Task I. February 29, 2011
Attn: Audit Committee of the Board
From: Finance Director
This report will provide an overview of the financial condition and performance of Bestwish. The report will feature analysis of each of the four accounting statements, along with a comparison with 2009 performance.
The income statement analysis reveals that on balance, 2010 was a slightly better year. There are a few figures that skew the 2009 statistics and make it a difficult year to compare with 2010. While 2009 saw Bestwish record a net loss of $33.6 million, compared with a $7.3 million profit in 2010, the loss is entirely the result of losses on discontinued operations. In fact, the profit on continuing operations was lower in 2010. However, that figure is also skewed by an exceptional profit arising from acquisition in 2009. Not to discount either the exceptional profit nor the costly writedown on discontinued operations, but the underlying operating metrics show a slight improvement year over year for Bestwish. The revenue increase was only 1.2%, but cost controls allow us to record an operating profit improvement of 6.8% in 2010. Thus, the company's ongoing operations performed better this year than last. The big issue on the income statement is that most of our revenue comes from mature and declining businesses. There most important revenue category, the developing businesses, delivered the lowest revenue of any category last year. That might change as we have businesses