Working Capital Management in the Russian Federation Food Industry: A Tool Supporting Its Anti-Crisis Policy
The article has examined the Russian Federation (RF) food industry, viewing working capital management (WCM) as a tool supporting its anti-crisis policy. Russia developed the policy, the critique relates, following an empirical study conducted on the relationship of key indicators (net income and profitability) to the business activities of food entities. The study was implemented after the 2008–2009 financial crisis that forced RF entities to look for alternative ways of financing their business-tied operations (such as reducing the financial cycle, cutting the existing stockpiles, and improving the payment terms to suppliers). The paper suggests that by transforming WCM components, Russian food firms would raise their profitability and significantly enhance their market posture. Subsequently, the commentary refocuses on the study, explaining that it had included four hypotheses covering 1,065 Russian-owned food companies. The latter, the review states, had been in business for at least a decade, and had submitted a 'nonzero statement' for the 2004–2010 timeframe. The essay notes that the selected WCM analytical approach was not the food industry's preferred mechanism for dealing with the anti-crisis policy. The blueprint, in conclusion, opines that the RF food sector's WCM strategy should not affect the financial cycle. The strategy should, the document observes, use paid sources of funding pending the development and approval of a “leverage effect”, and the authorization of contract-specified payments that would fulfill the already enacted Russian standards.