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 skill set as well as the manufacturing facilities. ABC Company's current financial information (before/without expansion)
Accounts receivable (net)
Property plant, & equipment
Less: Accumulated depreciation
Income taxes payable
Total liabilities & stock, equity
The firm's accrual-basis income statement revealed the following data: Sales
Cost of goods sold
selling and administrative expenses
Dividends declared and paid during 19X2
ABC purchased $100,000 of equipment for cash on August 14.
(There was no interest expense.)
I. An overall risk profile of the company based on current economic and industry issues that it may be facing.
II. Current company cash flow
a. You need to complete a cash flow statement for the company using the direct method. b. Once you’ve completed the cash flow statement, answer the following questions: 1. What does this statement of cash flow tell you about the sources and uses of the company? 2. Is there anything ABC Company can do to improve the cash flow?
3. Can this project be financed with current cash flow from the company? Why...
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