Finance for International Business

Finance for International
Business

Table of Contents
INTRODUCTION...........................................................................................................................3
Background..................................................................................................................................3
Aim/ objective of report...............................................................................................................3
Current wholesome organic food financial position....................................................................3
Methodology................................................................................................................................5
Discussion of results..................................................................................................................10
Discussion of currency risk.......................................................................................................10
Discussion Alternative Financing..............................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Through order to develop a business worldwide, it is necessary for the company to concise
way the business ventures accessible as well as the advantages they will bring to the company
(Kengatharan and Clamenthu, 2017). The most frequent strategy to set up a business would be to
start one on its own or to buy another firm that may help you expand into new markets. To do
just that, investment evaluation methodologies are primarily used to determine the venture
legislation's financial profitability and financial position.
Background
The instance study's premise has been that Wholesome Organic Foods (WOF), in order to
continue developing and improving the firm, must embark on a large-scale growth which might
lead in diversity. Bonita Foods SL is indeed trying to expand, which would take a large amount
of finance, and it is considering selling all of its interests to the right firm. This study evaluates
the Bonita Foods joint venture initiatives involving WOF, as well as choosing whether or not to
participate inside the venture using various planning and budgeting methodologies, as well as the
total amount WOF must spend for Bonita Foods SL.
Aim/ objective of report
The primary aims and purpose of this analysis is to identify and advise WOF on not to buy
Bonita Foods SL. In addition, the total volume this should spend for the acquisition. It discusses
the influence of currency currencies on the business and offering various funding options.
Current wholesome organic food financial position
It is necessary to understand the financial status of the WOF in store to obtain another firm.
The following is a comprehensive analysis.
2020 2019
Liquidity ratio
Current assets 1787 1438
Current liability 1063 844
Inventory 216 208
Quick Assets 1571 1230
Current ratio
Current assets / current
liabilities 1.68 1.70
Quick Ratio
(Current Assets -
Inventory) / Current 1.48 1.46

Liabilities
Profitability ratio
Net Income 646 472
Gross income 2393 2028
Sales 7844 6780
Gross profit margin Gross income/ net sales 31% 30%
Net profit ratio Net income/ Net Sales 8.24% 6.96%
Efficiency Ratios
Inventory 216 208
Trade Receivables 1176 839
Cost of Sales 5451 4752
Sales 7844 6780
Inventory turnover ratio Sales / Inventory 36.31 32.60
Account receivable
turnover ratio
Sales / Accounts
Receivable 6.67 8.08
Solvency ratio
Debt 500 500
Equity 1200 1200
Debt equity ratio Debt/ Equity 0.42 0.42
Interpretation:
Ratio of liquidity
The industry average is favourable, indicating that it has adequate current assets to fulfil its
current commitments. Furthermore, the quick ratio remains favourable, indicating that the
corporation has spent less in their inventories. As just a consequence, the firm's cash situation is
healthy, and the purchase is unlikely to losses that respective company.
Ratio of profitability
Both for periods, the corporation's gross margin is about 30%, indicating that it accounts
for 30% of sales revenue. It signifies that perhaps the value of items offered is made up of the
highest number. Furthermore, the profitability ratio is low, suggesting that the organisation is
spending a lot of money. However, the tendency has risen in similar to the traditional year,