Sales for the last quarter increased significantly. For the three-month period ended June 30,2006, sales were only for $176,401; for the three-month period ended June 30,2007, sales were $318,945. This was an increase of 80.8%. Their selling, general and administrative expenses increased from $83,036 to $113,986. These expenses increased by 37.2%, a rather large amount. The total amount of selling expenses probably increased due to the increased amount of sales. In spite of this, the cost of good sold amount in their income statement does not follow the same pattern. Their cost of goods sold changed from $26,799 to $28,701. This was only an increase of about 7.1%. Even with such a large increase in sales, their cost of goods did not increase as dramatically as their sales amount.
Turning to their balance statement, the figures presented also raise some issues. Celgene’s total current assets were $2,695,399 and their total current liabilities were $607,976. Celgene’s net working capital is $2,087,423. Such a large amount of net working capital shows that Celgene has enough to cover its liabilities. Management is then less likely to play with their numbers to produce better results for their company. Even with the significant increase in sales, the corporation’s accounts receivable did not significantly increase also. Accounts receivable was $127,777 and only increased to $145,654, a small amount. This shows that the company did not change their credit policy, and did not start making reckless credit sales. This shows that management was not looking for an easier way to increase their performance. Their allowance for doubtful accounts, however, decreased from $6,625 last year to $5,947. This raises some issues with their good performance in their ne ...