Intermediate Accounting if You Were Essay

If the company does not take this step, to improve its product line and offer a better future option the company is likely to lose significantly more than the internal offset erosion of the existing brands. In fact the cash-flow question would only be an issue if another company were about to produce a product that would erode current sales of traditional products. Without the development of new products and the utilization of surplus production space the company is not only likely to lose but sure to lose market share in the niche they produce products for. Though the case study does not make clear that an outside threat exists it can be assumed that if this company has gone into full development of a new product that better meets the needs of consumers any other industry company could and would likely erode sales of existing products.The fact that the cash-flows associated with erosion of current product sales will be real cash-flows for this company, as a result of being cash flows for anew internal product, makes it clear that they should be included in the broader picture of the future of the company as real cash-flows despite their offset nature. New products are being developed all the time and as an industry the challenges are many. This company would seem to be in the dark ages with its two product line. Though it shows conservatism that has served the company well, especially with regard to streamlining production the company would seem to be poised to produce, market and sell a new possibly better product itself rather than fade out as its products become less….....