January 23, 2012
To:Mark (Sales Manager)
Cc: Jennica Moore
From:Beth (Staff Accountant: Learning Team D)
Date:January 23, 2012
Subject:Review of JJJ’s Financials
Good morning Mark. As part of the accounting team representatives hired to review JJJ Company’s financials, I wanted to update you as to our findings during our investigation. There are many factors to consider when acquiring an established business such as their sales figures, the staff that we will be acquiring, and their financial records. As you well know that John and I have been responsible for reviewing JJJ Company’s financial records, and have been fully engaged in completing our due diligence in this investigation. After carefully taking into consideration every part of this acquisition, and reviewing JJJ’s financials we are not going to acquiring JJJ Company because of the ending results of our findings. Even with potential future sales, the company would still need to ensure that the sales would cover their expenses. There were no realistic expectations of recouping the money spent with greater sales and profitability for Riordan. As the facts compiled, the results were that the sales numbers were not enough to cover expenditures, thus proving financial instability of JJJ Company. Although JJJ Company has many contacts that could obviously strengthen Riordan Manufacturing’s portfolio, they have no reserves left to sustain the business any longer. They have proven themselves to be financial unstable and unable to withstand going forward with the acquisition. The acquisition would be a bigger risk rather than an asset. I am sure there are other ways we can work together to grow this company without putting the company at such great risk. If you want to meet and review the financial statement, I propose that you please...