Just Make The Numbers!

Just Make the Numbers!

The discussion between Don Chambers, the CEO, and Ron Smith, the CFO, was get-ting heated. Sales and margins were below expectations, and the stock market analysts had been behaving like sharks when other companies’ published quarterly or annual financial results failed to reach analysts’ expectations. Executives of companies whose performance numbers failed to meet the levels projected by the executives or the analysts were being savaged. Finally, in frustration, Don exclaimed, We must make our quarterly numbers! Find a way, change some assumptions, capitalize some line expenses—just do it! You know things will turn around next year. And he stormed out of Ron’s office.

 

Question

1. What should Ron consider when making his decision?

 

Prepare a report with a minimum of 1,000 words for the following case study.

 

After reviewing the case study, consider the following questions in your report.

• Discuss what Ron should consider when making his decision.
• Discuss how stakeholders may be impacted by a decision made by Ron.
• Discuss techniques that may boost earnings.
• What action would you take if you were the CFO?

The facts of the case should be included in the report.