Accounting Exam Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Accounting Exam Case Solution

Question 2

Part A

The turnover of the company has increased from £18266880 in 2007 to £25203809 in 2008, whereas its operating profits have reduced from £1136218 in 2007 to £987754 in 2008, due to an increase in the administration expense. The robust financial performance of the company is followed by the launch of systems technologies and products, seeking customer contracts and an improved expertise and capabilities in operating, manufacturing, developing and designing a broad range of space system and small rockets.

In addition to this, the growth of the company is followed by a significant increase in its sales, i.e. from £18 million in 2007 to £25 million in 2008. The increased growth of the company demonstrates its focus on cultivating value, building customer service approach, enhancing the customer satisfaction and promoting strong customer relations. Furthermore, the amount of creditors shown in the liabilities side of the company’s balance sheet stipulates a reduction from -£1385 in 2007 to -£0 in 2008, representing the company’s ability of raising debt. Additionally, the profits of the company has significantly increased from £1 million in 2007 to £1.3 million in 2008.

Thus, the improved financial performance of the company can be justified with the positive sales growth, an improved business performance and a high efficiency. It is pertinent to note that the continued growth and profitability levels of the company represent that the company effectively generates higher sales and profit returns over time. As a consequence of the experience and capability of the company in operating, manufacturing, developing as well as designing a broad range of small rockets and space systems; the company is well positioned to capitalize on the increasing demand from customers, for small space technology system in commercial satellite communication program, intelligence and space based military operations and missile defense programs.

Question 3

Taking under consideration the information provided in the case; the company would be able to pay offits debt obligations due to the reason that the trade creditors has increased from £1101755 in 2007 to £1443367 in 2008, thus the significant increase in the trade creditors would result in an additional cash available to the company, as the suppliers are delaying the payments of the expenditures until the specified time period in future.

Furthermore, the bank loans of the company have reduced from £10812742 in 2007 to £8170172 in 2008, which in turn has increased the company’s ability of raising more debt in the future and making payments from the available cash. In note 13 of the case’s exhibit 2; it can be seen that there is a significant increase in the other creditors from £7399 in 2007 to £15466 in 2008, which in turn stipulates that the company would have an additional amount of available cash to meet the requirements of its debt. It is because of the reason that the suppliers takes considerable amount of time in making payments of the expenses.......................

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Accounting Exam Harvard Case Solution & Analysis