Revenue and Expense Recognition at salesforce.com Harvard Case Solution & Analysis

Andrew Ferris, a financial analyst at Southern Cross Capital LLC, has been asked to assess the salesforce.com 's accounting practices and financial performance in the last preparation for the portfolio manager's decision whether ordinary shares to be acquired for his foundation for economic growth. Salesforce.com was a company computer program aimed at providing customer relationship management applications (CRM) available to users in the "cloud" and not with the software resident on your own server user. Salesforce.com supports direct sales services are sold to customers on the phone and contacts through a network of geographically extended sales representatives who have made personal contact with potential customers. Direct sales was offset primarily by sales commissions that were paid in cash after the client has signed noncancellable subscription. Portfolio manager specifically asked Ferris to pay close attention to the understanding of how salesforce.com made their commission costs, as several companies in recent years experienced a significant reduction in their share prices after financial items in the press revealed that the company overstated its income transport costs. "Hide
by Graeme Rankine Source: Thunderbird School of Global Management 14 pages. Publication Date: 04 Oct 2012. Prod. #: TB0305-PDF-ENG

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