Excerpts from the annual reports of Blount, Inc., Penn Central Corp. and Quaker Oats. Shows inventory valuation changes from FIFO to LIFO and from LIFO to FIFO. It is intended to encourage discussion of cost flows assumed through inventory accounts, changes in accounting practices, the role of auditors, and the financial reporting strategy.
The management of a company with extensive palm oil plantations questions the benefits of the IASF1 requirement to value oil palm trees at fair value for management and investors.
Discussion questions for case BAB372.
Describes CUC’s initial response to investors’ concerns about the company’s accounting records. Students are asked to rate this answer.
Service business partners are reviewing the 2006 results and wondering whether projects large or small are more profitable. Existing reports make small projects seem more profitable. Activity-based accounting, however, shows that large projects are more profitable and that concentrating sales efforts on large projects offers potential for more profit in a service business.
Narayana Hrudayalaya (NH) has grown into a multi-specialty health city in Bangalore and has grown to twelve locations across India. The hospital plans to build 300-bed secondary care hospitals in smaller cities in India with the goal of operating 30,000 beds in seven years, making it comparable to the largest hospital chains in the world. …
Inventories are one of the basic investments that a company must make. Businesses that sell tangible products typically need to keep a few units in stock to fulfill customer orders. These units are sold at a higher price than their original cost, which generates a profit. Obviously, financial accounting should reflect such an important economic …
The case involves understanding and comparing the performance of two leading retail companies, Ahold and Tesco. The case features the Dupont and Modified Dupont Decomposition tools. While the return in terms of return on equity was similar for the two companies, Ahold performs significantly better on the stock market compared to Tesco. Ahold also has …
In January 2001, Odyssey Healthcare CEO Dick Burnham and Odyssey’s board of directors considered selling the hospice business to a major provider or going public (IPO). With 38 hospice locations in 21 states, Odyssey has cared for the terminally ill since opening its first location in 1996. Since then, the company has grown rapidly through …
Sensormatic is a leading provider of retail security systems. The company relies on customer financing as an integral part of its strategy. The company’s growth strategy and accounting are under attack from short sellers and the financial press.