Cayman Island Divers Ltd. (B)
Case number:
A01-03-0003
Abstract
This case is the follow-up to Cayman Island Divers Ltd. (A). Part A focused on the preparation of historical financial statements, whereas Part (B) focuses on the preparation of pro forma financial statements for an eight-month period. The decision-setting concerns are whether or not the new venture would be wise to make a capital investment into an additional dive boat.
Teaching
Although this case begins by asking students to prepare the historical financial statements for the month of August, the main pedagogical objective is the development of pro forma financial statements for the period of September to April. Students can use the projected results to assess whether demand is sufficient, and returns sufficient, for a new venture to take on a substantial capital investment so soon after start-up.
Case number:
A01-03-0003
Subject:
Accounting and Control
Year:
Setting:
Carribean
Length:
4 pages
Source:
General Experience