List 5 inherent risk related items Southwest Appliances, Inc. specializes in supplying a relatively small line of

List 5 inherent risk related items 

  
 
 

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Southwest Appliances, Inc. specializes in supplying a relatively small line of high-quality household appliances to residential construction contractors in a large and growing metropolitan area. Southwest has a large list of customers, mostly custom builders of single-faimily dwellings and some large builders of single and multiple family units. Southwest basic marketing strategy is always to have inventory available and to sell at competitive prices. At the end of every quarter, the President, Joe Navarro, reviews product costs and adjusts the authorized selling prices of products as necessary. These adjustments are based on Mr Navarro's assessment of what the competition will do as well as what is required to provide competitive profits to the owners. The US wholesale appliance industry has been tracking with the general economy and has been growing at around 2% per year for the last few years. However, since appliance depend on imported parts to produce, the recent increase in tariffs on Chinese goods is starting to slowly increase the prices Southwest pays for appliances. Southwest's facilities are in a single warehouse and office building adjacent to a railroad siding. Warchouse personnel simply unload rail deliveries with the forklifts and flat trucks that are used to handle inventory inside the warehouse. Because sales are made on a customer pickup basis, this location allows the company to avoid the expense of maintaining its own vehicles for transportation in and out. Southwest does, however, have an arrangement with the trucking business next door to handle additional deliveries for customers on a freight collect basis (i.e., FOB shipping point). In the cases of customer pickup and the occasional delivery, sales are considered final when the appliances leave Southwest's loading dock. Southwest is incorporated in the same state in which its home office is located. It does business in its home state and three surrounding states. The company's stock is held by almost 300 individuals and businesses but is not yet publicly traded, Currently, Southwest's top management holds over 50% of the stock The Board wants to expand their business and is anticipating going public with an initial public offering (IPO) within the next year. Executing an IPO will require that the Board make public their historic financial statements and have them auditing as part of the IPO prospectus to potential investors. Southwest currently provides audited financial statements to banks when requesting loans and, sheraforn has.hadandits for each.nfshe lat fion Ran n Sonthunet ie emall thair laesl Southwest Appliances, Inc. specializes in supplying a relatively small line of high-quality household appliances to residential construction contractors in a large and growing metropolitan area. Southwest has a large list of customers, mostly custom builders of single-faimily dwellings and some large builders of single and multiple family units. Southwest basic marketing strategy is always to have inventory available and to sell at competitive prices. At the end of every quarter, the President, Joe Navarro, reviews product costs and adjusts the authorized selling prices of products as necessary. These adjustments are based on Mr Navarro's assessment of what the competition will do as well as what is required to provide competitive profits to the owners. The US wholesale appliance industry has been tracking with the general economy and has been growing at around 2% per year for the last few years. However, since appliance depend on imported parts to produce, the recent increase in tariffs on Chinese goods is starting to slowly increase the prices Southwest pays for appliances. Southwest's facilities are in a single warehouse and office building adjacent to a railroad siding. Warchouse personnel simply unload rail deliveries with the forklifts and flat trucks that are used to handle inventory inside the warehouse. Because sales are made on a customer pickup basis, this location allows the company to avoid the expense of maintaining its own vehicles for transportation in and out. Southwest does, however, have an arrangement with the trucking business next door to handle additional deliveries for customers on a freight collect basis (i.e., FOB shipping point). In the cases of customer pickup and the occasional delivery, sales are considered final when the appliances leave Southwest's loading dock. Southwest is incorporated in the same state in which its home office is located. It does business in its home state and three surrounding states. The company's stock is held by almost 300 individuals and businesses but is not yet publicly traded, Currently, Southwest's top management holds over 50% of the stock The Board wants to expand their business and is anticipating going public with an initial public offering (IPO) within the next year. Executing an IPO will require that the Board make public their historic financial statements and have them auditing as part of the IPO prospectus to potential investors. Southwest currently provides audited financial statements to banks when requesting loans and, sheraforn has.hadandits for each.nfshe lat fion Ran n Sonthunet ie emall thair laesl

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The five inherent risks are 1 Southwest basic marketing strategy is always to have inventory availab... View the full answer