Introduction to rating
The idea of this Rating project is to arm the decision-makers with the basic but well-structured financial information regarding the Ukrainian business community. One day we just asked ourselves if there is an access to huge arrays of public financial data why not to analyze it in a sensible formats. As you may already know by this moment, there are groups of Ukrainian companies which have to make their statutory financial reporting public as a legislation requirement. We are far from being sure that this public financial information, despite of having been audited, can be regarded as true and fair and that it eventually complies with requirements of the National Accounting Standards (NAS). We also fully understand the limitations associated with the ratio analysis. But, at the same time, we are deeply convinced that structured analysis of significant data arrays may be a valuable instrument for decision-makers at the strategic level of management.
The concept behind our Rating comes to accumulating the selected financial data presented by Ukrainian legal entities in a database. This data gets sorted out by two first digits of CTEA (Classifier of Types of Economic Activities) of which we have 62 at the moment and by 27 geographical regions of Ukraine. The information used for analysis is taken from two main financial statements - Balance Sheet and Income Statement. The 20 ratios are then calculated for each reporting entity, for each CTEA group of entities and for the entire database. As a result, the visitors can easily analyze the trend of a single entity or particular CTEA group performance over time and make different kinds of comparative analysis. The system is quite functional from information filtering and sorting standpoint.
Basically, what we analyze is a financial position and performance of every single company, the industry it belongs to and the whole economy limited by the number of companies taking part in our Rating. By presenting you such information we do not intend to define "the best" Ukrainian business or industry. Instead, we offer you the complex analysis of different factors. The same entity, theoritically, may be rated as #1 by one factor but as #456 by another one. The idea is that there is no "the best" company in the Rating but there may be a particular one that meets criteria you are looking for. As it is mentioned above, the meaning of ratio analysis for one particular company is limited by the fact that we do not know how reliable its financial information is and what accounting policy is applied. Any material adjustment to the accounts has a significant impact on the analysis. But the ratios become much more meaningful when compared over time (trend analysis) and with the same ratios of competitors or industry average (comparative analysis).
As a main source of information for input we use another valuable internet resource www.smida.gov.ua. This resource kindly presents us the financial information of companies which make their reporting public.
On each page of the Rating you can see the total number of participating companies. If you are interested in the same information by industries or by regions this information is also disclosed. The situation with private equity companies is more complicated. It is clear that their participation in this Rating project can only be motivated by their goodwill. We would like to underline once again that there is no limitations in size or any other financial indicators to take part in the Rating. Being a small business you can demonstrate, for example, much higher rate of return on capital employed and lead this part of the Rating. Thus, we highly encourage the private equity companies to join our database (this procedure requires quick one-time authorization/registration - see Rating questions and answers for details).
It should be obvious for everybody that the more representative the database is the deeper analysis can be made. The private equity companies input their data on-line on a self-assessment basis, i.e. we do not expect any copies, faxes or signatures from you. The entire process of input will hardly take more than 15 minutes for a person with basic accounting education. Moreover, as long as your data has been entered you can compare your financial position and performance with those of your main competitors and industry average but you are still free to exclude it from the Rating by clicking just one button. Having no reason to distrust you we, however, preserve the right to ask you to support your data with the relevant documents as exceptional measure. If not done so in a reasonable time period, your data will be excluded by the site Administrator.
We are quite aware of the risks associated with such way of data input. The possible risk of information being distorted is, however, lowered by the full disclosure of data input principles. From our side, as the Rating's Administrator, we take the responsibility to do our job properly and keep the database in a reasonably accurate state. But we would really appreciate your time and efforts to inform us about any kind of mistakes, irregularities or abnormal deviations. Please ask your questions to info@alt.com.ua or make your comments on the forum. We promise that you will be heard.
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