CFO Robert Garcia of Hill Country Labs, Inc. had not anticipated the surprise and concern expressed by Isabella Sedge, the company’s CEO, during their initial meeting to begin the review of the 2020 financial results for the company. With actual net profit for 2020 slightly above planned profit, and actual net revenue almost $1 million above planned revenue. Garcia had expected a more favorable reaction from the CEO. Instead, she responded by asking, “What’s been going on? How did we manage to do a million dollars more business without generating significantly more profit? Don’t we know how to manage our expenses? Garcia readily acknowledged the relevance of Sedge’s question but stated that he had just finished compiling the 2020 results and had not yet had time to “get behind the numbers”. He assured her that he would have some answers when they met the following week. Between now and then, Garcia knew he had a lot of work to do.
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