Riordan Manufacturing Paper

Riordan Manufacturing Paper

Abstract

The purpose of this paper is to provide a summary of the financial state of Riordan Manufacturing. To achieve this, it examines some of the key financial and accounting systems currently in use by Riordan and provides several solutions to help improve the performance of their accounting systems. In conjunction with this, the Balance Sheet and Income Statements are evaluated, reviewing each section separately. By using current and quick “acid test” ratios, the Balance Sheet is evaluated for growth and status from 2003 to 2004.

Introduction

Riordan Manufacturing (Riordan) is one of the largest plastics manufacturers in the world right now. Its products include plastics for beverage containers, plastic parts for fans, and customized plastic parts for various uses. Riordan has established manufacturing plants in various locations around the United States and China with their main corporate headquarters in San Jose, California. It is there the majority of the company’s research and development is carried out. Riordan provides their products to various types of businesses including the beverage industry, automotive companies, and even military contractors.

The current financial situation of Riordan is fairly positive at the moment. Backed by Riordan Industries, a fortune 1000 company with yearly revenues in excess of $1 billion, Riordan was given a healthy budget with which to carry out its everyday operations and R&D projects. Riordan’s operational offices are located in Michigan, Georgia, California, and in a joint venture in China. Each office has its own implementation of their finance and accounting system. Data regarding Finance and Accounting gathered by regional offices is consolidated and analyzed at the main corporate headquarters in San Jose, California.

Status of Finance and Accounting (F&A) system for Riordan

As mentioned earlier, the Finance and Accounting systems used by the three operational offices are very different. The San Jose offices employ a windows-based ERP system which manages the manufacturing, distribution, and financial operations conducted by Riordan. The Michigan office uses a vendor-developed application to process their Finance and Accounting data. This application is written in C, implemented on the VMS operating system and is used on VAX4000 workstations. The Georgia office uses a different vender-developed application which provides the same service as the Michigan office. It is programmed in RPG400, implemented on the UNIX operating system, and is used on PCs.

The challenge for Riordan’s Finance and Accounting Department is to improve the data compatibility between the three locations. Each