The Cartwright Company Financial Risk

Question 1: Identify all of the risks and key uncertainties the division possesses. Discuss the source, the nature, and outcomes of these risks. Please include what Cartwright has already experienced, as well as further potential results.

The Cartwright Company is a publicly traded entity founded on the basis of family business ownership. The initial operation modality of the entity was mining products before the element of diversification to incorporate various products. The focus of diversification is to expand the scope of business performance as conditioned by the likelihood that a wider scope of consumers would be targeted. The business layout that has seen the modes of operation divided into four primary considerations has heightened the focus of the business with the result that the identified objectives remain on course for realization. A review of the business divisions of Cartwright Company highlights the key uncertainties faced by the business, their source, nature and the outcomes associated with them.

The significant risk and uncertainty faced by the division is dealing with the unreliability of suppliers. The diverse nature of the business is indicative of the potential that most of the raw materials are sourced from diverse countries. The derailing aspect from the suppliers is the uncertainty of the political environment experienced in the countries, the challenges posed by a volatile political atmosphere is indicative of derailment of the initial expectation that may have been outlined. The scope of the business, therefore, falls short of the schedules designated for them. With the political uncertainties fully in play, there is bound to be adverse effects coming into the fold in the form of delays in delivering the business modalities as planned.

Another emerging risk and uncertainty is the translation of the currencies into dollars to enable financial reporting and consolidation. The late-arriving payments are hardly accounted for in the setting as a result of the lack of a standard benchmark to be used as the reference point. All the essential elements are reviewed relative to the designated efforts for value generation in the institutional focus.

The limited capital at the disposal of the divisions curtails the capacity of development and the improvements that would be realized. The mining industry is capital intensive with the result that the standard task planed may fall behind the designated schedule in view of the advancements that would be attained. The source of the risk is the underdeveloped knowledge of the senior Cartwright on the requirements, effectively resulting in stagnation when the plans made cannot be adequately reflected in the expectations.