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Business Case


Submitted By harleyplastina
Words 758
Pages 4

Presented to the
Accountancy Department
De La Salle University

In partial fulfillment
Of the course requirements
In ACCTBA2 (C33)

March 2, 2015

A stakeholder is typically concerned with an organization delivering intended results and meeting its financial objectives. In general, a stakeholder can be one of two types: internal (from within an organization) or external (outside of an organization). The stakeholders in this situation are Lanie Marquez and Tim Rodriguez who are also partners in the retail distribution business and their capital contributions are as follows P500,000 and P300,000 respectively they are an internal stakeholder since they are also the owners. The total Capital of both stakeholders is P800,000 and with a monthly salary for both partners at P15,000 on the assumption that both of them will contribute to manage the business equally. Assuming that both managed the business equally the total salary for the year for Lanie and Tim are P180,000 each. They share profit and loss equally and no interest will be given on capital contributed.

The problem for this situation is that Lanie is starting to get concerned with the behavior of her other partner Tim. He only manages the business 50% of the time, which will mean that his salary of P15,000 will need to decrease by also 50% since he does not manage the business equally with his partner. The business has seen a downturn in the profit outcome and for the current financial year are also not that good. Hence why Lanie is having problems because Tim Rodriguez has increased his personal drawings by 75% from the past years. With the increase of personal drawing the Equity of the business will lead into the negatives and that isn’t good for any business owners. This reduction of equity means the business ends up with less cash or fewer assets as the result of each draw. With the increase of personal drawing of Tim the partners may need to make additional investments so that the will be able to increase its capital. With both of them owners they both already know that an increase in personal drawing is not good for their business. To have a profit in the business Tim needs to give back the drawing he made as soon as possible so that the business wont go negative on them. The viewpoint of a stakeholder is to maximize profits and enhance shareholder value which Tim isn’t doing a job at it. The business is already trying really hard to keep them afloat and with Tim too much money the business won’t last long.

Another thing that gave concern to Lanie was that Tim had weekend stay overs at local beach resorts involving family members and that he recorded it as marketing expense. He also stated that he was at the beach resort to conduct business activities if that was the case he should have told his partner about it since they are partners of the business they both own. Both of them needed to agree to this since it was a business related activity. Also he truly was to conduct business activities why did he need to bring his family with him. It will just increase the amount they needed to pay at the business resort this act is really unethical not really thought out.

His actions are already unethical spending money left and right without thinking of what is going to happen to the business in the future. This isn’t a good trait for anyone even if you are the owner of the business. Tim should have thought of what will happen before doing anything and should ask the advise of his other partner Lanie. How can any employee trust their owner if the owner doesn’t know what he is doing to his business. The business is already losing a lot of money and he just keeps spending it for his own personal gain. The thing Lanie Marquez can do is to constantly remind Tim Rodriguez that his actions isn’t acceptable and should change immediately. She shouldn’t stand for any excuse since she is the only who cares for the life of their business. Lanie must also monitor and watch over all things that Tim would do so that she can immediately disapprove any thing she seems not needed for the benefit of the business. Also if Tim does not follow their contract of the partnership should could remove Tim from the partnership and just find a better and more serious partner.

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