Case Report

1499 words 6 pages
Celebrations and Memories Ltd. (CML)

Current Situational and Future Growth Opportunities Analysis

By: Robyn Berg, CMA (1072063)

Gordon Hoops
Chris Mantha

Executive Summary

MCL has been operating successfully for decades, but as times change, now they are finding themselves in a situation which requires in mediate action.

Situational Analysis

Even though MCL is still profitable, the ratios calculated (Appendix 1) indicate that the company is not very liquid, and is in risk of becoming insolvent.

CML’s liquidity ratios all fall below the commonly acceptable. For example, the quick ratio for 2011 is 0.11, when the acceptable is 1.

…show more content…

By choosing a correct inventory valuation system, it would eliminate the lack of proper inventory system threat.

10% of obsolete inventory should be put on sale for a month or so, if they are not sold I would discard or donate and write off from inventory. There is an opportunity cost to having these items on display, as items that can be sold at a gain, are not been displayed, so these items could.

The lease deposits are to be treated as prepaids, not an expense. It is recommended that the deposits paid during 2011 be re-classified to the balance sheet. For all old deposits, it is not recommended to do an adjustment. This would prepare the company for proper financial reporting and pass the external audit.

No employee should be paid in cash. This is illegal, and cannot happen in the future. Store managers and Sales manager allowing this should receive a communication explaining the implications of their actions.

Layaway program deposits should not be recorded as revenue until item is paid in full. Should be recorded as unearned revenue until then. If the item is never picked up, the 20% deposit can then be recorded as “other income”. Any deposits taken during November and December 2011, that have not been paid in full yet, should be deducted from revenue and recorded as unearned revenue until the 2 month threshold has passed. This adjustment will help pass the external audit.

Perhaps if staff received yearly


  • Case Report
    9306 words | 38 pages
  • Case Analysis and Report
    3777 words | 16 pages
  • Link Technologies Case Report
    1314 words | 6 pages
  • Ocean Carriers Case Report
    1475 words | 6 pages
  • Platinum Box Case Report
    1549 words | 7 pages
  • Old Joe Case Report
    2379 words | 10 pages
  • Crocs, Inc. Case Study Report
    2063 words | 9 pages
  • Case Report London Public Library
    2239 words | 9 pages
  • Case Report: Glaxosmithkline Reorganizing Drug Discovery (a)
    2108 words | 9 pages
  • Si Report Case Study Royal Dutch Shell
    2794 words | 12 pages