REPORT ON FINANCIAL STATUS,(SANITIZED)

• Document Type: CREST
• Collection: NGA Records (Formerly NIMA)
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78B04747A002700030039-8
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 2
• Document Creation Date: December 28, 2016
• Document Release Date: May 3, 2011
• Sequence Number: 39
• Content Type: MF

Sanitized Copy Approved for Release 2011/05/03: CIA-RDP78BO4747AO02700030039-8
Utfi`W9 JuLeI t I"%-
HMMMU Pep: Chief, Procurement 1)ivieion/01.
ATTENTION : Chief, lndu, triel Contract Section
sul? acr :
1. During an audit of a price re-detominstion contract, again reviewed
the subject contractor's financial condition, which remains weak . norro ing
has i.nereeased to the extent that et 30 April 1964, the outstanding tank loan
& "muted This note to renegotiated every tenth on the bas is
of the tenets Ctor'e requir nts and is secured by its current ascots. It is
our opinion that the current assets are overstated, because of the following:
a. As at 30 April 1964 tinbilled Accounts Receivable of
very RUS In doubt. especially an a current basis.
We consider the c o l l e ac t i b l i t y of this claim to be
these accounts are also overatatad beesuse the contractor
debits tben an the basis of estimated peraentags of completion of
*=tracts. The terAency has been to overestimate the perceante a of
cosplet ton .
b. The inventory valued a at 30 April 1#,
tanludea a substantial amount of development costs vhick cannot be
properly considered current acute and which ore of questionable
value. The inventory also contains the coat of psoduexticn of
certain products, for which to date, no established matkst exist...
It is difficult for these reasons to evaluate accurately the
inventory.
2. Because, of the eevarstatesaent of the current asset. ye believe it
questionable as to haw long the bank may continue to advance funds. Tba out-
ride tatvsstors are requesting an audit by a larger aocoasuting firm.. If this
audit tales pine, the new accounting firm night be son reluctant to certify
the sentractor's financial statements.
Ian F 1ENT1Al
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Sanitized Copy Approved for Release 2011/05/03: CIA-RDP78BO4747AO02700030039-8
 Sanitized Copy Approved for Release 2011/05/03: CIA-RDP78BO4747AO02700030039-8
3. The contractor's profit for the year will probably be arbeat
On sales oi' this eo stitutas a return of only 3' . Sales for t
year haw: imcraa about MS. Despite the iacraaaa to sacs, ovsr*a1 and
feral and ad iatstaretiw expense allocation rags continue to rigs, and
profit base deaeraasa,l.
S. 081a additional capital is invaatad in this 4a" any its financial
position arill# 1* ash Opinion,, centimue to be preaarioias.
Orbiit
Sfdustrial Cootvaet A%dk Division'
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Sanitized Copy Approved for Release 2011/05/03: CIA-RDP78BO4747AO02700030039-8