Andrew Ferris, a financial analyst at Southern Cross Capital LLC, has been invited to evaluate salesforce.com accounting policies and the recent financial performance of the portfolio manager’s decision as to whether the common shares of the company to be acquired by Fund for growth. Salesforce.com is a software company specializing in providing application management (CRM), accessible by users in the “cloud” instead of by the resident software on your own server for a user. Salesforce.com has maintained a direct sales force that sells services to customers through telephone contacts, and through a network of geographically disbursed sales representatives who have personal contact with potential customers. The direct sales force was offset primarily by sales commissions that were paid in cash after a customer has entered into a non-cancelable subscription. The portfolio manager specifically asked Ferris to pay particular attention to understanding how salesforce.com represented expenses of the commission, as many companies in recent years there has been a substantial decline in stock prices after items financial press revealed that companies have inflated their income by deferring expenses.
by
Graeme Rankine
Source: Thunderbird School of Global Management
14 pages.
Release Date: October 4, 2012. Prod #: TB0305-PDF-ENG
Recognition of income and expenses salesforce.com case of a solution
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