Octavan Construction Inc Case Study Example | Topics and Well Written Essays - 750 words

Octavan Construction Inc - Case Study ExampleOctavans reporting policies are pretty acceptable and would be proficient to the caller-up in the farseeing term so the only suggestion to pull in here is that they should bring together with these policies even if they are trouble some at the beginning The working crownwork and the debt to law ratio has been on the dec descent which shows that that company is not doing so good on the assets front, the debt to equity ratio has declined and that is not a good sign because the value of the assets has been on the decline and liabilities have big(a) considerably which is not a good sign for any company, even creditors such as Broadmoor County imprecate have started to believe that the company is in trouble and are trying to secure there loans against securities that were not deemed necessary before. Since the company has changed its depreciation method the company will now experience a sum change in the depreciation expense and accu mulated depreciation, which would definitely have a good nucleus on the assets because the current method which was employed by the company was depreciating the assets too quickly and was surrealistic for the company to use and hence it is a good move to change the depreciation method of the company and this will reap positive out come for the company. The second change that is being implemented by the company is that they have changed the method of long term billing from absolute method to the percentage-of-completed project which initially increases costs but in the long term would help the company build on steady because there would be a better matching of the costs and revenues which would lead to a better fiscal report in the bigger picture.Ans 2. Octavans reporting policies are pretty acceptable and would be beneficial to the company in the long term so the only suggestion to stumble here is that they should stick with these policies even if they are trouble some at the beg inning because they would definitely lead to an improvement in the companys financial books. The company shouldnt have placed as collateral its current assets because these assets are the blood line of the company and since octavan is already facing a declining working capital and a debt to equity ratio it is not advisable that this step be taken.Ans 3, The Company has changed the depreciation method due to the non effectiveness of the antecedent (MACRS) method due to which the company had to face considerable reporting problems but now the company has switched to a more effective and a reporting friendly method, known as the double depreciation method. For long term contracts the company will now be using the percentage-of-completed work to match the expenses and revenues in a better manner.American Physical and Social Programs For Children Inc.Ans1. The implications of such a policy are very clear, because the operations of the company are focused primarily on children activities and as the case points out that the study barter tip for the company was from September to June it is a good policy to have a June 30th as the end of all financial activities because by then the company would have had completed one major cycle on the business front, plus all the major expenses and liabilities have been realized by that period and the company knows what exactly is expected of it since the major part of its revenue has been earned during that period it can good match the expenses against the revenues using the matching principle, it is also an excellent policy to do so because companies need to make their financial statement when they consider they would come out the best and given the circumstances that the company operates in it has clearly realized what the best period for preparing financial statements is. Also, using June the 30th as the basis for qualification the financial reports gives the advantage of having a summer tent during the summer vacations, b ut more importantly this gives them the clipping to incorporate the revenues of the summer into the financial books because people have to pay in advance (march) for the summer camp and this is an added advantage of havi