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•Motivate managers through rewards to attract new customers. This will increase AR and current assets.

•Motivate managers to sell more by introducing new reward system. This will also lead to AR increase and as a result to current assets grow. The same could be used for overdue receivables amount decreasing.

•Adopt strong penalties for payments delay beyond contract assignment. According to the trade law, this must be illegal. Nevertheless, some clients tend to delay payments for a long time, much longer than it is accessed in contract. This will motivate clients to pay more regular.

•Introduce penalties for overdue receivables. This will motivate managers to settle with debtors to pay back according to contracts.

•Oblige debtors' though strong penalties provide invoices for returns. This will help to offset VAT faster and in full amount.

In order to achieve these steps, the company must provide this information to the employees. The employees must realize that these steps are extremely crucial and lead to financial capability which leads to bonuses and salaries increase43.

43 40.Nadyon, G., & Dyachenko, Y. (2010). Anticrisis Management of Industrial Enterprises Staff. ТЕКА Кom. Mot. i

Energ. Roln., 10B, 56-59. Retrieved from http://www.pan-ol.lublin.pl/wydawnictwa/TMot10b/Nadyon.pdf

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Costs Improvement strategy is achieved through internal detecting of reserves, strategic costs and profit management. It can also be achieved with the competitiveness growth44.

According to the both cost analysis (ABC and income statement) and regression analysis which was conducted, the following perspectives for cost optimization were identified:

1)Reduce manageable and partly manageable costs;

2)Reduce commercial costs;

3)Reduce production costs.

Due to trade secret, the exact elements that should be reduced in full amount will not be highlighted. However, some data should be considered:

•Change the product pack resource. It has been determined that the company has huge costs on products’ package and for that reason this suppler must be changed. Another way for problem solution may be the facilities leasing.

•Change raw materials supplier. It has been determined that production costs are much higher than the company may allow. It is a very complex part of minimizing as it must be tightly controlled in order to maintain the best quality.

•Leasing instead of facilities purchasing. It has been mentioned several times before that financial leasing will provide tax shield as it is not on the company's balance and not subject to tax.

•Outsourcing rather than staff. The outsourcing services are generally cheaper, for that reason they should be applied instead of part of staff.

44 17.Boiko, I. (2013). Instruments of Implementing the Enterprises’ Strategy. Economics & Sociology, 6(2), 73-81. doi:10.14254/2071-789X.2013/6-2/7

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•Introduction of accelerated depreciation. The company now has a straight-line depreciation.

•Telecommunication costs reduction. There were also identified the perspective and possibility for switching to another telecommunication operator to reduce these costs.

•IT consulting decrease. It was also identified that some cost items, e.g. IT sphere, must be reduced significantly.

•Courier expenses. The expenses for documentary delivery have a significant share in costs structure.

•Staff bonuses system restructures. The regularity of bonuses payments must be reduced, they must be harder to achieve.

•Staff courses decreasing. Human capital investments are undoubtedly very important. However, in terms of recession, they may be reduced for a while until the crisis is over.

However, there are also some cost elements that need to be increased now, so costs will reduce in the future. I strongly recommend FrieslandCampina to take the following steps:

•Develop EDI (Electronic Data Interchange) sphere. Due to the fact that the electronic invoices exchange is extremely popular now, lots of retailers switch to electronic documentary interchange45. In future it will definitely allow saving millions of rubles for paper and courier delivery services46.

458.Angeles, R., Nath, R., & Hendon , D. (1998). An Empirical Investigation of the Level of Electronic Data Interchange (EDI) Implementation and its Ability to Predict EDI System Success Measures and EDI Implementation Factors. International Journal of Physical Distribution & Logistics Management, 28(9/10), 773-793. doi:10.1108/09600039810248163

4615.Benjamin, R., de Long, D., & Scott Morton, M. (1990, February ). Electronic Data Interchange: How Much Competitive Advantage? Long Range Planning, 23(1), 29-40. doi:10.1016/0024-6301(90)90005-O

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•Invest in new product development. It was also proved by the regression analysis that each new product item increase revenue.

•Marketing research. The company must identify the reasons of low sales and disadvantage of outsiders’ products. By increasing marketing costs, aimed at future revenue increase through sales growth.

•Commercial media. Market research shows that the brand is well-know, although the prices for citizens are quite high. For that reason, mass media ads should convince consumers to buy.

Through liquidity ratios I provide recommendations directly by numerator and denominator analysis. The company can motivate managers through rewards to attract new customers and adopt strong penalties for payments delay. According to cost analysis commercial costs and production costs should be optimized.

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3.2 Profit and capital structure optimization

Profit optimization includes tightening of control for products profitability and operation assets value. It also implies pricing re-examination with the full use of its’ opportunities and product lines improvement.

The recommendations supposed within this step are generally based not only on financial and strategic analysis, but also on the previous anti-crisis stages. The certain actions that could be made for profit optimizations are as follows:

1)New product introduction. As was mentioned before, it was proved by the regression analysis that each new product item increases revenue by 0.27%. For example, if the company were able to reach 5 billion revenue, the contribution of new product item would be 13.5 million rubles based on regression analysis.

2)Change/improve minimum order limit. This recommendation bases both on regression and ABC/XYZ clients’ analysis. The first one proved that the fewer clients we have, the more revenue we get. The second one shows the segments which have weaknesses and drawbacks and which clients have unstable and low orders. These clients can be lost without any financial damage. Moreover, as the regression discovered, managers distract from big and medium distributors to small entrepreneurs.

3)Convince customers to buy regularly. As was mentioned earlier, on rare occasions, small entrepreneurs dislocate finished products and goods deliveries and create inventories misbalance.

4)Improve outsider products' quality/package. First of all, the company should neutralize drawbacks that lead to low item's demand and unstable orders.

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5)Stabilize outsider products' orders. Second of all, the company should stabilize orders of improved products to simplify sales forecast and especially inventories' deliveries. At this step the company would have already called not only short-term but also long-term revenue increase as they convinced buyers to purchase these items on a regular basis.

6)Increase outsider products' sales. Thirdly, through this step, the company would get straightly to net profit increase through new retails chains listing.

7)Return of missing debtors. After embargo, numerous retail chains, especially distributors, fell off. For that reason, they must be returned in order to increase sales, revenue and profit as a consequence.

8)Promote customer loyalty. High loyalty force clients purchase only one certain brand. The company has to conquer clients' in order to increase sales, revenue and profit as a consequence.

9)Depreciation switch from straight-line to accelerated.

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Capital optimization aimed at acquiring the acceptable leverage meaning, the minimization of attracted capital costs and the growth of company’s market value47.

Nowadays it is almost impossible to provide a multifunctional solution applicable to each type of companies. There are various factors that must be taken into consideration, both qualitative and quantitative48.

First of all, according to the financial capability analysis, the debt-to-equity ratio must be changed. The equity must be increased, and the liabilities dropped significantly. However, in 2014, this coefficient was within normal limits (70% of debts versus 30% of equity). In 2015, the situation was opposite and 83% of equity was confronted 17% of debts. Low share of liabilities indicates the unwilling of the company to attract additional financing. Despite the fact that low share of debts can signalize about lost opportunities in financial leverage grow, within this step, the external loans are not recommended as the company has a significant net loss49. The additional bank liabilities may lead to financial capability decrease and also threaten financial performance50.

The most popular strategy for capital structure optimization is through the financial leverage criteria51. This step supposes the return on equity increasing through the loan capital share increasing. It is the optimization of debt and equity shares52. However, due to net loss, it may significantly affect financial capability and

4736.Kundakchyan, R., & Zulfakarova, L. (2014). Current Iissues of Optimal Capital Structure Based on Forecasting Financial Performance of the Company. Life Science Journal, 11(6s), 368-371. Retrieved from http://www.lifesciencesite.com/lsj/life1106s/075_24315life1106s14_368_371.pdf

4841.Ofek, E. (1993, August ). Capital Structure and Firm Response to Poor Performance: An Empirical Analysis. Journal of Financial Economics, 34(1), 3-30. doi:10.1016/0304-405X(93)90038-D

4932.Jacobi, G. (1992). Financial Tools for Competitive Analysis. Competitive Intelligence Review , 3(2), 14-18. doi:10.1002/cir.3880030206

5051.Simon, W. (2001, August ). Asset liquidity, Capital Structure,and Secured Debt. Journal of Financial Economics, 61(2), 173–206. doi:10.1016/S0304-405X(01)00059-9

5124.Dewaelheyns, N., & Van Hulle, C. (2010). Internal Capital Markets and Capital Structure: Bank versus Internal Debt. European Financial Management, 13(3), 345-373. doi:10.1111/j.1468-036X.2008.00457.x

5231.Istaitieh, A., & Rodríguez, J. (2003, June 4). Financial Leverage Interaction with Firm's Strategic Behavior:An Empirical Analysis. EFMA Helsinki Meetings, 40. doi:10.2139/ssrn.393220

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lead to bankruptcy. For that reason, the external financing, especially bank loans, are omitted.

Nevertheless, there is other way to change this ratio. The most appropriate recommendation advocated is leasing. The company has several facilities which are taxable. There are some pros that could be explained:

1)Facilities got within leasing are non-taxable;

2)Costs for facilities servicing decrease;

3)Leasing payments are related to financial expenses and included in total costs;

4)Straight-line depreciation may be converted to accelerated;

5)Renovation of continuous facilities;

6)More realistic payments;

7)Lack of one-time significant costs.

The first strength is that tax liabilities could be changed to accounts payable. Secondly, the payments allocations are within production costs, so the company will be able to decrease profit taxable base. Thirdly, the company can have renovation of a facility as long as they want. The payments for leasing are much more realistic than for bank loan. Finally, the company does not have to pay the full value.

The following step implicates the composition of anti-crisis financial analysis through 6 mains stabilize processes: costs reduction, cash flows optimization, legal regulation, changes in debtor’s policy and commercial lending reduction, sales stimulation, accounts payable restructure.

Cost reduction. On the basis of cost and regression analysis, I strongly advise to reduce management and administration expenses as the share of manageable and partly manageable costs are 44.3%. At this segment, there is also commercial staff bonuses got into regression. Commercial costs must be decreased too. Moreover, the primary cost item that must be reduced significantly is production costs.

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Legal regulation. Retro bonuses and commercial services have a significant share in company’s expenses. Nevertheless, the regression shows the prohibition of that as it may lead to the revenue decrease. Unlucky, in 2017 the new trade law restricts the amount of retro bonuses and the maximum percentage drops from 10 to 5%. That may have a negative impact on revenue and financial performance in whole, but it is hard to evaluate the consequences now. On the other hand, the highest amount of retro bonuses reduced twice and that means the reduction of negative cash flow and the increase of revenue53.

The new trade law also made adjustments within payments delay in favor of suppliers. The payment terms changed from 10-45 to 8-40 calendar days (depends on the products’ shell life or expiry period)54.

Debtors’ policy changes and commercial lending. At this step, it is crucial to restructure receivables’ policy. First, delayed payments must be reconsidered. As FrieslandCampina’s products expiry period differ, the clients must be obliged to pay according to it but not with the maximum payment delay. The purchasers could refuse this step at first, but they are unable to be in conflict with the governmental law55.

Secondly, taking into consideration receivables analysis, the overdue receivables must be as low as possible. On order to deal with accounts recivable, the share of overdue in total receivables’ amount must be no more than 5%. Top management have to send this message to all who works with clients, especially to sales and accounting department, who are in charge of goods delivery and shipping

532.Federal Law of the Russian Federation No. 381-FZ “On the Basic Principles of State Regulation of Trading Activities in the Russian Federation”

5439.Moody's Global Credit Research. (2016). Food Retail - Russia: Cuts To Retro-Bonuses And Supplier Payment Times Will Pressure Retailers' Profitability, A Credit Negative. New York, NY: Alacra Store. Retrieved from http://www.alacrastore.com/moodys-credit-research/Food-Retail-Russia-Cuts-To-Retro-Bonuses-And-Supplier- Payment-Times-Will-Pressure-Retailers-Profitability-A-Credit-Negative-PBC_1034101

5546.Payne , K., & Foster, J. (2017, March 17). Russian Strategy: Expansion, Crisis and Conflict. Comparative Strategy, 36(1), 1-89 . doi:10.1080/01495933.2017.1277121

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documents replacement56. Accounting department should also get strong attention to income services or documents from retail chains as the delay in these payments generally causes delay for goods payment.

The amount of commercial lending should be reduced significantly. It is not a secret that some customers prefer to use commercial lending instead of taking on a bank loan. These actions are extremely non-professional and sour relations between partners. It is extremely tough for companies at recession to dictate terms because they can easily lose a client. Nevertheless, these steps must be taken so the receivables will not flow from current into overdue.

Final point that may be considered is new debtors’. If new retail chains are expected, they must be thoroughly checked for solvency and legal history.

Сash flows optimization. Cash flows optimization is a selection of the best CF organization forms in line with performance aspects. So, the improvement areas may be as follows:

1)Matching of cash flows amount. This step supposes the evaluation of cash flows according to their amount. If incomes surpass the real needs, then it is excess CF, otherwise it is scarce CF. In case of OCF, there may be several steps for increasing. For making CF excess, accounts receivable must exceed the accounts payable and it requires several steps:

•Positive OCF. First, along with debtors’ policy, the payment delay must be reconsidered significantly, and 25-expiry-date products must be separated from 40 ones for being paid earlier,

this will increase receivables turnover. Motivate clients to

56 30.Groh, M. (2014, May 31). Strategic Management in Times of Crisis. Munich Personal RePEc Archive. Retrieved from http://mpra.ub.uni-muenchen.de/57032/

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