Controller Suggestions for ABC Company Math Problem

Controller Suggestions for ABC Comp whatever - Math Problem ExampleThere be numerous lawsuits that are filed against companies dealing with building materials as a result of faulty products, which lead to mold buildings. The company risks paying huge fines if it is acc give of selling products of this nature and fails to win the case. i. What does this statement of cash range tell you about the sources and uses of the company? The cash flow statement above shows that the company largely relies on the operating activities for backing, and most of its expenditure goes to the operating activities. Surprisingly, the company appears to have kept away from alternative investments, which could differently offer a reprieve to the cash flow challenges the company is experiencing. ii. Is there anything ABC Company jackpot do to improve the cash flow? The ABC Company has many alternatives that whoremonger be used to improve its cash flow. The current cash situation is very bad especially because the company has focus on its operating activities to generate cash at the expense of alternative sources of cash. Ideally, the company can use borrowed cash to finance in new and profitable ventures. Currently, there is no take the stand of the company repaying any loan interest and hence opting for a loan will balance the companys cracking structure. The company should also ensure that the cash that is borrowed is used to finance operations that will boost the gross revenue by a big margin, so that the cash inflow from operations can be boosted. iii. brush off this honk be financed with current cash flow from the company? Why or why not? This project cannot get financing from the current cash flow from the company because it is not adequate. For instance, the current divisions cash flow statement revealed only $5,000 was left as the net balance. The anticipated project needs fiance to be sourced from outside, for example by borrowing from a bank or takings new share s among other sources (Leary and Roberts 2575). iv. If the company needs additional financing beyond what the ABC Company can provide internally (either now or sometime throughout the life of the project), how would you suggest the company fetch the additional financing, equity or corporate debt, and why? The company should obtain corporate debt since it is the best alternative to finance this particular project. Ideally, this is the best option as opposed to equity because there is some usher that the company has already invested in equity because of the dividends being paid to the shareholders, yet there is no evidence of debt finance. Perhaps, to realize the maximum from the invested capital, the company should strike a good balance between equity and debt. Furthermore, obtaining financing by issuing more equity shares will water down the shareholders stake and this could not be in the interest the shareholders. Therefore, it would be advisable for the company to obtain corpor ate debt so long as the benefits that will be realized from such financing will outweigh the interest paid for the debt (Leary and Roberts 2575). III. reaping cost a. What is the product cost for the expansion product? Expansion Product (estimate) Selling Price ? Units produced and pass judgment to be sold 5,000 Machine Hours 5,000 Direct Materials 28,000 Direct labor dollars