Current Position Case on Diversico Management & Consulting   Term Paper ID:33902 Click to get this paper

Essay Subject: The object of this paper is to discuss the advisability of employing someone for the position of Accounts Manager.... More...

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Paper Abstract: The object of this paper is to discuss the advisability of employing someone for the position of Accounts Manager. The stated objective for this case is to justify the capacity of theCompany to fund the salary for the new Accounts Manager position throughmore effective use of the Company's current assets. Paper Introduction: diversico management CONSULTING inc A proposal has been made at Diversico Management Consulting Inc toemploy a person for the new position of Accounts Manager The annualsalary cost for the Accounts Manager position is projected to be Before a person can be employed for the position of Accounts Manager theCompany president has demands that the Accounting Department at DiversicoManagement Consulting Inc provide evidence that the Company can affordto pay an additional per year in salary for the new position The stated objective for Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. 2 4 ||Balance Sheet Item |Current Assets |Current |Net Effect on || | |Liabilities |Working Capital ||Total Current Assets &|$116,822 |$34, 27 |$82,795 ||Liabilities | | | ||Accounts |-$ 6,1 5 |-$ 5,875 |-$ 23 ||Receivable/Accounts | | | ||Payable | | | ||Prepaid |-$ 9, |-$ 4,5 1 |-$ 4,499 ||Expenses/Accrued | | | ||Expenses | | | ||Other |-$ 8,7 6 |-$11, 51 |$ 2,345 ||Receivables/Other | | | ||Payables | | | ||Other Current |-$ 25 |-$12,6 |12,35 ||Assets/Other Current | | | ||Liabilities | | | ||Inventory |-$24, 56 | |-$24, 56 ||Net Working Capital |$68,7 5 |$ |$ 68,7 5 | As the data presented in Chart 2 indicate, $68,7 5 of the Company'snet working capital is available to fund the salary for the new position ofAccounts Manager without compromising the Company's short-term liquidity.The $68,7 5 is accounted for by $65, cash-on-hand plus $3,7 5 pettycash. Further, a continuationof the Company's 2 4 performance would generate a further increase in networking capital. The short-term (current) liquidity position of the Company issummarized in Chart 1. provide evidence that the Company can affordto pay an additional $58, per year in salary for the new position. The annualsalary cost for the Accounts Manager position is projected to be $58, .Before a person can be employed for the position of Accounts Manager, theCompany president has demands that the Accounting Department at DiversicoManagement & Consulting Inc. Committing$58, to fund the salary of a new Accounts Manager would reduce NetWorking Capital to $24,795, an acceptable level. diversico management & CONSULTING inc. Net working capital atthe close of fiscal year 2 4 was $82,795 (refer to Chart 1). The chart may be found below on this page.|Chart 1 - Summary of Short-Term liquidity position: diversico management &||consulting inc. Within the current asset and current liability accounts,there are offsets that negate the need for new cash. The stated objective for this case is to justify the capacity of theCompany to fund the salary for the new Accounts Manager position throughmore effective use of the Company's current assets. Importantly, however, thedecision on employing a person as an Accounts Manager at an annual salaryof $58, also must consider the effects of the annual salary on theCompany's profitability, as well as whether a firm with modest anddeclining levels of revenue has any pressing need for the position ofAccounts Manager. A proposal has been made at Diversico Management & Consulting Inc. 2 3-2 4 ||Balance Sheet Item|Fiscal-Year 2 3 |Fiscal-Year 2 4 |Year-to-Year || | | |Change ||Total Current |$43,558 |$116,822 |$73,264 ||Assets | | | ||Total Current |$65,45 |$34, 27 |-$31,423 ||Liabilities | | | ||Net Working |-$21,892 |$82,795 |$1 4,687 ||Capital | | | | As the data presented in Chart 1 indicate, the improvement in theCompany's current position in 2 4 would allow the Company to hire a personfor the position of Accounts Manager without compromising the Company'sshort-term liquidity. This objective may ormay not prove to be financially feasible. The next issue that must be assessed is the composition of theCompany's working capital considered within the context of freeing $58, to fund the salary cost of a new Accounts Manager. This assessment must be conditioned on the premisethat the Company's working capital position does not deteriorate. These offsets aresummarized in Chart 2. The chart may be found below on this page.|Chart 2 - offsets in current asset & current liability accounts: diversico||management & consulting inc. If these last two questions cannot be answeredsatisfactorily, the capacity of the Company to fund the additional salarycost through the manipulation to current assets will be irrelevant. toemploy a person for the new position of Accounts Manager. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.

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