Running head: ABC COMPANY FINANCIAL ANALYSIS
ABC Company Financial Analysis
Course Name and Number
ABC COMPANY FINANCIAL ANALYSIS
The purpose of this paper is to analyze and evaluate ABC’s potential to take up a new
project with its current financial position and determine its performance and sustainability.
Different organizations incorporate various factors affecting a business environment to
achieve their objective. The CEO of ABC company has come up with a new business project,
and he wants to know if this new project is affordable and what are the returns should the
company invest in it. ABC Company is a manufacturing company specializing in the making
of cedar roofing and siding shingles. The current annual sales stand at $1.2 million being a
growth of 25% from the previous year. The target of the company is to make $3million sales
in the next three years. The CEO’s new project is to make cedar dollhouses from shingle
scrap materials using the available company’s resources. The company will incur more
expenses for labor and costs, but there is a possibility of it generating more revenue and
additional profit. Therefore, as the appointed corporate controller, I will analyze the risks and
determine whether this new project is suitable for the company.
The risk profile is the analysis and evaluation of threats facing a project or an
organization and the readiness of the organization to take risks. Companies use risk profile to
identify the potential threats that they may come across when investing (Alhawari et al.
2012). The financial position of the company is determined through analysis of its financial
statement, that is, the income statement, balance sheets among others. The financial statement
is the key indicators of a company’s...