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Loss-Making, Low-Profit Enterprises Prevail Among Belarusian Flagships

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Loss-Making, Low-Profit Enterprises Prevail Among Belarusian Flagships
ILLUSTRATIVE PHOTO

The most difficult situation has been recorded in the Mahiliou region.

The authorities have estimated the financial results of the flagship enterprises in 2021. The obtained results can hardly be regarded as positive, the website banki24.by writes.

One of the main indicators of the work of any enterprise in the real sector is the profitability of sales. Return on sales is the ratio of profit from product sales to revenue, expressed as a percentage. Typically, the higher the profitability, the greater the return on sales of the enterprise and the higher its efficiency.

Profitability makes it possible to compare enterprises of different sizes: the difference in sales volumes is leveled by the fact that it is not an absolute but a relative indicator.

The profitability can be used to judge whether the enterprise brings profit or loss. If the profitability is positive, then the business is profitable, if it is negative, it is unprofitable.

Also, profitability shows the result of a business, regardless of its debt burden. This is important in the case of assessing the possible effect of state support. If profitability is low or negative for a long time, then there is a high probability that state support will not help in any way - the enterprise does not receive enough money from product sales.

At the end of 5 months of 2021, about 25% of large and medium-sized enterprises in the real sector had losses (were unprofitable). Another 31.2% of the flagship enterprises had a profitability in the range of 0-5%. In the bulletins of government agencies, such enterprises are most often referred to as low-profit. Thus, most of the flagships had vulnerable positions in terms of business performance.

The most difficult situation was recorded in the Mahiliou region. In this region, 29.9% of flagships had losses from product sales (were unprofitable), and 39.2% showed profitability from 0% to 5%. In general, the share of unprofitable and low-profit businesses in the Mahiliou region reached 69.1%.

By the way, the Mahiliou region ranks last in the country in terms of the average salary and the penultimate one in terms of the median salary. It is clear that with such a share of unprofitable and low-profit flagships, it is difficult to be among the leaders.

In Minsk, the share of unprofitable (unprofitable) flagships was 25.3%, and the share of low-profit ones - 21.2%. The capital records the lowest share of vulnerable flagships in the economy: in all regions it is more than half, and in Minsk it is lower.

In the Brest region, the share of unprofitable and low-profit flagships was 19.4% and 31.5%, respectively, in the Vitsebsk region - 29.2% and 33.8%, in the Homel region - 22.1% and 37.9%, in the Hrodna region - 20.1% and 31.6%, in Minsk - 28.4% and 31.5%.