Eo reserve as a percentage of rm is lower in fy 15 as

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E&O reserve as a percentage of RM is lower in FY 15 as the company reviewed RM and discarded inventory not needed. This review was not performed in FY 14, but is being performed in FY 16. The E&O is based on a calculation, as described in the observations at right, and has been consistently applied during the Historical Period. Fluctuations are the result of the Company reserving for inventory at year end, and then writing inventory off, thus decreasing the reserve and the inventory balance. This does not include scrap as the balance of scrap is completely judgmental depending on the amount of reworked aluminum the Company wants to bring in from Party 1.
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© 2016 Grant Thornton LLP | Project Lightning | October 21, 2016 DRAFT 61 Prepaid Expenses $ in thousands November 29, 2014 November 28, 2015 August 27, 2016 Software and related mainteance 321 917 1,039 IM Group 232 237 232 Lease deposits 85 101 104 Bond costs - - 85 Other 11 68 31 Unexpired insurance premiums 302 334 (2) Total 952 1,657 1,489 Prepaid expenses increased as a result of the renewal of software maintenance contracts Balance sheet analysis Observations The table to the left presents the balance of prepaid expenses and other items classified as prepaid. Prepaid expenses consist of software related items and the maintenance of the hardware and software. Software and related maintenance increased as the Company renewed multi-year software maintenance contracts. The Company paid Party 2 approximately $230 to identify government grants available to the Company. The Company did not receive the anticipated benefit of this prepayment and is pursuing funds from the Party 2. There is an offsetting amount in accrued liabilities for the risk the money will not be returned. Lease deposits are returnable deposits for the Company's locations. Bond costs are the costs paid by the Company for a bond that is insuring a project. Other prepaids consist of: Travel advances given to field personnel for business trips, A suspense account related to monthly payroll, Payments made to subcontractors before work is performed on a job. The balance is dependent on whether a subcontractor is paid before a project begins, Prepaid supplies, Returnable deposits for lease or utility deposits and are due back within the current fiscal year. Unexpired insurance premiums are the premiums paid for the Company's insurance policies. These policies begin in September of each year. The credit balance in unexpired insurance premiums is due to over amortization of the prepaid expense.
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© 2016 Grant Thornton LLP | Project Lightning | October 21, 2016 DRAFT 62 The Company made significant capital outlays to expand and improve capacity restraints Balance sheet analysis Observations The table to the left presents the PPE balances at the Historical Balance Sheet dates.
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  • Spring '08
  • McCaffrey
  • Revenue, Grant Thornton LLP

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