Deutsche Brauerei Budget

2001 Budget Approval The proposed 2001 Deutsche Brauerei financial budget creates several questions that ind surfaceing be addressed prior to approval. The gilds late(a) financial policy has been to rely on short- full term marge loans in effect to fund operations and magnification plot maintaining a consistent, high dividend yield. The use of short-term debt to fuel the company requires a higher interest rate as well as carries a higher burden of risk than long-run loans that hire in a set rate for an blanket(a) extent of time. Accordingly, in order to fund necessary equipment expansion and the proposed construct of w arhouses in the Ukraine Deutsche Brauerei should attempt to secure long-lived terms of refund from their creditor bankers to replace much of the short term debt currently on the financial acresments. The proposed budget withal projects an take over in Ukrainian sales of 45% in 2001 (Exhibits 1 & 2). The plug-in must be cautiously rosy ab reveal U krainian offshoot, particularly until the investment in state of the art w behouses and other equipment that has been project for 2002. According to Oleg Pinchuk these scheduled upgrades are necessary to sustain offset in the country.

It is our opinion that this growth figure is overly optimistic for the year 2001 given the inadequacy of equipment in place, instability of the Ukrainian government and marketplace, and the fragmented beer dissemination industry, which invites external competition. The 2001 proposed budget also has a giving append in allowance for suspicious accounts that requires close examination by the Board of Directors. The majority of this increase can be con tributed outright to credit sales in the Uk! raine. Oleg Pinchuk has created a more permissive credit system out of necessity in order to get business from the Ukraine distributors who are not financially viable. The Board must take modified concern with a large increase in project unpaid accounts receivable and unstable debt allowance. Furthermore, the extended...If you want to get a full essay, order it on our website: OrderEssay.net

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