Write a 350- to 700-word memo to the CEO
of your selected organization in which you discuss your findings from your
ratio calculations and your horizontal and vertical analysis. In your memo,
address the following questions:
What do the liquidity,
profitability, and solvency ratios reveal about the financial position of
the company?
Which users may be interested
in each type of ratio?
What does the collected data
reveal about the performance and position of the company?
Formatyour memo consistent with APA
guidelines.
Overview of
chosen organization
Riordan Manufacturing has three
operating entities…Georgia, Michigan and California…plus a joint venture in the
People’s Republic of China. Basically, the operating entities each have their
own Finance & Accounting Systems and they provide input that is
consolidated at Corporate…San Jose. The basic components of each system are as
follows:
General Ledger
Accounts Payable
Accounts Receivable
Order Entry
Procurement
Sales and Purchasing History
Invoicing and Shipping
Payroll
Financial Reporting
EDI*
Bar Code Reading*
EDSS (Executive Decision
Support System)*
*San Jose Only
Background:
During the due diligence process in
which Riordan acquired the operating entities in Michigan and Georgia the
matter of F & A System’s compatibility was not addressed.
Current
Situation Regarding F & A Systems:
San Jose has a license for a
fully integrated Windows based ERP manufacturing, distribution and
financial management software application specifically designed for
plastics processors and process and assembly manufacturers. The license
does not include application source code.
Michigan had purchased a vendor
developed software application and the attendant source code for their Fd
& A and process application. The vendor is no longer in business. The
application runs on a pair of DEC Alpha’s, using the VMS operating system,
VAX4000 work stations and programmed in C.
Georgia had purchased a vendor
(different from Michigan) developed software application and the attendant
source code for their F & A and manufacturing process applications.
The systems run on a pair of AS400’s, using UNIX operating system, use
PC’s (Windows) as workstations, and is programmed in RPG400.
