As the Controller of ABC Company
ACC 206 Principles of Accounting II
January 21, 2013
Purpose of the Paper
This report’s purpose is to be of assistance to the CEO of ABC Company to determine if the new project should be put into action and the way that it can be within the means financially through presenting information regarding the projected costs and returns. This decision-making report is intended to aid the CEO’s in internal decisions that are made. It depicts the capability of the projects possibility of making money for the company and its intentional purpose.
An analysis of information such as a balance sheet, income statement, and financial statements must be done so that the security and financial ability of a company can be seen. Along with this presented method, this project is tact on and a complete analysis is performed to come to the conclusion in deciding what to do in regards to taking on a new project. The idea of the report is to supply logical and vital knowledge about the project.
Summary of Findings ABC Company focuses on making cedar roofing and siding shingles. There are various factors that pose a threat to the ABC Company, and to add to that the state of the economy is not at its best. It appears that the key basis of cash flow for the company was operating activities, particularly within the net income. If the company was to invest in income earnings securities, this would certainly enhance cash flow. This project is going to need extra financing. With the NPV of the investment project being in the red, the obvious choice should be that the investment not be made by the CEO. However, it could decrease the costs of production, that would indicate that the ABC Company could take a chance on the investment and be able to still accomplish the intended growth
References: Walther. (2012) Principles of Accounting II San Diego, CA; Bridgepoint Education, Inc. Retrieved from https://content.ashford.edu.