CASE SCENARIO - BSAD060 Fall 2016 CASE SCENARIO Due 12\/8 Carlo Daniele will never be accused of having a dynamic presence The bespectacled accountant


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BSAD060 Fall 2016 CASE SCENARIO – Due 12/8 Carlo Daniele will never be accused of having a dynamic presence. The bespectacled accountant spread 145 pounds over a 5’7” frame and, if you even noticed Carlo, his baby face and full head of short, brown hair gave the look of a college student absorbed with how to survive finals week. But, looks can be deceiving. The 35-year-old son-in-law of the town’s wealthiest man is the president and the driving force behind Mason Enterprises, one of the nation’s largest, privately held gift wholesalers. Certainly, marrying the owner and chairman of the board’s daughter didn’t hurt Carlo’s ascent through the ranks of Mason Enterprises. His ability to quickly grasp numbers and their relationships to the gift business, though, was the overriding reason Carlo became president and chief operating officer (COO); his marriage to David Mason’ only daughter was why he achieved his current position at the young age of 29. Now, as Carlo Daniele met with David Mason to discuss the owner and chief executive officer’s (CEO) concerns with the latest financial statements of the company, it became, once again, apparent to Carlo why he needed to break away from his father-in-law and start a business of his own. When David Mason failed to understand the financials of the company or got a half-baked idea about someone stealing money, Carlo was subjected to tirades of epic proportions. David Mason knew how to design and sell innovative gift products, but he knew nothing about how to manage corporate finances—a fact that he often failed to recognize. This led to hours of listening to the rants and raves about the financial health of the company. “At times, I wonder what my daughter sees in you!” David Mason yelled. “I’ve spent 30 years building this company. I’ve got the two hottest products in the gift market today. Then I look at the preliminary financials that your wonder boy accountant gives me and our profits are pathetic (Table 1). Can you explain that to me?” With all due respect, Mr. Mason, the 2016 figures are only preliminary numbers. Every year there are accrual adjustments that are made by Andy, our wonder boy accountant, as you call him . Afterwards , I review the financials. You’ve never looked at the preliminary financials in the past, so I can see why you might be confused. Until these adjustments are completed, let’s not jump to the conclusion that our financial results are disappointing. I will admit, though, gross profits have decreased slightly over the past few years.” “I don’t know how many of these adjustments you’re expecting to make, but I’d better see a more positive bottom line when you are done! And when you begin your clarification of these numbers, you can first explain why my gross profit appears to be down. I can’t go to the bank and ask for a larger credit line with these financials! How do I explain to my ultraconservative banker that I’ve increased sales but made less money per sale? He’s been on me to spend money for an outside
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