Growth Target Of The Abc Company

Better Essays

ACC 206
Instructor: Jess Stern

Chapter 1:
Overall Risk Profile of the Company:
Overall risk profile of ABC Company based on current economic and industry issues that it may face are described below-
i. Adverse economic condition can affect the overall production condition of ABC Company. ii. If there is rise in the price in raw materials and factors of production it can affect the expansion of new products. iii. The product that will be developed will be new and other companies will take the benefit from the result experience and learning of development of new product. iv. There is risk of loss of key personnel at any time, political adverse change and potential …show more content…

Though it was the largest manufacturer in the world but at present it is in 5th position. Import is much higher than export. The country is selling asset as well as taking debts to maintain current living standard. The international competitors are planning to make the country completely dependent on foreign production. As a result US firms are going to lose domestic self-sufficiency, national security and leverage. This overall condition can be risky for ABC Company.

Chapter 2:
Current Company Cash flow:
Sources and Uses of 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 Company enjoyed a cash flow provided from operations of about $3,500 in year 19X2. The statement also shows that ABC Company used more cash in investing activities than was provided from different sources. The net cash flows from ABC Company’s business were positive, $3,000. For ABC co. cash generated from operations is the primary source of cash flow, the company used the cash flow from operating and investing activities to make payment of dividends. (See appendix)
Improvement of cash flow:
To improvethe cash flows further, ABC Company can invest more in other firms’ securities like common stocks or debts to earn more cash proceeds in return. More common stocks can also be issued to collect funds to invest in more profitable sectors or to

Get Access
Get Access