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ACC 206 ABC company(CEDAR roofing)report

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ACC 206 ABC company(cedar) report
Problem
You’ve just been hired onto ABC Company as the corporate controller. ABC Company
is a manufacturing firm that specializes in making cedar roofing and siding
shingles. The company currently has annual sales of around $1.2 million, a 25%
increase from the previous year. The company has an aggressive growth target of
reaching $3 million annual sales within the next 3 years. The CEO has been
trying to find additional products that can leverage the current ABC employee
skillset as well as the manufacturing facilities. ………………………..
ABC Company, the manufacturing firm specializes in making cedar roofing and siding shingles.
The company is currently producing 80000 units of its current product and trying to find
additional products that will lever the current employees’ skill and the manufacturing facilities
existing in the firm. Currently it has annual sales around 1.2 million dollar and is targeting to
reach 3 million dollar sales within the next three years. As the controller of this company I see
the CEO is working on a new opportunity to produce cedar dollhouses by using some of the
shingle scarp materials. The new production will require additional raw materials and machine
hours and will provide leverage and additional revenue and gross profit
Overall Risk Profile
Current economic and industry issues facing ABC Company: Numerous risks can
arise from the economic and industry issues in any country. A manufacturing company, like
ABC Co., can get hurt by many economic and industry risk factors. Those factors may be:
The rise in the raw materials price needed to expand new projects
More time intensive new product can lead to the lapsing of the deadlines for construction
The production process for the new product may be disrupted by adverse economic
movement

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Many existing or new competitors may take the competitive advantage from learning and
experiencing the ABC’s lesson
Potential loss of key personnel, dramatic change in the political regime and also the
occurrence of a heavy natural disaster can threat the company severely
According to the recent available information the US is facing economic disaster. The production
of new and existing sustainable products is not enough in US. The country is importing much
more than exporting and also engaged in selling off assets and taking on massive debts to sustain
standard of living. The international competitors are planning to render our country to be
completely dependent on foreign production. As a consequence US firms will lose domestic self-
sufficiency, national security and leverage. The US manufacturers are encouraged to design,
engineer and produce in the third world markets like Mexico and China.
Current Company Cash Flow
Sources and uses of the company’s Cash Flows: The calculation of ABC co.’s Cash
Flow statement involves cash receipts and cash payments in three categories as, operating,
investing, and financing activities. This calculation tells that the ABC co. enjoyed a cash flow
provided from operations of about $27,000 in year 19X2, when reported income after tax was
$12,000. The statement also shows that ABC co.