RESOURCES UNLIMITED CORPORATION BY Chastity ClemonsMSM 630 OVERVIEW
RESOURCES UNLIMITED CORPORATION BY: Chastity Clemons-MSM 630
OVERVIEW • • Downfall Baseline Profits (1986 -1988) Gas Accounts (1990) Salary Determination Senior Management Style Accounting Practices Lines of Communication
The Start of Corporate Downfall • President of Resources Unlimited didn’t see a problem with the natural gas purchase cost and sales prices swinging wildly. • Accounting reports were reported wrongly to analyst in New York. • Corporate profits being considered unrealistic sent in memo was ignored by CEO.
BASELINE PROFITS 86 -88 1986 -1987 -1988 PROFITS (millions) 400 350 300 250 200 100 150 100 0 50 0 1 st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter 342+267+321+157=1, 087, 000 1 st 2 nd 3 rd 4 th Quarter 33+349+132+289= 803, 000 1, 087, 000 -803, 000 = 284, 000 loss between 86 -87 to 87 -88
• In 1988 Resources Unlimited had: Gas Accounts • 32 Gas Accounts • 64 Oil Accounts TRENDS Gas Accounts Oil Accounts • In 1990 Resources Unlimited had: • 43 Gas Accounts (86/2) • 86 Oil Accounts (given data) TRENDS Keeping with the same trends as 1988 at 50% Gas Accounts Oil Accounts
• Entry-level management Salaries – $50, 000~$55, 000~$52, 000 (Males) – $32, 000 (Female) – Two Standard Deviations= $5033. 22 Results: Total Numbers: 3 Mean (Average): 52333. 33333 Standard deviation: 2516. 61148 Variance(Standard deviation): 6333333 Population Standard deviation: 2054. 80467 Variance(Population Standard 4222222 deviation):
Discrimination • $52, 333. 33 (Mean) • $5033. 22 (2 standard deviations) • Subtract 2 standard deviations from mean. • $52, 333. 33 -$5033. 22=$47, 300. 11 • Female makes $32, 000. • To avoid lawsuit females salary should be at a minimum raised to $52, 333. 33 or get a good lawyer.
Senior Management Style • Senior management needed to monitor the transfer of gas accounts more closely and stop transferring to a fake hedge fund. • Company must maintain enough gas accounts for 30 days to ensure a positive cash flow. • Looking back the most they had was 43 gas accounts in 1990. • Indication company was heading to bankruptcy. • Pay close attention to warning signs.
Accounting Practices • Paying close attention to changes in a deregulated industry. • Inherit a financial plan. • Conduct research. • Refuse to use derivatives and hedges.
Line of Communication • CEO failed to communicate plan and company goals. • CEO neglected communication from employees. • Employees relied on hear say instead of concrete evidence. • Employees were left to themselves. • Non-verbal communication was negative which resulted in discrimination. • Top management failed to convey clear standards.
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