TO: THE CHAIRMAN OF THE COMMITTEE
FROM: THE MANAGEMENT DOCUMENTALIST OF THE PANEL
DATE: 5TH JULY 2008
SUBJECT: COUPLE OF METHOD OR PERHAPS TECHNIQUE INSIDE THE MANAGEMENT ACCOUNING CAN BE USE TO SOLVE THE MAJOR CRISIS FACING IN THIS ORGANIZATION.
Nature of the industry’s business
Ranking Strategy Sdn Bhd (RSSB) was incorporated in Malaysia as a non-public limited organization on (30th September 1996) under the Companies Act, 1965. The company's primary activities are interior design, building works and manufacturing bottom for foreseeable future expansions.
RSSB specialized in Decoration Works and Turnkey Renovator Works pertaining to Offices, Restaurant, Hotels, Banks, Residential, Clubs and Places & Collection Built-in Wardrobe, Kitchen and Office Furniture.
Catastrophe / Difficulty
In the initially half season of 08, this company facing a major financial problem. The corporation has limited fund useful resource to accept profitability project, to investing capital expenditure to expand their very own business and to employ skills workers to efficient the productivity. This matter was because of the lack of control and unconcern on the budget.
The receipt of sales was based on the percentage of the project's work done as well as the contract life is 1 year. More than 80% revenue are gets in couple of months later. The money inflow might not enough to hide the cash output, because some project could possibly be taken up to 3 months to complete. Furthermore, 50% from the purchase and sub contract was sustained during the job period. And some of the expenditures were not properly spent.
In the meantime, the company manager decide to tender an inside design task in Subang Jaya, the contract amount is RM 1, 640, 000 (Ringgit Malaysia: A million and Six Hundred Forty Thousand Only). In case the company got the Letter of Merit for that task, the task may start at the conclusion of September 2008. This project will certainly taken a couple of months to complete. Then, the company needs to make sure they have enough cash...