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RESOURCES UNLIMITED

RESOURCES UNLIMITED. CORPORATION. BY: Chastity Clemons-MSM 630. OVERVIEW. Downfall Baseline Profits (1986-1988) Gas Accounts (1990) Salary Determination Senior Management Style Accounting Practices Lines of Communication. The Start of Corporate Downfall.

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RESOURCES UNLIMITED

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  1. RESOURCES UNLIMITED CORPORATION BY: Chastity Clemons-MSM 630

  2. OVERVIEW • Downfall • Baseline Profits (1986-1988) • Gas Accounts (1990) • Salary Determination • Senior Management Style • Accounting Practices • Lines of Communication

  3. The Start of Corporate Downfall • President of Resources Unlimited didn’t see a problem with the natural gas purchase cost and sales prices swinging wildly. • Accounting reports were reported wrongly to analyst in New York. • Corporate profits being considered unrealistic sent in memo was ignored by CEO.

  4. BASELINE PROFITS 86-88 1987-1988 1986-1987 342+267+321+157=1,087,000,000 33+349+132+289= 803,000,000 1,087,000,000-803,000,000 = 284,000,000 loss between 86-87 to 87-88

  5. Gas Accounts • In 1988 Resources Unlimited had: • 32 Gas Accounts • 64 Oil Accounts • In 1990 Resources Unlimited had: • 43 Gas Accounts (86/2) • 86 Oil Accounts (given data) Keeping with the same trends as 1988 at 50%

  6. Salaries • Entry-level management • $50,000~$55,000~$52,000 (Males) • $32,000 (Female) • Two Standard Deviations= $5033.22

  7. Discrimination • $52,333.33 (Mean) • $5033.22 (2 standard deviations) • Subtract 2 standard deviations from mean. • $52,333.33-$5033.22=$47,300.11 • Female makes $32,000. • To avoid lawsuit females salary should be at a minimum raised to $52,333.33 or get a good lawyer.

  8. Senior Management Style • Senior management needed to monitor the transfer of gas accounts more closely and stop transferring to a fake hedge fund. • Company must maintain enough gas accounts for 30 days to ensure a positive cash flow. • Looking back the most they had was 43 gas accounts in 1990. • Indication company was heading to bankruptcy. • Pay close attention to warning signs.

  9. Accounting Practices • Paying close attention to changes in a deregulated industry. • Inherit a financial plan. • Conduct research. • Refuse to use derivatives and hedges.

  10. Line of Communication • CEO failed to communicate plan and company goals. • CEO neglected communication from employees. • Employees relied on hear say instead of concrete evidence. • Employees were left to themselves. • Non-verbal communication was negative which resulted in discrimination. • Top management failed to convey clear standards.

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