Flash tech
1.5 positive aspects associated with Flash
1. Even though Flash Tech is relatively small, its stock price has grown 399% over the last 5 years.
2. Most of the comments are positive of Flash Tech.
3. The plant employees are well trained, which indicates the high efficiency.
4. Flash memory market is promising and increasing rapidly. (in applications where durability is of extreme importance, flash memory is the preferred technology at any capacity) The demand is growing. (Because of the enormous potential for this market, there may be opportunity for small players to be successful.)
5. FT’ can provide customized products for specific customers and devices and has advantages in serving OEM market.
2.9 general areas of faced risks
The operating stability risk. Some of the employees complain about the working pressure and some rumors exist on press.
The risk of material shortages. Company may suffer from components shortages. The risk of shortage is high because of no long-term supply agreement existed and no alternative sources available.
The profit risk. The competition in flash memory market is fierce. The manufacturers, which have higher levels of integration, may cost less than FT. Increased competitive pressure may lead to intensified price competition (lower prices/ gross margins).
Several competitors are also vendors of raw materials for FT.
The risk that the agreement with AT&T may not realize. Further it may lower FT’s stock price.
SEC sent a notification to perform a review of Flash’s financial statement filings, which may fluctuate the stock price.
(The president of the only buyer of Flashwall 2011 will be joining Flash’s Board of directors.)
The risk of formation of Flash Korea with unforeseen costs or delays.

3.analytical procedures

Excel
1. 4 high-risk areas associated with Flash’s financial statements
Accounts receivable: The AR amount is large and the uncollectible debts is nearly two times the last year. The company’s operation and profitability would be influenced if any of the major clients fail to pay the amount owed. (similar to notes receivable.
Inventories: This year’s data is doubled the former year and it counts for 32.68% of total assets. If the high-tech market grows fast and current technology or machinery become obsolete, the large amount of inventories, especially raw materials, purchased by FT may be useless, which could be a huge loss. Besides, the