What services does Netsuite provide to its customers?


Read the Netsuite case in your Harvard Course Pack.

Answer the questions below and post your file to this link. NOTE: This is a substantive assignment. Each

question should be 250-300 words. Question #4 requires computation based on financial statement data

that can be found in the case Exhibits.

1. What services does Netsuite provide to its customers? What is the company’s business model? How

does the company generate revenue streams? What are the key success factors in the company’s

business? Will these be observable from the company’s financials?

2. How successful has Netsuite been recently (in the case)? What is your assessment of the company’s

financial performance? Its cash flow performance?

3. Are Netsuite’s revenue recognition policies in according with GAAP?

4. Using financial statement information, reconstruct the transactions made in 2013 by Netsuite with respect

to commission costs. Are Netsuite’s accounting methods for capitalizing and amortizing commission costs

in accordance with GAAP?

Netsuite has been criticized for the accounting methods in #4 above. Critics say these methods

distort actual financial performance. How should Netsuite respond, if at all.

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