Khf Corporation Analysis

395 Words2 Pages
The case is about the issue faced by Jim controller of KHF Corporation. The suppliers that supplied 65% of the company’s food supplies decided to cancel the company’s trade credit accounts because they were not paid on time and the accounts were more than 60 days old. Jim worried about the CEO reaction because he was the one responsible for the firm’s financial condition and performance. Horne, the CEO of KHF Corporation had taken the firm from being small food supplier to a moderate size regional supplier for restaurants and had been responsible for the new business acquired in Nag’s Head, Kill Devil Hills, and Kitty Hawk. He hired Jim as a Controller in order to manage the operational management that he had abandoned. Horne did not accept the issue and blamed Jim. KHF’s customers varied in size from small to large restaurants. It has expanded its service area into the Outer Banks of North Carolina which had doubled the firm’s sales and increased the firm’s dependence on trade credit to accomplish growth. After facing the problem, the CEO tried to think about a solution because first, he couldn’t convince the suppliers to make more effort because KHF was not considered as a large supplier for them and second, the company couldn’t deal with other suppliers because KHF’s customers were very exigent and can make the difference even if the products are similar. The region of KHF’s distribution area had been broken into six segments. Edenton which had a total sale of 18%, Elizabeth City with 21% of total sales, Williamston had 8%, Kitty Hawk 22%, Kill Devil Hills 15% and Nags Head 16% of total sales. KHF’s business was seasonal because the major restaurant activity of the Outer Banks catered to summer tourism. As we can see in the Income Statement, the company’s net sales increased from 2002 to 2003, the operating expenses were higher in 2003 but the net income was

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