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Analysis-Milton Manufacturing Company - Case Study Example
Author : lacey25
Finance & Accounting
Pages 5 (1255 words)
Milton Manufacturing Company
The president of the company is Irv Milton. The company’s revenues under the leadership of Milton increased by 20 times from 1999 to 2009. In 2010 the organization’s revenues decreased by 10%. The organization faces other issues that merit the immediate attention of the executive management team of the company…
Issues at Milton Manufacturing Company
Companies that face issues must identify them in order to evaluate its effects and to find solutions to resolve the problems. The managers of the company are directly responsible for the performance of the employees and the company as a whole. Resolving problems can help improve the productivity, efficiency, and profitability of a company. Milton Manufacturing Company faces three types of problems. The three types of problems present at the firm are accounting, operational, and ethical issues. The accounting department is responsible for recording, tracking, and monitoring the economic activity of a firm (McGuckin). It is of the utmost importance for accountants to comply with the generally accepted accounting principles (GAAP) and to maintain a high level of ethical conduct by the professionals that practice accounting.
The first financial problem that the company faces is that its revenues decreased by 10% in comparison with the previous year. Lower sales results hurt the bottom line of the company by lowering its profitability. Another issue with lower sales is that it can deplete the cash reserves of a firm. A second accounting issue was that the capital expenditures of the company were increasing at a rate of 26%. A third accounting issue Milton Manufacturing Company faced was a reduction in its cash flow position. ...