Hawk Holdings Limited Harvard Case Solution & Analysis

Introduction& Problem Statement

Hawk Holdings Limited is a private company founded by James Steel.Company offers storage solutions to a variety of business clients. Owner of the company is concerned about the financial statements which should provide a clear image and financial position of the company in order to attract greater number of investors.

A preliminary trial balance sheet has been formulated by the present bookkeeper Joan Chen for the fiscal year ended 2016.Joan Chen is not a professional accountant therefore it is expected that lot of adjustments should be performed in order to formulate the financial statements of the company.

Financial Analysis

As the currenttrial balance sheet of the company has been made by a non-professional accountant,therefore in order to formulate proper balance sheet and income statement there is a need to adjust trial balance. Certain adjustments have been performed related to leasing and tax amount as Joan left before making tax estimates for the fiscal year ended 2016. But she sent a cheque of 20,000 dollars to Canadian Revenue Agency, hence all these adjustments have been performed.

After all these adjustment, a basic balance sheet and income statement are formulated in order to provide a better understanding about the financial position of the company to its potential investors. Some figures like equity, revenue for the year and retained earnings have been taken directly from the preliminary trail balance; hence the basic financial statements formulated for the fiscal year 2016 ended at 31st March.

Public Listing Requirements

Firstly the company should have sufficient resources, assets and revenue streams in order to meet the requirement of the market whom in which company wants to go for IPO therefore setting a market and qualifying the requirements of that market with respect to public listing is a critical aspect for company as well as for the market.

Going for public listing requires compliance with accounting requirement sets by the major accounting bodies. Currently the company is following the procedures of ASPE (Accounting Standards for Private Enterprises). It is expected that in order to go for public listing Hawk Holdings Limited should formulate its financial statements according the International Accounting Standards or International Financial Reporting Standards which demands greater transparency and greater notes to the financial statements...............................

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