443,133 6,93 275(high)
2 JSC Deneb
INN: 0541030620
The Republic of Dagestan 1247,19 3,43 189(the highest)
4 PO Undorovsky Zavod Mineralnoy Vody "Volzhanka"
INN: 7321008082
Ulyanovsk region 1062,578 2,5 250(high)
INN: 5031081930
Moscow region 1916,187 2,23 276(high)
6 LLC "NikitiN"
INN: 6901082384
Tver region 1482,247 1,59 299(high)
7 CJSC "Aqua Enterprise "Old Spring"
INN: 2630024445
Stavropol region 959,331 1,19 242(high)
8 JSC Rosinka Company
INN: 4822001318
Lipetsk region 888,668 1,06 249(high)
9 LLC "Coca-Cola HBC Eurasia"
INN: 7701215046
Nizhny Novgorod region 61926,027 -0,25 282(high)
10 LLC PepsiCo Holdings
INN: 7705034202
Moscow region 75851,472 -0,39 262(high)


Loans security ratio of soft drinks manufacturers

Picture. Loans security ratio of soft drinks manufacturers

According to 2012 results, total turnover of TOP-10 largest soft drinks manufacturers amounted to 151 125,6 mln. RUB, having increased on 27,3% during a year.

Popular global brands PepsiCo and Coca-Cola opened their production in Russia and have already become industry’s largest companies in terms of revenue (75,9 bln. RUB and 61,9 bln. RUB respectively), having left far behind its closest competitors. At the same time, these companies showed the worst values of loans security ratio among TOP-10 list companies: LLC PepsiCo Holdings - 0,4, LLC "Coca-Cola HBC Eurasia" - 0,3. Despite the high revenue indicators, enterprises have a loss and, according to revenue ratio, don't provide interest payable to creditors. However, if to take into account the brands popularity and high turnover, investors are hardly worth being afraid of crash of these companies and credit defaults. This fact is confirmed by the independent solvency assessment, invented by Credinform agency. Market leaders have high solvency index GLOBAS-i®. The companies guarantee repayment of the debts, the risk of debt default is minimum or below average. The loans security ratio value of other companies of TOP-10 list is more than 1. In other words, enterprises have the opportunity to pay interest to creditors.

LLC PK AKVALIFE doesn’t have borrowed funds, therefore the coefficient isn't calculated, but it has satisfactory solvency index GLOBAS-i®. That can be explained by cases of delayed payment of its financial liabilities.

Other enterprises of TOP-10 list have high and the highest solvency index GLOBAS-i® of the agency Credinform. This generally testifies of the favorable situation in the industry. From the investment point of view, the cooperation with the companies of ranking list seems to be quite reasonable.

A positive signal for the Russian economy: decrease of foreign capital outflow

Deputy Minister of economic development Andrei Klepach stated that at the end of 2013 capital outflow from Russia will most probably amount to nearly 60 billion USD. This figure is less than official forecast of the Ministry of Economic Development (MED) – 70 billion USD.

It bears reminding that at the end of August the MED worsened the official forecast on net capital outflow on 2013 more than twice as much – from 30-35 billion USD to 70 billion USD. At the same time, the MED not once stated that slackening of the rates of economic growth in the current year is related to negative situation in the investment field.

Klepach in his representation referred to revision of quarterly results, which turned out to be lower than the forecasted. Thus, first two quarters’ data was specified. As for the third quarter, despite the growth of the outflow comparing with the second quarter, the obtained result was anyway lower than the forecasted.

The Bank of Russia also improved the forecasts on capital outflow on the current year from 67 billion USD to 62 billion USD.
According to the Ministry of Economic Development, the capital outflow for July-August amounted to 16-17 billion USD. At the same time, according to the Central Bank of Russia, net capital exports from Russia accelerated from 7 billion USD in the second quarter to 12,9 billion USD in the third only by the private sector. The capital outflow in the first quarter amounted to 28,2 billion USD. At the end of nine months of the current year the capital outflow amounted to 48,1 billion USD.
Speaking about the capital outflow forecast of the MED in the midterm it should be noted that in the next year the ministry expects the outflow of 25 billion USD, and in 2015, according to the new forecast, the inflow of 10 billion rubles is expected (in the previous forecast the zero value was expected). However the forecast on 2016 remained the same - the MED expects the inflow of 20 billion USD.

It is impossible to find direct links between the capital outflow rate and the quality of the country’s economy under conditions of the modern economy. Today the world’s largest capital exporters are quite successful countries: Germany, Switzerland, Holland, Norway, and also China and Japan. Among the largest importers are not only Italy and Spain (both are in crisis), but also successful USA and Canada and rapidly growing Turkey and Brazil.

The capital outflow is a combination of capital withdrawal, including use of income center displacement on it, that certainly has a bad influence on the economy, as the capital begins to work for another country; international investment of internal economic agents or expansion, that is in whole good for the economy; and finally, the balancing of the previous transactions, for instance repayment of foreign loan. In other words, not all the forms of outflow might be recognized negative even in theory.

The fact that the Russian economy is badly in need of investment is an open secret. But under current conditions even the significant cash inflow won’t change the general economic situation, as it will most likely concentrate in debt instruments of the state corporations and banks and in currency speculation. It won’t exert a significant influence on production modernization and up-coming transition of the economy. Therefore the state-wide capital outflow/inflow should be estimated together with goal analysis of the funds received.