Mountain Musical Theatre Company: Making a Statement
(2 pages of text)
The Mountain Musical Theatre Company (MMTC), located in Great Falls, Montana, was an important part of the local cultural scene. For many years, MMTC had performed a wide variety of shows that had been much enjoyed by local and visiting patrons, and it would have been easy to assume that the organization was a great success. However, significant organizational and financial problems had been brewing inside MMTC. In September 2015, these problems came to a head. The organization did not have formal financial statements, and the absence of these had recently led to major disagreements between MMTC’s leadership team and its board of directors. The recently appointed board chair did not know if MMTC was making or losing money. Although she feared the consequences could be serious, the board chair needed to ensure that financial statements for MMTC were created and analyzed to determine the truth about the organization’s financial situation.
This case is appropriate for use in an introductory business or financial accounting course in an undergraduate program. It could also be useful in an introductory finance class that includes some accounting. The case provides opportunities for students to learn to interpret financial statements for decision-making and to apply this knowledge in analyzing the sustainability of a not-for-profit organization. After working through the case and assignment questions, students will be able to do the following:Develop an income statement.Develop a balance sheet.Analyze the sustainability of a not-for-profit organization based on interpretation of its financial statements.
United States, Small, 2015
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