Financial Forecasting Paper: Riordan Manufacturing

Financial forecasting allows financial managers to anticipate events before they occur, particularly the necessity for raising funds externally. An important consideration is that growth whitethorn call for additional sources of financing because profit is often pathetic to cover the net buildup in receivables, inventory, and other asset accounts.

When forecasting, one and only(a) must take into account estimated future levels of receivables, inventory, payables, and other collective accounts as well as its anticipated profits and adoption requirements. From this data collecting financial managers must strategically pattern the management of their business or suffer profit passage and financial loss from investors. Shareholders pauperization their wealth to be maximized by the corporation in the future as well as the present. Poor strategic planning will result in investors driving the linage prices of a company down. When companies release their quarterly or annual forecast for profits investors use this reading as a tool to invest. Relying on the company to adjoin their projected forecast or better. When profit warnings are issued at the end of the period investors become nervous and trade their stocks to compress their risk of loss. With numerous stocks un-purchased the company loses their capital and in-turn forces the price of the stock to drop. Revenue from profits alone are not plenty to sustain a business, companies need to raise capital.



By strategically planning on how successfully to meet profit goals and maximize shareholder wealth companies will continue to grow.

Riordan Manufacturing is a world(prenominal) plastics manufacturer employing 550 people with projected annual earnings of $46 million. The company is wholly owned by Riordan Industries, a dowry 1000 enterprise with revenues in excess of $1 billion. Its products allow plastic beverage containers produced at its plant in Albany, Georgia, tailor-made plastic parts produced at its plant in Pontiac, Michigan, and plastic...

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