This paper will compare and contrast the 2015 Annual Report for Booz Allen Hamilton (BAH), Incorporated and the financial statement concepts that are presented in the textbook Accounting for the Rest of Us (Hicks & Hicks, 2014). BAH is a strategy and technology consulting firm that has been operating for over 100 years and primarily serves the federal government. It was a private company for the majority of its existence, but began public trading in 2010. The 2015 Form 10-K revealed that the company is financially stable, despite challenges due to the high risk dependence on Congressional budget constraints that includes Department of Defense sequestration. The company uses General Acceptable Accounting Principles (GAAP) along with some
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However, much of that success occurred while it was a private company. Still, since becoming a publically traded company, and since the across-the-board sequestration budget cuts in the Department of Defense, BAH has relatively stable financial health. The Form 10-K reported a 3.9% decrease in revenue, balanced with a decrease in in expenses, which resulted in an overall increase of .02% for net income in 2015. This is significantly lower than the 6% net income change from 2013 to 2014. The stock values are higher than they were in 2014, and the return on stocks has shown a relatively stable gain since 2010. Of concern is that assets are not much more than equity, and there are a high level of intangible assets as compared to tangible assets. There has also been only a slight decrease in both short-term and long-term debt between 2014 and 2015. Since BAH is a consulting company, there is no inventory to be used as a …show more content…
Since the revenue is contract-based, the first tables included revenue by contract type along with expiration dates for those major contract vehicles. It segmented the contract revenue further by specific task orders. BAH described another measurement called “backlog” that was defined as “the revenue value of orders for services under existing contracts for which funding is appropriated or otherwise authorized” (Booz Allen Hamitlon, Inc., 2015, p. 14). Backlog funded and unfunded is used, since many contracts are funded incrementally. In my experience, backlog funded is simply the actual amount of funds left on a contract for labor, other direct costs, and fees,
However, much of that success occurred while it was a private company. Still, since becoming a publically traded company, and since the across-the-board sequestration budget cuts in the Department of Defense, BAH has relatively stable financial health. The Form 10-K reported a 3.9% decrease in revenue, balanced with a decrease in in expenses, which resulted in an overall increase of .02% for net income in 2015. This is significantly lower than the 6% net income change from 2013 to 2014. The stock values are higher than they were in 2014, and the return on stocks has shown a relatively stable gain since 2010. Of concern is that assets are not much more than equity, and there are a high level of intangible assets as compared to tangible assets. There has also been only a slight decrease in both short-term and long-term debt between 2014 and 2015. Since BAH is a consulting company, there is no inventory to be used as a …show more content…
Since the revenue is contract-based, the first tables included revenue by contract type along with expiration dates for those major contract vehicles. It segmented the contract revenue further by specific task orders. BAH described another measurement called “backlog” that was defined as “the revenue value of orders for services under existing contracts for which funding is appropriated or otherwise authorized” (Booz Allen Hamitlon, Inc., 2015, p. 14). Backlog funded and unfunded is used, since many contracts are funded incrementally. In my experience, backlog funded is simply the actual amount of funds left on a contract for labor, other direct costs, and fees,