Belco Global Foods

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Belco Global Foods Summary Kooritsa Kiev, a wholesaler in Russia, is considered a valuable customer for Belco. Half of the company’s cost of goods sold is an American goods that makes him worthy to maintain a good relationship. Also, having the ability to move from cash in advance to open account makes it trustworthy with this term, Kooritsa Kiev is one of only two customers who are working under open account comparing to the others six who is working under cash in advance in Russia. In 2008 result of the depreciation of the ruble against the dollar has caused a decrease in demand and the company has delayed to make the payments to Belco Global Food. Also, Russian GDP has declined during the time. Belco, on the other hand, is competing in a very low market margin like 2 to 4 % that makes the company cannot afford any late payment, so having not received $84,000 that Kooritsa Kiev owed and upcoming $78,000 in 15 days could be a problem. At the same time doing any unfavorably action toward Kooritsa Kiev can cost Belco more than the late payment, since Kooritsa Kiev is a wholesaler that supplied local restaurants and food markets with poultry, pork and other products. These products are the biggest portion of Belco’s core product and inquiring big orders. Problem Statement How Belco Global Food can collect its money from Kooritsa Kiev without damaging the relationship between two companies especially when the buyer’s country was on the brink of a financial crisis. Analysis Financial Analyses for Kooritsa Kiev 1- Profitability Return on Total Assets | | | Profits after Taxes / Total Assets | *Tax in 2008 in Russia: 24% | The net returns on total investment of the firm has decreased from 11.72% to 5.7% | 2007 | 21,090 \ 180,000 = 0.1172 | | 2008 | 11,219.88 \ 196,875 = 0.057 | | Notes: * Tax ratio found in

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