In 2017 1,3 mln contracts at total volume of 975 bln RUB were executed with small businesses.

The volume of contracts with small businesses (SMEs) is amounted a little over 15% of total cost of contracts executed for the reporting period (6 320 bln RUB) that corresponds to legislative regulation obliging governmental customer to place procurements with SMEs.

The number of contracts with small businesses increased by 12% and their cost — by 27% compared to 2016. Average price of contract executed with small and medium enterprises (SMEs) in 2017 amounted to 741 th RUB and increased by 28% compared to 2016.

The increase in rates of budget allocation to small businesses through contract system remains this year: 241 thousand contracts at total amount of 147 bln RUB are executed in the 1st quarter of 2018; that is more than in the similar period of the past year by 30% of the amount and 40% of the number.

Almost half of budget funds allocated for procurements with small business is accumulated in 10 regions.

The majority of procurements placed with small businesses is located in Moscow. The capital leads among all regions in terms of small business financing through contract system — 222 bln RUB or 19% of total value of procurements in 2017. Saint-Petersburg follows next with a noticeable lag and 95 bln RUB (8%). Moscow region with 73 bln RUB (6%) closes the top three. Totally 556 billion or 48% of the total procurement value was accounted for Top-10 regions (see Picture 1).

Picture 1. Total value of procurements placed with SMEs, by regions of RF, 2017, in %

A third of all procurements placed with SMEs is connected with construction activity.

Construction is most-coveted service for governmental or municipal customers — 30% of procurements are related to this activity. The share of repair of vehicles is 12%, and 10% of total procurements value falls for other activities (see Picture 2).

Picture 2. Most common types of activity by total value of procurements placed with SMEs, 2017, in %

The maximum price of the current contract, executed with a small enterprise, exceeded 10 bln rubles.

Among the small businesses, there are organizations which executed contracts on more than 1 bln RUB.

The small enterprise LLC Spetstrans providing services for processing of solid domestic waste in the North-West administrative district of Moscow executed the contract at 12,4 bln RUB (see Table 1). The microenterprise Tehnostroy LLC undertakes to accomplish construction of a highway bypassed Pskov until December 16, 2019. The contract price is 6,8 bln RUB.

The maximum price of the current contract, executed with an individual entrepreneur, does not exceed 100 mln RUB.

Individual entrepreneurs (hereinafter IE) actively participate in the procurement system. Although the maximum volume of contracts in force is significantly inferior to contracts concluded with SMEs. However the contract system has become an essential component in maintaining the financial well-being of small businesses and a source of «long» money. The maximum value of contract with IE is 99 mln RUB (see Table 2).

Since the 1st of July, 2018 amendments to the law came into force following the Government Decree as of April 12, 2018 N 439.

Having freed up small purchases worth up to 1 mln RUB from the need for security, the law now obliges participants in large procurements to place contract security in special accounts with accredited banks.

Following the changes in the legislation, it is necessary to expect a shift in the activity of SMEs towards small purchases, an increase in the number of competing participants, and, in view of the facilitated procedure for participation in small purchases, the need for companies to be checked for solvency and reliability.

Information agency Credinform represents the ranking of the largest Russian manufacturers and suppliers of equipment for the food industry. The enterprises with the largest volume of annual revenue (TOP-10) were selected for the ranking, according to the data from the Statistical Register for the latest available periods (for 2014-2016). Then they were ranked by the absolute liquidity ratio (Table 1). The analysis was made on the basis of the data of the Information and Analytical system Globas.

Absolute liquidity ratio (х) is calculated as the ratio of the amount of cash, being at the disposal of a company, to short-term liabilities. It determines the share of short-term liabilities, which an enterprise can pay off in the near future. The recommended value is from 0,1 up to 0,15. The higher is the indicator, the better is the solvency of an enterprise.

However, a too high value of the ratio may indicate an irrational capital structure and unused assets in the form of cash and funds on accounts that, over time and as a result of inflation, depreciate and lose their initial liquidity.

The experts of the Information agency Credinform, taking into account the actual situation both in the economy as a whole and in the sectors, has developed and implemented in the Information and Analytical system Globas the calculation of practical values of financial ratios that can be recognized as normal for a particular industry.

For manufacturers and suppliers of equipment for the food industry the industry average practical values of the absolute liquidity ratio made in 2016 from 0,01 up to 0,34 and 0,37, respectively.

For getting of the most comprehensive and fair picture of the financial standing of an enterprise it is necessary to pay attention to all combination of indicators and financial ratios.

Table 1. Net profit, revenue, absolute liquidity ratio, solvency index Globas of the largest Russian manufacturers and suppliers of equipment for the food industry (TOP-10)

Name, INN, region, type of activity	Revenue, mln RUB		Net profit, mln RUB		Absolute liquidity ratio (x)		Solvency index Globas
	2015	2016	2015	2016	2015	2016
MELINVEST NJSC INN 5257003490 Nizhny Novgorod region Manufacture of machinery and equipment for production of food, beverages and tobacco products	1 401	1 392	169	137	1,24	2,24	180 High
MASHINOSTROITELNAYA KOMPANIYA TEKHNEKS LLC INN 6678049565 Sverdlovsk region Manufacture of machinery and equipment for production of food, beverages and tobacco products	1 156	1 787	68	156	0,78	0,66	169 Superior
KHS RUS LLC INN 7706502693 Moscow Wholesale of machinery and equipment for production of food, beverages and tobacco products	1 114	1 230	95	91	0,28	0,44	211 Strong
ZAVOD BRANDFORD LLC INN 4401143067 Kostroma region Manufacture of machinery and equipment for production of food, beverages and tobacco products	2 375	3 931	348	372	0,05	0,42	198 High
ALFA LAVAL POTOK NJSC INN 5018035564 Moscow region Manufacture of machinery and equipment for production of food, beverages and tobacco products	6 064	4 232	174	55	0,20	0,21	245 Strong
AIRCOOL CO LLC INN 7825124257 St. Petersburg Wholesale of machinery and equipment for production of food, beverages and tobacco products	1 498	1 293	75	50	0,22	0,18	230 Strong
TEKNOPAK LLC INN 7701372708 Moscow Wholesale of machinery and equipment for production of food, beverages and tobacco products	50	1 338	2	13	0,48	0,08	258 Medium
ANTES LLC INN 5018023992 Moscow region Wholesale of machinery and equipment for production of food, beverages and tobacco products	1 349	1 318	70	135	0,29	0,07	191 High
BRANDFORD LLC INN 4401045285 Kostroma region Manufacture of machinery and equipment for production of food, beverages and tobacco products	1 389	2 054	2	118	0,00	0,05	229 Strong
NKH-LOGISTIK LLC INN 5257154509 Nizhny Novgorod region Wholesale of machinery and equipment for production of food, beverages and tobacco products	48	1 247	2	31	0,00	0,00	260 Medium
Total by TOP-10 companies	16 444	19 821	1 005	1 159
Average value by TOP-10 companies	1 644	1 982	100	116	0,36	0,44
Industry average value in the manufacture of machinery and equipment for production of food	67	68	3	3	0,14	0,13
Industry average value in the wholesale of machinery and equipment for production of food	48	51	1	3	0,13	0,12

— growth of the indicator to the previous period, — decline of the indicator to the previous period.

The average value of the absolute liquidity ratio of TOP-10 companies in 2016 is higher than the recommended and practical intervals and above the industry average indicators.

Picture 1. Absolute liquidity ratio and revenue of the largest Russian manufacturers and suppliers of equipment for the food industry (TOP-10)

Over the course of 10 years, the industry average indicators of the absolute liquidity ratio in the manufacture of machinery and equipment for food production tend to increase, and in the wholesale of machinery and equipment for food production — to decrease (Picture 2).

Picture 2. Change in the industry average values of the absolute liquidity ratio of the largest Russian manufacturers and suppliers of equipment for the food industry in 2007 — 2016