Applied Managerial Accounting: Assignment 1 – Business Case
Information for cover page
Project Instructions
You oversee the technology department at Innovative Technology Solutions, Inc., a company founded two years ago. The company grew quickly and the executives are trying to decide how to best allocate funds to support the company’s growth.
The executive team approaches you to ask if you think some of the increased revenue should be spent on hiring new employees in your department to keep up with increased demands for the company’s product. You believe growing your team would be beneficial, but you’ve been told to consider a number of factors while analyzing whether or not this would be an appropriate use of funds. If too much money is spent on new hires who don’t ultimately help bring in revenue or trim expenses, the company will lose money in the long run.
You are tasked with creating a business case for your recommendation regarding hiring or not hiring more employees to your team. The company’s accountant provides the financial information listed below, which you will need to analyze in order to make your final determination.
In a 800-1200-word report to the company executives, state and support your decision on whether or not you recommend hiring more employees at this time. Be sure to consider liquidity, solvency ratios, and cash flow in your answer. Your report should include calculations of the ratios and a discussion of the company’s cash flow situation. The calculations you must include in your report are the current ratio, quick ratio, operating cash ratio, debt ratio, equity ratio, and debt to equity ratio.
If you use any Study.com lessons as sources in your assignment, please cite them using APA format (including the lesson title and the instructor’s name). If you’re unsure about how to use APA format to cite your sources, please see the following lessons:
NOTE TO WRITER – YOU CAN USE YOUR REFERENCE OR YOU CAN VIEW THE FILE WITH THE NAME OF ALL THE CHAPTERS AND LESSON PLANS FOR THIS COURSE ON FILE NAME BELOW. If there is any chapter you would like me to upload please let me know which one’s by message board or you can highlight the ones you need on the document and attached with the highlighted chapter you would like me to upload thanks
Financial Information
Balance Sheet
| Assets | |
| Cash in the bank | $45,000 |
| Inventory | $203,000 |
| Office Supplies | $2,500 |
| Office Equipment | $15,000 |
| Total Assets | $265,500 |
| Liabilities | |
| Accounts Payable | $150,000 |
| Notes Payable | $75,000 |
| Total Liabilities | $225,000 |
| Owner’s Equity | |
| Assets | Liabilities + equity |
| Owner’s Liability | $40,500 |
Statement of Cash Flows for Quarter Ending March 31
| Cash received from customers | $250,000 |
| Cash paid for salaries | $100,000 |
| Cash paid for rent | $10,000 |
| Cash paid for other items | $20,000 |
| Cash provided by operating activities | $120,000 |
| Investing Activities | |
| Purchase of equipment | $5,000 |
| Financing Activities | |
| Additional owner’s equity | $5,000 |
| Cash on hand as of Jan 1 | $35,000 |
| +$120,000 | |
| Cash on hand as of March 31 | $155,000 |
Grading Rubric
Your report will be graded on the following rubric:
| Category | Unacceptable (0-2) | Needs Improvement (3-6) | Good (7-8) | Excellent (9-10) | Total Possible Points |
| Content (x2) | Liquidity and solvency ratios are not included. No commentary on cash flow is given. | Liquidity and solvency ratios are included but mostly incorrect. Commentary on cash flow is given but poorly articulated. | Liquidity and solvency ratios are included and mostly correct. Commentary on cash flow is given and well-constructed. | Liquidity and solvency ratios are included and correct. Commentary on cash flow is expertly articulated. | 20 |
| Presentation (x2) | The format is confusing, illogical, and/or doesn’t meet required length. | The presentation meets length requirement, but is difficult to understand at times and/or lacks professional quality. | The presentation is appealing, clear, and easily understood. | Text is presented in a professional and creative manner that enhances delivery of the content. | 20 |
| Mechanics (x1) | Incorrect spelling, punctuation, capitalization, and use of standard English grammar hinders understanding | Several instances of incorrect spelling, punctuation, capitalization, and usage of standard English grammar | Few instances of incorrect spelling, punctuation, capitalization, and usage of standard English grammar | No or very few instances of incorrect spelling, punctuation, capitalization, and usage of standard English grammar | 10 |
| Total | 50 |
Before You Submit
When you are done writing your report, we suggest taking some time to check for any errors or to add some final touches. We also suggest that you use online plagiarism checkers such as PlagScan or DupliChecker to make sure that your report is not too similar to any existing materials. Plagiarized submissions will NOT be graded.
How to Submit Your Project
When you are ready to submit your project, please fill out the submission form and attach your essay as a Microsoft Word or Text document. After turning in your report, you may go ahead and take the proctored final exam. You do not need to wait for submission to be graded. You should receive your essay grade within one week.
