ABC company’s Risk Profile Essay
ABC company’s Risk Profile
ABC Company Risk Profile
The ABC company is a manufacturing firm that specializes in making cedar roofing and siding shingles, with recent sales at $1.2 million, the company wants to reach the $3 million mark over the next 3 years. As a newly hired Corporate Controller for this company, I have been assigned the task of developing and overlooking a new plan made by the CEO that will use some of the shingle scrap materials to build cedar houses. The newly develop plan will certainly bring new challenges for the company on the form of increased cost and labor; However it will also provide additional revenue and gross profit to help reach the growth targets. On this paper I would go over the details of the report made for the CEO that includes information on the overall risk profile based on actual market conditions, a current company cash flow, the product cost and any potential investments that might accelerate profits.
The Risk profile for this company includes several different factors that are mostly due to current market conditions, and the level of risk the company will face by adding extra inventory and expenses. Unfortunately risk is a reality of doing business, whether the company is large or small, public or private, risk will always be present since nothing on the business world warrants a guarantee. Some of the key risk points are: Inventory represents a big portion of the cash flow, therefore having extra inventory on hand will have an impact on the company’s future cash flow; payroll is also directly related to the cash flow since it takes a big portion of the monthly budget, therefore increasing the manufacturing capabilities of the factory as well as adding a new line of production will increase the payroll thus having an impact on cash flow reports; Economic downturn, that might affect prices of inventory to be purchased, therefore affecting the potential growth as well as having an impact on reaching forecasted company goals.