The largest enterprises (TOP-10) in terms of annual revenue were selected according to the data from the Statistical Register for the latest available periods (2016 and 2015). Then the companies were ranged by service profitability ratio (Table 1). The analysis was based on data of the Information and Analytical system Globas.

Service or product profitability ratio (%) is a ratio of sales profit to general expenses. In general, the profitability characterizes the production efficiency. The analysis of service profitability allows to estimate the necessity of providing the services or carrying out works. There are no normative values for this group of ratios due to wide rage depending on the industry.

The calculation of practical values of financial indicators, which 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, taking into account the actual situation of the economy as a whole and the industries. The practical value of service profitability ratio for the air transport service companies in 2016 starts from 26,28%.

For the most full and fair opinion about the company’s financial position, the whole set of financial indicators and ratios of the company should be taken into account.

In 2016 the average value of service profitability ratio in TOP-10 group of companies is higher than practical and industry average values. In 2016 four companies from TOP-10 list have values higher than practical value, five companies have values lower than practical value and one company (LLC DOMODEDOVO INTERNATIONAL AIRPORT) – has negative value of the ratio (green, orange and red color in column 6 and 7 of Table 1 and Picture 1 respectively).

Picture 1. Service profitability ratio and revenue of the largest Russian air transport service companies (TOP-10)

For the last 10 years, the average values of service profitability ratio were lower than practical values (Picture 2). This may be a sign of unfavorable trends in the industry.

Picture 2. The change of service profitability ratio average values within 2007-2016 for the Russian air transport service companies

Nine companies from TOP-10 list have the upper levels of solvency index Globas, this fact shows the ability of the companies to meet their obligations in time and fully.

LLC DOMODEDOVO INTERNATIONAL AIRPORT has low level of solvency index Globas due to participation as a defendant in debt collection arbitration proceedings, unclosed enforcement lists and losses in balance figures. The forecast for index development is stable.  

The companies with the highest volume of revenue (TOP-10) were selected for this ranking, according to the data from the Statistical Register for the latest available period (for 2016 and 2015). Then they were ranked by current assets to equity ratio (Table 1). The analysis was based on the data from the Information and Analytical system Globas.

Current assets to equity ratio (х) characterizes company’s ability to maintain the level of own working capital and to finance current assets with own sources. The ratio is calculated as the relation of own current assets of a company to total value of equity. The recommended value is from 0,2 to 0,5.

Decrease in the ratio shows slowdown in payment of receivables or tightening of conditions for granting trade credit from contractors. The increase demonstrates the growing opportunity to pay off current liabilities.

The specialists of the Information agency Credinform, taking into account the actual situation in the economy in general as well as in industries, have developed and implemented in the Information and Analytical system Globas the calculation of practical values of financial ratios, which may be considered as normal for a specific industry. For air transport companies the practical value of the current assets to equity ratio in 2016 ranges from 0,45 to 1,00.

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.

The average value of the current assets to equity ratio for TOP-10 companies is within the recommended value and higher than the industry average. None of TOP-10 companies in 2016 has indicators of the ratio within the range of recommended value, four companies – within the range of practical value and higher and six companies – lower than the limit of practical value (marked with green, orange and red colour in columns 6 and 7 of the Table 1 and at the Picture 1, correspondingly). Two companies out of TOP-10 decreased indicators of revenue, net profit or have got loss in 2016 compared to the previous period (marked with red filling in columns 3 and 5 of the Table 1).

Picture 1. Current assets to equity ratio and revenue of the largest Russian air transport companies (TOP-10)

The average industrial indicators of the current assets to equity ratio for the last 10 years were within the range of recommended or practical only in 2012-2013 (Picture 2). In general, this fact can demonstrate negative tendency in the industry.

Picture 2. Change of average industrial values of the current assets to equity ratio of the largest Russian air transport companies in 2007 – 2016

Nine companies out of TOP-10 have got high levels of solvency index Globas, that shows their ability to pay off their debts in time and fully.

UTAIR AVIATION JSC has got satisfactory solvency index Globas, because of the information about their participation as defendants in arbitration court proceedings for the last 2 years, late performance of obligations, cases of unclosed enforcement orders and loss in the structure of balance sheet ratios. Forecast of the ratio development is negative.