Case Study on Accounting
Brilliant Accounting Case Study from Professional Writers
The students with their major in management accounting need in-depth knowledge in dealing with case studies. Currently, they are viewed as a popular research method. What do they let the students do? They can learn about actual organizational issues and potential resolutions. Also, they can enhance development of the problem-solving abilities and challenge them. For instance, an accounting case study is common for a lot of academic institutions and it is a teaching material for professional bodies. Some of the assignments are grounded on the experience of the existing companies, while others illustrate chosen issues with fictitious examples. Learning problems in the area of management, the students use the tasks given to them by their professors. Still, it is challenging to prepare case studies for a lot of students and they have tough time, dealing with the cases. It may be confusing to deal with such tasks, but you can eliminate the problems if you ask a professional writer for help.
Case Study in Accounting: What Is It?
Both humanities and social sciences use this type of tasks. Also, in business management and accounting, professors take various case studies as common assignments for the students to gain a clear understanding in typical practices. There is a common critical remark concerning using this method. They say it can be not generalizable. Still, it is not absolutely relevant to business management or accounting as it is related to a methodological approach, not positivistic view.
Our expert writers can deal with any case study on accounting to seek for suitable solutions, taking a series of steps. If you decide to use their services, you can be sure that they find reasonable solutions to various accounting issues and you get a guarantee that they take all possible effort to make your grade higher.
Our experts in handling a financial accounting case study will never miss out the following stages:
- Sampling
- Doing in-depth surveys
- Creating an outline on the basis of the gathered details
- Giving a proper presentation of the findings
- Observing minute details
- Citing and referencing in a proper way
We make sure that the writers acknowledge the importance of getting credible solutions and taking all the required steps. You provide the instructions and our writers customize any task solution in accordance with your individual request.
Thus, if you hire one of our experts to deal with your accounting case study, you always stay ahead. Our professional writers will deal with all the details, while you learn from their experience and skills.
How to Handle Accounting Case Studies!
It is important to learn how to write corporate accounting papers as this knowledge will be useful in your future career. Please, note that the structure of a case study ought to require your special attention. If you disregard the rules of arranging ideas, you will lose your scores. You might know little about perfect structure of this type of assignments. Nevertheless, you will get first-rate assistance from our writers. You might have a look at some good accounting case study example to understand the requirements. Right now, you can make good use of our tips regarding the structure in writing:
Title page.The paper has the first page with the information about the author and the case study itself.
Executive summary.A concise summary of the paper is given in this brief section to let the readers know about the key aspects.
Introduction.The paper topic is introduced in this first part of the case study. Your key task is to make your readers interested in reading through the remaining sections.
Background details.This is the section with all the relevant details, background information, and various issues on a certain accounting case study.
Problems.This section implies identifying the case study problems with the findings of the conducted research.
Suggested solution.The expert explains the reasons why this realistic solution is chosen and presents the evidence to support it.
Recommendations.This is a part devoted to the discussion of the strategies used to implement the suggested solution. We also give further recommendations and suggestions as for the problems.
This is a perfect structure of a case study that offers a solution at a high level of quality.
Accounting Case Study Examples
Your writing skills and competencies can be really high, but it is always valuable to check on good examples of the papers to see how to make that of yours even stronger. Handling a complex topic, you can get valuable tips from someone’s writing and learn meaningful lessons from other writers. We give great samples that you can use in your writing to know more about the case studies.
Study our examples of case studies and it will be clear for you how to approach complicated matters in writing and maintain the highest quality of task completion. Thus, with us, you will gain more confidence in handling the tasks you will need for your future.
Introduction
Beautifully Fabulous Beauty Salon (BFBS) has been in the business for a while. It is a profitable business and always has a significantly positive net income. The income statement for the previous year showed a net income of $100,000. This happened as it had a net profit of $140,000 in its Store 2. On the contrary, it had a loss of $40,000 in its Store 1. This happened as the segment had prohibitive common fixed expenses that had been allocated to it on the basis of sales dollars. Accordingly, BFBS was considering closing down Store 1 because it is not profitable. Consequently, it conducted a financial analysis of this option of closing down Store 1 to determine its value. If only closing down Store 1 would be beneficial for the firm in terms of the bottom line, it will then close the Store 1.
Financial analysis
Accordingly, we considered the value of the real option of abandonment option available to the firm. The new income statement for the firm is given in Table 1.
Table 1: New income statement after closing down Store 1
Beautifully Fabulous Beauty Salon
Store 2
Sales
$640,000
Less: Variable expenses
$288,000
Contribution margin
$352,000
Less: Traceable fixed expenses
$153,000
Segment margin
$199,000
Less: Common fixed expenses
$300,000
Net operating income
-$101,000
The abandonment option for the company has a negative value. The value of the abandonment option is calculated as the total value after abandonment minus total value before abandonment. The total value before abandonment to the company was in the form of net operating income which was $100,000. After exercising the abandonment option the total value to the firm is only $101,000. Therefore, the value of the abandonment option is 101,000+100,000=201,000$. Therefore, the company is not in a position to exercise this option.
An analysis of the income statement shows that the firm will have decreased sales for Store 2 after abandonment. Then, its sales for Store 2 will decrease by 20%, which is equal to (0.2*800,000=$160,000. However, there will also be a corresponding decrease in the variable costs equal to 0.2*360,000=$72,000. Still, the contribution margin will decrease by
440,000-352,000=$88,000. The traceable fixed expenses will also go down to become equal to $153,000 (0.8*180,000). Still, the segment margin will go down by (=260,000-199,000) $61,000. However, even after closing down the Store 1, the common fixed expenses will not change to remain equal to $300,000. Accordingly, the net operating income of the firm will go down by (=100,000-(-101,000)) $201,000. This is also the value of the abandonment option.
Therefore, it is clear that the company cannot close down Store 1 as it is required to bear the fixed common costs that cannot be changed. This is because the plant can only produce products that are sold by both stores. If one of the stores is closed down, the product uptake will go down to zero for that store, and 80% of the original volume for Store 2. Then, the factory will have to produce much less, which will result in a huge slack in production. This slack will be very costly and will result in great loss to the firm as the single store will not be able to bear the entire cost of running the factory at significant underutilization. Then, operating at 30% to 40% of the capacity will be prohibitively expensive. This will happen as the economies of scale will not be realized.
Conclusion and recommendation
It is therefore clear that closing down Store 1 is not the real abandonment option available to the firm. This is because the costs of closing down are prohibitively high which come in the form of decreased sales of Store 2 and prohibitively high common fixed expenses for the store. Accordingly, the value of the abandonment option available to the firm is significantly negative. Resultantly, the company is unable to close down Store 1 or the other, which is already profitable. Accordingly, it is strongly recommended to the management that it refrains from closing down Store 1.
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