BU8101: Cambridge Space Systems Plc Developed and Manufactured Small Rockets and Space Systems: Accounting Assignment, UOL, Singapore

Case Study: Cambridge Space Systems Plc

Company Background

Cambridge Space Systems plc developed and manufactured small rockets and space systems for commercial, military, and civil government customers, including the U.K. Department of Defense, the U.S. Department of Defense, the National Aeronautics and Space Administration (NASA), as well as other U.K. government agencies. The company’s primary products and services included the following:

• Launch Vehicles. Rockets used as interceptor and target vehicles for missile defense systems, small-class space launch vehicles that place satellites into Earth orbit, and suborbital launch vehicles that place payloads into a variety of high-altitude trajectories.
• Satellites and Space Systems. Earth-orbiting satellites, interplanetary spacecraft, and related systems for communications, remote sensing, scientific and military missions, satellite subsystems, and space-related technical services.
• Transportation Management Systems. Software-based transportation management systems for public transit agencies and private vehicle fleet operators.

Review the case study “Cambridge Space Systems plc” provided in the Assignment Folder and answer the following questions:

(a) Assess the company’s growth, profitability, leverage, and asset management in 2007 and 2008. (500 words)

(b) Prepare a cash flow statement for 2008 to determine how much cash flow the company generated in 2008 and how it was used. (100 words)

(c) Consider the information in Note 13 in Exhibit 1 in the case to determine if the company will be able to meet its debt service obligations in 2009. (200 words)

(d) The management of Cambridge Space Systems plc is considering to adopt the activity-based costing system. With relevance to the prior literature and empirical studies, advise the management on the following:

• critically evaluate the extent that ABC can be used and how it can be incorporated in the budgeting process for the firm (1,200 words)
• the factors, both short-term and long-term, to consider if ABC is implemented in the firm chosen (500 words)