Resources Unlimited Candace Dowling

Case Study Baseline profits from 1986-1988 Gas Accounts in 1990 How salaries were determined for entry level management Gas accounts transferred to ward off bankruptcy Appropriate raise for female accountant

Background Resources Unlimited is a natural oil and gas company After the company merged problems arose with profits and gas lines Resources Unlimited had become deregulated and prices began to sway uncontrollably Supply and Demand were very inconsistent and unpredictable The outlook from the President didn’t see these issues as problems, but opportunities Many potential problems were never addressed In June of 1994 Resources Unlimited entered into bankruptcy

Quarterly Profits

Profit Analysis From 1986-1988 the quarterly profits in millions were: 342,267,321,157,33,349,132, & 289 Mean=236.25 Standard Deviation=107.97

Accounts In 1988 there were 32 gas accounts and 64 oil accounts In 1990 86 oil accounts were projected In 1990 according to the oil accounts there should be 43 gas accounts projected Average increase per year: Gas accounts increased 5.5/year and Oil accounts increase 11/year

Gas and Oil Accounts

Wages and Discrimination If there is more than two standard deviations from the mean salary from others in a job, it could potentially be considered discriminatory Three males wages= $50,000, $55,000, and $52,000 Mean=$52,333.33 Standard Deviation=2054.80 Mean-2(standard deviations)=$48,223.73 $48,000.00 approx. is the salary in which the female accountant should be making in order to potentially not be considered discriminated against

Salaries

Conclusion Five hundred gas accounts weren’t producing enough revenue to maintain the cash flow for thirty days After sixty days, the CEO adjusted (on paper) gas account to a hedge fund hoping it would lessen cash demands CEO tried to buy time to satisfy creditors and Wall Street analyst This action was a failure Resources Unlimited entered bankruptcy