“Maximizing Performance and Minimizing Risk: A Strategic Analysis of Divisionalisation and Working Capital Management for GoGo Airline’s Parent Company”

GoGo Airline’s parent company is planning to take a cautious approach in launching MegaSaver. In response to the concerns raised by several shareholders, the parent company is exploring the possibilities of dividing its airline business into two distinct departments and monitoring the working capital of the new airline to prevent any liquidity crises.
The parent company has requested that you prepare a report which can enable it to make an informed decision. You are required to include the following information in the report:
Critical evaluation of the advantages and disadvantages of divisionalisation to the parent company
Explanation of various techniques the parent company can use to measure the performance of the proposed divisions and divisional managers
Explanation of the importance of non-financial measures in measuring performance
Costs associated with various elements of working capital and
Methods of controlling various elements of working capital
The learning outcome for this assignment is:
Apply established management accounting techniques to a variety of decision-making problems.