CASE STUDY

ON
SOLARTRONICS, INC.

Presented to: Mr. Govind Soni

Presented by: Modi Pooja (24)

Raval Viral (38)
INTRODUCTION:-

 Solartronics Inc. is a small manufacturer of solar energy panels.

 The company has been in business since 1977.

 Solartronics has had some bad times has grown into a good sized
company with in the solar panel industry.

 This paper will look at how john Holden, president and general
manager of solartronics may have seen in the summarized income
budgeted income statements to make Mr. Holden think that the
company would meet budgeted results.
CONT…

 Previous to that time, Solartronics had employed the services of a

full-time, full-charge book-keeper.

 The 1984 budget represented only a 10 percent increase in sales

volume over 1983, he was concerned that such a poor start to the
year might make it difficult to get “back on stream”.
QUESTION:1

 Why are the reported results for January so poor,

particularly in light of the expected, average monthly
profit of $30,000?
QUESTION: 2

 What additional data would be useful in analyzing the

film’s January performance? Why?
ANSWER
 In budgeted income statement, Operating variance such as
direct labor, direct material, variable factory overhead,
fixed factory overhead-spending, fixed factory overhead-
volume were not given according to monthly. If there are
revenue variance, selling price variance, mix and volume
variance, mix variance, volume variance, other revenue
analysis, market share variance, industry volume
variance, expense variance in the analysis statement given
then it would be useful data for analyzing the firm's
January performance because these data can inform us the
difference between the revenue and expenses.
Another aspect is Balanced Scorecard which
means strategic planning and management
system that is used extensively in business and
industry, government, and non-profit
organizations worldwide to align business
activities to the vision and strategy of the
organization, improve internal and external
communications, and monitor organization
performance against strategic goals.
CONCLUSION
 After reviewing Solartronics’s January income
statement Mr. Holden the president of the firm saw
that the company’s direct labor, variable overhead
and fixed factory overhead were not favourable.
 "The balanced scorecard retains traditional financial
measures. But financial measures tell the story of
past events, an adequate story for industrial age
companies for which investments in long-term
capabilities and customer relationships were not
critical for success. These financial measures are
inadequate, however, for guiding and evaluating the
journey that information age companies must make to
create future value through investment in customers,
suppliers, employees, processes, technology, and
innovation."