The following information was taken from GoPro, Inc.’s SEC filings:
Fiscal Year Ended
December 31, 2014 December 31, 2013
Number of employees………………………………..970…………………………..757
Revenues (in thousands)…………..................$1,394,205…………………….$985,737
Properties (all leased)………………200,000 square feet…………..200,000 square feet
Total assets (in thousands)…………………….$917,691……………………..$439,671
Units shipped (in thousands)………………………5,180…………………………3,849
Net earnings (in thousands)……………………$128,088………………………$60,578
Required
a. Explain whether each line of information in the table above would best be described as being primarily financial accounting or managerial accounting in nature.
b. Provide some additional examples of managerial and financial accounting information that could apply to GoPro.
c. If you analyze only the data you identified as financial in nature, does it appear that GoPro’s 2014 fiscal year was better or worse than its 2013 fiscal year? Explain.
d. If you analyze only the data you identified as managerial in nature, does it appear that GoPro’s
2014 fiscal year was better or worse than its 2013 fiscal year? Explain.
e. Did GoPro appear to be using its facilities more efficiently or less efficiently in 2014 than in 2013?
SOLUTION
a. The information described in the table is primarily managerial accounting information, as much of it refers to nonfinancial measures. The disclosures are not restricted by GAAP or other regulation. The information about revenues, total assets, and earnings are financial in nature, although they are also useful for managerial accounting purposes.
b. Other examples of managerial information include operating data such as sales generated per country, number of different products sold, and the revenue generated from each of these. Financial information would include financial statements, footnotes to financial statements, and the auditor’s opinion.
c. GoPro’s 2014 fiscal year appears better than 2013 because in 2014 it had higher revenues and net earnings.
d. GoPro’s had more employees and more units sold in 2014 than in 2013, which suggest it was larger, and therefore, appears better.
e. GoPro had more employees in 2014 than in 2013, 970 versus 757, but it also had more revenue and earnings. If we calculate “revenue per employee” and “earnings per employee” for each year, we get:
2014 2013
Revenue per employee $1,437,325 $1,302,162
Earnings per employee 132,049 80,024
These numbers suggest the company used its employees more efficiently in 2014 than in 2013. The very small number of employees also suggests the company is outsourcing the manufacture of its products. It could not manufacture 5.2 million cameras with only 970 workers.