THE EVOLUTION OF TURNOVER OF LISTED FIRMS IN THE ...

Annals of the „Constantin Brâncuşi” University of Târgu Jiu, Economy Series, Issue 1/2019

„ACADEMICA BRÂNCUŞI” PUBLISHER, ISSN 2344 – 3685/ISSN-L 1844 - 7007

THE EVOLUTION OF TURNOVER OF LISTED FIRMS IN THE

EXTRACTIVE INDUSTRY DURING THE PERIOD 2015-2018

ECOBICI MIHAELA LOREDANA

PHD LECTURER, ”CONSTANTIN BRÂNCUȘI” UNIVERSITY, FACULTY OF ECONOMICS

e-mail:[email protected]

Abstract The main objective of any economic agent is to obtain profit, and in order to achieve it economic agents must

apply an efficient management that combines in the most logical way the material, human and financial resources.

Alongside this primary goal, another goal is to maximize turnover.

Turnover is one of the most important indicators to reflect the company's position on the market and the

company's ability to deploy profitable businesses in its field of activity.

The purpose and importance of turnover in a dynamic approach is one of the most common concerns of

economic and financial practitioners, with turnover being the indicator of global appreciation of a company's business.

The purpose of this article is to track down the evolution of the turnover of mining companies by analyzing the

data series offered by the Bucharest Stock Exchange. In this respect, the research carried out and the results obtained

will provide an overview of the turnover status in the period 2015-2018. The evolution that will be engaged in research

will show whether or not turnover has registered an upward trend, a trend that should indicate a good development of

the activity that these companies carry out.

Keywords: turnover, dynamic analysis, evolution, turnover index, growth rate of turnover, extractive industry

JEL Classification: D22

1.Introduction

The study of turnover over a longer period of time provides information about the business activity of

the enterprise and its tendency by classifying it or its object in one of the life cycle phases: launch, growth,

maturity, decline. In order to be relevant in establishing the enterprise development strategy, the dynamics of

the analyzed company must be compared with the market dynamics, respectively the sector of activity or

competition considered representative. If the sector is more dynamic than the society, it will be noticed that

the firm under study will lose market share, either as a result of the increase in sales volume of existing

competition or as a result of the emergence of new competitors, or as a result of the interaction of the two

causes. [3]

Getting a bigger business score is the goal of any business, increasing the turnover, boosting the

company's market position and subsequently increasing profitability.

Several definitions in the literature provide this indicator with an important role in increasing the

economic and financial performance of the firm:

”turnover represents the total income obtained from the commercial activity of an enterprise over a

certain period of time.”, Bușe Lucian, Analiză economico-financiară, Ed. Economică, București, 2005, page

143;

”turnover represents the total revenue earned by an enterprise in current business activities. It is one

of the most important indicators of measuring the company's economic performance.”, Hristea Ana Maria,

Analiza economică și financiară a activității întreprinderii, Ed. Economică, București, 2015, page 24;

”turnover represents the total revenue earned by the firm in current business activities and is one of

the most important indicators and shows the company's economic performance” Popescu Dan Dumitru,

Entreprise analysis, Ed. Ase, București, 2009, page 40.

From the specialized research literature as well as from the field researches it can be seen that the

turnover analysis is one of the most approached and debated topics. The connection between the topic and

105



the work in the field can be highlighted by the inspirational works that will constitute the base in the

elaboration of this article, such as: Economic and Financial Analysis - Buşe Lucian, Economic and Financial

Analysis of the Business Activity - Hristea Ana Maria, Entreprise analysis - Popescu Dan Dumitru and many

others.

The main objectives of this study are:

-identifying the turnover trend of the mining companies based on the data provided by the Bucharest

Stock Exchange;

-calculating and analyzing the evolution of the turnover index and its index of growth in the period

2015-2017.

2.Turnover dynamics

Any enterprise, irrespective of its size and the work it performs, must permanently demonstrate its

viability and ability to compete and adapt to the economic and financial environment.

The economy of any country manifests itself through all the economic, technological and socio-

economic activities. The manifestation of economic activities is based on certain types of activities, which

are complementary to the production of various economic goods or constitute elements of the chain of

certain types of activities involved in the production of certain types of products. [5]

The development of any company's business activity is primarily reflected in the achievement of a

turnover, the level of which will determine the firm's position on the market, its chances to expand. An

increasing turnover trend will always be a sign of growth, of consolidation of the market position.

Some factors, both internal and external, may occur in the evolution of turnover. The internal factors

include the financial, material and human potential of the firm, the degree of knowledge of the client

segment to which it is addressed, the management of sales and distribution chain of products, the quality of

products offered by the market. External factors include: competitors encountered by the company, demand

from the market segment competing with the company, socio-professional, legal and legislative changes.

The dynamics of the turnover is followed by the evolution of the company's business in order for the

company's management to take the best decisions to increase the economic and financial performances.

Therefore, in this type of analysis, the absolute percentage change, including the annual growth rate, is used.

The following formulae can be used to reflect these aspects:

1 0CA CA CA (1)

1

0

CAICA 100

CA

(2)

RCA ICA 100 (3)

where:

CA- turnover; 0 – the previous period; 1 – the current period.

Depending on the growth and the sign of these changes, it is possible to assess the increase or

decrease of the company's turnover in the period analysed. [1]

3.Materials and methods The article is based on a theoretical, conceptual and empirical research that will conclude in an

interpretation of the analyzed data, namely: drawing conclusions, understanding the evolution of the

phenomenon, establishing forecasts, etc. The main method used in conducting this study is a qualitative

analysis method, namely the comparison method.

This method plays an important role in the analysis process because each result of the enterprise's

activity is studied not only in terms of its own size but also in relation to a certain criterion taken as a basis

of comparison which allows knowledge of the deviations occurring in time and space.[6]

The sources and materials used are based on a series of primary information (magazine articles,

situations, reports) as well as a number of secondary sources. The research area is the mining companies

listed on the Bucharest Stock Exchange.

106



4. Research, investigation and results

4.1.Evolution of in the turnover of companies in the extractive industry

The Romanian industry sector is one of the pillars of support for one of the main strategic objectives

of Romania in the European context, namely reaching a level of economic development at European

standard. Alongside all the other industrial sectors and mining industry, it is one of the main pillars

supporting Romania's economic development. Thus, turnover is one of the indicators reflecting the evolution

of the activity of the mining companies.

The data necessary for analyzing the evolution of turnover in the period 2015-2017 are presented in

the table below:

Table no.1 The turnover of the companies in the manufacturing industry No.

crt.

Company name

2015 2016 2017 Deviation Deviation

2016/2015 2017/2016

1. SC COMREP SA

PLOIESTI

33.481.219

33.687.772

22.178.104

+206.553 -11.509.668

2. SC DAFORA SA 87.078.619 48.952.327 74.811.160 -38.126.292 +25.858.833

3. SC FORAJ SONDE

SA VIDELE

61.856.069

42.599.008

49.938.956

-19.257.061 +7.339.948

4. SC FORAJ SONDE

SA CRAIOVA

124.099.902

78.478.248

127.343.760

-45.621.654 +48.865.512

5. SC FORAJ SONDE

SA ERNEI

52.622.278

9.871.723

22.899.638

-42.750.555 +13.027.915

6. SC ROMPETROL

WELL SERVICES

SA

49.975.025

31.106.110

39.997.068

-18.868.915 +8.890.958

7. SC S.N.G.N.

ROMGAZ SA

4.052.683.743

3.411.867.648

4.585.189.376

-640.816.095 +1.173.321.728

8. SC OMV PETROM

SA

13.687.616.179 12.523.026.432 14.764.836.864

-1.164.589.747 +2.241.810.432

9. SC STICLOVAL

SA VALENII DE

MUNTE

3.248.001

3.131.669

2.917.003

-116.332 -214.666

Source: www.bvb.ro

107



Graphically speaking, the evolution of turnover over the past three years is as follows:

0

20000

40000

60000

80000

100000

120000

140000

Thousands

2015

SC COMREP SA PLOIESTI

SC DAFORA SA

SC FORAJ SONDE SA VIDELE

SC FORAJ SONDE SA CRAIOVA

SC FORAJ SONDE SA ERNEI

SC ROMPETROL WELL

SERVICES SA

SC S.N.G.N. ROMGAZ SA

SC OMV PETROM SA

SC STICLOVAL SA VALENII DE

MUNTE

Chart no.1

The evolution of turnover in 2015

Source: personal data processing based on www.bvb.ro

From the chart above, one can notice that in 2015 SC OMV PETROM SA is the leader in terms of

turnover, followed by SC S.N.G.N. ROMGAZ SA, and these are followed by other 6 companies with an

average turnover of 68.185.518 lei. At the end of the classification there is SC STICLOVAL SA VALENTI

DE MUNTE with a turnover of 3.248.001 lei.

0

20000

40000

60000

80000

100000

120000

140000

Thousands

2016


SC DAFORA SA




SC ROMPETROL WELL

SERVICES SA


SC OMV PETROM SA


MUNTE

Chart no.1



108

http://www.bvb.ro/



In 2016, SC OMV PETROM SA is still a leader with a turnover of 12.523.026.432, but with a

decrease of 1.164.589.747 lei. Just as in 2015, OMV PETROM is also followed by SC S.N.G.N. ROMGAZ

SA, followed by other 6 companies with an average turnover of 40.782.531 lei. At the end of the ranking

there is also SC STICLOVAL SA VALENTI DE MUNTE with a turnover of 3.131.669 lei.

0

20000

40000

60000

80000

100000

120000

140000

Thousands

2017


SC DAFORA SA




SC ROMPETROL WELL

SERVICES SA


SC OMV PETROM SA


MUNTE

Chart no.1



In 2017, the same positions were held, namely SC OMV PETROM SA in top position, followed by

SC S.N.G.N. ROMGAZ SA. With turnover under their level, there are other 6 companies with an average

turnover of 56,194,781 lei. At the end of the classificaton there is SC STICLOVAL SA VALENII DE

MUNTE with a turnover of 2,917,003 lei, turnover which has decreased as compared to 2015, 2016.

The evaluation of the size of the activity of the 9 listed companies in the extractive industry based on

the turnover dynamics indicators is presented in the table below:

Table no.2 Indicators of dynamic of turn over No.

crt.

Company name 2015 2016 2017 Turnover index Growth rate of

turnover

2016/

2015

2017/

2016

2016/

2015

2017/

2016

1. SC COMREP SA

PLOIESTI

33481219

33687772

22178104

100,62 65,83 +0,62 -34,17

2. SC DAFORA SA 87078619 48952327 74811160 56,22 152,82 -43,78 +52,82

3. SC FORAJ

SONDE SA

VIDELE

61856069

42599008

49938956

68,87 117,23 -31,13 +17,23

4. SC FORAJ

SONDE SA

CRAIOVA

124099902

78478248

127343760

63,24 162,26 -36,13 +62,26

5. SC FORAJ

SONDE SA

52622278

9871723

22899638

18,76 231,97 -81,24 +131,97

109



ERNEI

6. SC ROMPETROL

WELL

SERVICES SA

49975025

31106110

39997068

62,24 128,58 -37,76 +28,58

7. SC S.N.G.N.

ROMGAZ SA

4052683743

3411867648

4585189376

84,19 134,39 -15,81 +34,39

8. SC OMV

PETROM SA

13687616179 12523026432 14764836864

91,49 117,90 -8,51 +17,90

9. SC STICLOVAL

SA VALENII DE

MUNTE

3248001

3131669

2917003

96,42 93,15 -3,58 -6,85


Graphically speaking, the evolution of the two dynamic indicators is as follows:

0

50

100

150

200

250

Company 1

Company 2

Company 3

Company 4

Company 5

Company 6

Company 7

Company 8

Company 9

Turnover index 2016/2015

Turnover index 2017/2016

Chart no.4

Evolution of turnover index in 2016/2015, 2017/2016


The chart indicates that the turnover index has registered an increasing trend for SC COMREP SA

PLOIESTI and SC STICLOVAL SA VALENII DE MUNTE in 2016 compared to 2015, and in 2017 as

compared to 2016 there is a decreasing trend for SC FORAJ SONDE SA ERNEI, SC FORAJ SONDE SA

CRAIOVA, SC DAFORA SA, SC SNGN ROMGAZ SA, ROMPETROL WELL SERVICES SA, SC OMV

PETROM SA.

-100

-50

0

50

100

150

Company 1

Company 2

Company 3

Company 4

Company

5

Company 6

Company 7

Company 8

Company 9

Growth rate of turnover

2016/2015

Growth rate of turnover

2017/2016

Chart no.4

Evolution of turnover growth in 2016/2015, 2017/2016


110



The indicator "growth rate of turnover" is an indicator that has both positive and negative values. In

2016 as compared to 2015, the increase was recorded for SC COMREP SA PLOIESTI, w fhile or all other

companies the value of the indicator was negative. In 2017 compared to 2016 negative values were

registered for SC COMREP SA PLOIESTI and SC STICLOVAL SA VALENII DE MUNTE, all for the

other companies values have been positive.

3.Conclusions

The profit and loss account is the financial statement that reflects the value of turnover and the value

of other indicators, such as operating result, financial result, gross profit, etc. From this accounting

document we can draw conclusions regarding the structure and evolution of turnover related to the analyzed

period of time.

Turnover must always be reported to the strategic position of the firm in the economic sector in which

it operates. A company with a favorable turnover trend and a strong strategic position is, as a rule, a

profitable company, meanwhile a constant or declining company will end up in a risk situation with poor or

even no performance. Thus, in order to develop an efficient market strategy, the turnover dynamics will

always have to be based on the forecasts of the economic and financial indicators.

The conclusions derived from the above research express the state of turnover and the evolution of

this indicator as reported to the selection of companies in the period 2015-2016. Therefore, with respect to

the evolution of turnover in the case of the 9 companies listed on the stock market of mining transactions,

the highest level both in 2015, as well as in 2016 and 2017 still goes to SC OMV PETROM SA, followed by

SC S.N.G.N. ROMGAZ SA, the two representing 22,22% from the selection of 6 companies (66,66%) at a

value of 55.054.276 lei. The weakest turnover has been registered by SC STICLOVAL SA VALENII DE

MUNTE both in 2015, as well as in 2016 and in 2017.

4. Bibliography

[1] Bușe Lucian, Analiză economico-financiară, Ed. Economică, București, 2005;

[2] Gheorghe Ana, Profitul, Ed. Economică, București, 1998;

[3] Hristea Ana Maria, Analiza economică și financiară a activității întreprinderii, Ed. Economică,

București, 2015;

[4] Popescu Dan Dumitru, Entreprise analysis, Ed. Ase, București, 2009;

[5]*** https://utm.md/meridian/2010/MI_3_2010/10_Articol_Duhlicher_A.pdf [6]***https://sjse-ct.spiruharet.ro/images/secretariat/secsjse-

ct/biblioteca_virtuala_management/sinteze_si_intrebari_orientative/2014-

2015/an_2_man_2014_2015/sem_1/06b_analiza_economico_financiara/CURS_ANALIZA_ECONOMICO-

FINANCIARA.pdf

111

https://utm.md/meridian/2010/MI_3_2010/10_Articol_Duhlicher_A.pdf

THE EVOLUTION OF TURNOVER OF LISTED FIRMS IN THE ...

Documents

Transcript of THE EVOLUTION OF TURNOVER OF LISTED FIRMS IN THE ...