Cac Case

First Glance:

Service revenue is going up----and SRE wants CAC because it wants the corporate service business line. At first glance service business line doing well...

CAC seems like it is becoming more established, self sufficient with the computer purchase rather than previously renting equipment....also they took on an employee because service revenue is going up.....sign of a growing company in general = operating up, investing negative, financing positive...at first glance financials agree with that.

Sales Revnue stable 2010 to 2011 and then drops 2012....COGS goes up in 2012....Inventory goes up 2012 => IF COGS is going up but revenue is going down-----selling at a discount.....dumping it....their inventory is too high....over purchasing inventory....and then selling at firesale prices

R&D is dropping off a cliff---why is research going down.....developed technology and in selling phase...cutting costs and R&D is easy target to cut.....moving towards establshed services that don't need R&D....the fear is if R&D is going down are they as innovative as they claim/reputation implies.....

Allowance for doubtful accounts is going down slightly but the accounts receivable is going up....allowance for doubtful accounts is not going up at same rate as accounts receivable------implies that they are overstating their accounts receivable current assets (close to cash)

statement of cash flows shows cash going up from operating activities---however----but if he hand't changed his contracts, he would be losing money and net income and hence operating cash flow would be down

Change in contracts----expect it to amp up service revenue and accounts receivable....financial statements show service revenue up but accounts receivable didn't go up much...some asset had be debited, what was it? Suspects are equipment,

cash dividend of 17,000--------is he depleting the company of cash.....why is he taking out money if they are a growth company

60,000 to...