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Software
Case Study
Background
A growing privately-held software company is relocating and
significantly expanding its office space.
Issue
How sustainable is the Company's revenue growth? Is the
Company's revenue recognition policy aggressive or conservative
relative to other providers?
Analysis
The tenant derived its revenue from multiple sources:
implementation, training and annual maintenance contracts,
consistent with many providers. The Company's recognition
policy was on the conservative side and further revenue growth
appeared likely. The cash flow dynamics of its agreements
diminished the possibility of fictitious or aggressive
revenue.
Result
Subsequently, the tenant exercised its expansion option at the
new location.
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