Working Capital and Financial Environment Case Study

Working Capital and Financial Environment - Case Study Example in this case, the most important elements in the environment are the other actors involved either directly or indirectly with a production process. In assessing the internal environment, the professionals try to identify all the relevant actors paying attention to stated goals and strategies. Abbott and Merck requires huge financial resources on research and development and financial internal control helps to evaluate and analyze financial situation and investments risks. In 2006, Abbott has $24.11 billion revenue while Merck has $23.34 billion. Merck operating margin is 24.48% while in Abbott operating margin is 17.84% (Abbott Laboratories 2007; Merck and Co. 2007). Internal control suggests that all activities are reasonably under control from the perspective of costs. Cost variances can be controlled by establishing a good change control process and sticking to it. First, all requests for changes are documented. The requests describe the impact of the change on costs, the schedule , the technical integrity of the deliverable, and other work being carried out. Once they are properly formulated, they are reviewed by a panel of players who are charged with overseeing progress on the activities.