The Risk Profile Of Abc Company Essay - 1540 Words

I have been hired as the controller of ABC Company, and the CEO has set a target sales goal of 3 million in annual sales over the next three years. The three million dollar sales objective is more than double where the company is at in sales today. This is an aggressive strategy which needs to be examined in terms of its perceived risk factors. There are several factors that impact the success of this strategy, and those risks will be discussed here. The Risk Profile of ABC Company The first and most obvious risk is that the new product(s) will not meet the expectations of the customers. Another risk that is involved is that once the new product line is launched, local competitors may introduce it into their product line as well. A risk that also should be considered is how the new product line will impact the cost of production. New products are going to require new raw materials that are provided by suppliers. Will the same suppliers that are used with the company today be able to be utilized for the new materials or will new contracts with different suppliers be needed? The CEO wants to utilize some of the scrap resources that ABC already possesses, but it is unlikely that this amount of material will be enough to depend on solely. Current Company Cash Flow ABC Company CASH FLOW STATEMENT (Direct Method) December 31, 20X2 Received from customers $ 1,260,000 Paid to Suppliers $ (830,000) Paid for expenses $ (250,000) Paid for taxes $ -Show MoreRelatedA Report On The Abc Company1546 Words   |  7 PagesThe ABC Company is a manufacturing corporation that focuses on producing cedar roofing and siding shingles. The organization presently has per annum sales of about $1.2 million, with a 25% increase from the prior year. The company goal is to reach $ 3 million in annual sales within the next three. 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