ALTERNATIVE ASSESSMENT OF THE ALTMAN MODEL FOR GAZPROM GROUP FOR 2016: FACTS AND HYPOTHESES
Grigoriy I. KHANIN
Doct. Sci. (Econ.), Professor, Leading Research Associate, The Russian Presidential Academy of National Economy and Public Administration (RANEPA), Siberian Institute of Management, Novosibirsk, Russia
Doct. Sci. (Econ.), Professor, Leading Research Associate, The Russian Presidential Academy of National Economy and Public Administration (RANEPA), Siberian Institute of Management, Novosibirsk, Russia
TERRA ECONOMICUS,
2018, Vol.
16
(no. 2),
The author continues to calculate the Altman model for the largest Russian companies. This time it is calculated for Gazprom Group. The calculations are made using the frameworks of the traditional model and the model for emerging markets, currently applied to Russia. The model based on the accounting statements of the Gazprom Group shows its unsatisfactory financial position. The fixed assets of the company are recalculated, showing that fixed assets are underestimated 7,01 times. The Altman coefficient, taking into account the replacement cost of fixed assets due to the traditional model, shows that the company is close to bankruptcy. A hypothesis is put forward that the company has offshore accounts which are used as a pledge for creditors. The size of these accounts is calculated. At the same time, the Group’s revenue, fixed assets and profits are specified. The Altman coefficient is calculated considering the offshore accounts and new data on revenue, fixed assets and profit. The Group’s bankruptcy is observed, although the Altman coefficient turned out to be higher than in case of calculation without considering offshore accounts. Only the Altman model for developing countries shows that Gazprom Group is in the gray zone. The impact of the tax burden on the company’s standing is analyzed. The reasons that force Russian companies to distort accounting and statistical reporting explaining the possibilities of these distortions are analyzed. Based on the earlier analysis of Altman’s model for Rosneft and Gazprom Group, the conclusion on the difficult economic situation in Russia is made which is caused by unsatisfactory economic activity and poor institutional environment. It is concluded that Altman model for developing countries is more preferable. Ways to improve the fixed assets statistics are proposed.
Keywords:
Gazprom Group; Russian economy; alternative estimates; Altman coefficient; reasons of financial statements distortion in Russia; reasons of statistical reporting distortion in Russia
References:
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Publisher:
Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606
Founder: Southern Federal University
ISSN: 2073-6606