Overseeing two business divisions, vinyl and premium Titan, ChessPerfect is a chess set manufacturer under CEO Linda's direction. To have a better grasp of financial performance, the production manager stressed the significance of taking absolute data into account rather than ratios. This strategy has advantages, but for thorough financial insights, a balanced viewpoint that takes into account both ratio analysis and absolute numbers is essential. In order to maintain moral business conduct, ChessPerfect needs to make sure that its accounting processes are clear and consistent, follow accounting regulations, and cultivate a culture of morality via consistent ethics training and a robust ethical framework. The General Manager, who is patient and open to different viewpoints, "Thank you and we know your views, and we certainly need to see how they hold up over a number of accounting periods, not just one. She placed a paper on the table. "These are the numbers I received this morning- the 2024 numbers are not official yet as they still need to be verified and the data is a bit messy. I haven't had time to make sense of it but take a look here." Cash- year end Operating expenses- annual Accounts payable- ear end Sales revenues- annual Accounts receivable- year end 2024 $244.000 1,124,000 44.000 1,724,000 64,000 2023 $334.000 1.244,000 44.000 1,754,000 54,000 2022 $324,000 1.254.000 44,000 1,654,000 44,000 The Sales Manager takes a quick look at the data and says, "I'm not an accountant but it seems to me that there might be a mistake with the numbers which impact profit- either the numbers on the paper are wrong or the ratio calculation is!" Linda weighs what the Sales Manager is saying and quickly interjects with a gesture to the General Manager. "She did mention the numbers haven't been verified yet, but we can dig deeper into that." He makes a quick mental note to confirm how net profit is calculated and if the profit margin ratio makes sense. He wonders if there are other expenses to consider, not just operating expenses. The Production Manager took a quick look at the paper and said, "It seems like our revenues are trending down, which, of course, means lower profits. And remember that we also pay our shareholders as good a dividend as any of our competitors, if not better." Linda recalls that the company paid about 14% of it profits as dividends last year. He has held off on declaring dividends this year, but wants a pros and cons analysis on paying dividends. He wonders how the business's cash situation would be affected if the corporation stuck to its usual policy of paying out 14% of profits to shareholders. The company typically waited until supplier bills came due before paying- what if they delayed paying? That could certainly help the cash situation, but there could certainly be downsides to an act like that. Linda wants a detailed analysis of this, too. The Sales Manager interjected. "The lower revenues aren't my fault! Customers are not paying quickly and that messes up my numbers!" It's ok, I will look into that." Linda makes a mental note to inquire about the impact of unaid invoices on sales revenue and to seek recommendations on how to entice customers to pay more quickly. He is wondering if there might be drawbacks to requesting quicker payments. "How are union negotiations going?" Linda turned to the Human Resources Manager who had been quiet throughout the meeting. She sighed. "They're going- we should probably project a 10% increase salary expenses next year- they're playing hardball because of the high inflationary environment right now!" Linda chewed his lip and refrained from asking if firing some of the louder employees was a good way to send a message- perhaps that would limit raises to only 5%. As it stood now, he was expecting sales to remain flat next year and operating expenses to increase 8% overall. What would that do to the firm's bottom line? He made another mental note to ask for help with the projection and perhaps his negotiation strategy too. Wisely, he steered the conversation in a new direction, turning to the Production Manager. "So, our new premium Titan business unit- how is that going?" He frowned. "We don't have exact profit numbers yet since we get special orders over there and we are having trouble tracking costs of those orders." Linda nodded. "OK, so we need a proper costing system for specific jobs." He had a suspicion that there were issues in the premium Titan department and had planned to ask his cost accountant friend about it, but she was away on a vacation at the moment. Linda would need to seek help elsewhere- the business was getting a lot of special orders and tracking and recording costs of each order accurately was imperative. Specifically, he needed advice on allocating manufacturing overhead costs and making journal entries- detailed examples of both would really help. With so much to think about, Linda ended the meeting and called you, an MBA with accounting expertise, to help him. Objective: Write a detailed business memo providine feedback on the issues raised in the case. Be Objective: Write a detailed business memo providin resto/paraphrase heavily from troineust or other source)- your work WILL be analvzed for Al use (NOT permitted) and similarity. You MUST submit your work digitally at the end of class and return the case paper!