...Page 23 TRANSFORMATION FROM WITHIN: THE CDBG CASE Scott Johnson, Northeastern State University David Kern, Northeastern State University Katie Haight, Northeastern State University Ryan Haight, Northeastern State University CASE DESCRIPTION This case is designed for the study of leadership and organizational change within a unit of a larger organization. As such it provides an important learning experience for students who are already managers or who aspire to that level of responsibility. The primary learning opportunities address building a vision at the unit level, restructuring for success, overcoming resistance to change internally and across other units of a larger corporation, building support with powerful sponsors, and the importance of communication and persistence where authority is limited. The case has a difficulty level appropriate for undergraduate seniors and graduate students, and is designed for courses addressing organizational change, leading change, and leading teams. It can be covered in a one hour class. Preparation for the case is expected to require 3-4 hours. CASE SYNOPSIS The case begins with the recognition by a senior vice-president that the inadequacies of a seemingly insignificant compliance unit could jeopardize the overall growth strategy of BOKF, a large regional bank holding company. Paula Bryant-Ellis agrees to take on the transformation of the CRA department into a modern Community Development Banking Group (CDBG) that ...
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...with liquidity ratios in a company, Smith Corporations wins this one. Smith Corporation has a current ratio of 2.5 times compared to Jones’ who is 1.5 times. This can be misleading though since it includes inventory, which cannot be converted into cash fast enough to pay the company’s bills. Smith also has a higher quick ratio (1.5 times) compared to Jones’s who is only 1 time. The quick ratio means that Jones’ can only pay its bills 1 time with their assets that can be quickly converted into cash. Jones Corporation only have 20,000 of cash to pay its accounts payable which is 100,000, while Smith has its cash and marketable securities which totals 42.500 to pay its accounts payable which is 75,000. One could argue that Smith has benefited from having its debt primarily long term rather than short term, but as a credit manager for a supplier, I would still choose Smith Corporation since it seems like they have better liquidity ratios. b) Stockholders are usually more concerned about profitability, and in this category, Jones Corporation has better ratios than Smith. Since Smith has a larger use of debt, their return on equity is higher than Jones’. The reason why their return on equity is higher than Jones’ is because they have taken more financial risk. Jones has its interest and fixed charges under control and its long-term ratios are better then Smith’s. Jones Corporation have a total asset turnover at 2.5 times compared to Smith Corporation which is a little bit lower at 2...
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...22) of Financial management: Principles and applications . (22-1. What additional factors are encountered in international as compared with domesticfinancial management? Discuss each briefly.) See Above Questions... Select a Virtual Organization using the student website. Assume your organization is privately held, wants to expand operations, and is faced with three options for expansion: • Going public through an IPO • Acquiring another organization in the same industry • Merging with another organization Prepare a 1,050- to 1,400-word paper in which you compare and contrast options and make a recommendation about which strategy the organization must choose. Address: • Strengths of each approach- • Weaknesses of each approach - minimum of 350 words 22-1. What additional factors are encountered in international as compared with domestic financial management? Discuss each briefly.- 22-2. What different types of businesses operate in the international environment? Why are the techniques and strategies available to these firms different?- 22-3. What is meant by arbitrage profits?- 22-4. What are the markets and mechanics involved in generating (a) simple arbitrage profits, and (b) triangular arbitrage profits?- 22-1 When comparing the Domestic Financial Management with International Financial Management, the most important factor is Exchange Rate. Exchange rate arises between a domestic company (DC) and a multi-national corporation (MNC)...
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...Running Head: AN INTRODUCTION TO FINANCIAL MARKETS | | | | | | |Susana Silvestri | | |Grand Canyon University | | |FIN-350 | | |June 12, 2011 | | | | |a. A household’s current savings includes its current purchases of corporate stock as well as prior holdings of | |corporate stock and its current investment includes the equity it currently has in its house. ...
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...Caribbean corporate financial community and the associated benefits as it relates to the business strategy and financial performance. Historically, corporations were expected to serve some public purpose as justification for the benefits and privileges they receive. However, since the 1970s, the view has become widespread that corporations exist solely to maximize profits and to increase shareholder’s wealth and for no other purpose Bartlett (2015). In a capitalist society it is rare to hear that one has gone into business for reasons other than to make as much money as possible. Based on this capitalistic...
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...of Business Financial Environment Boeing is the leading industry in commercial planes, military aircraft and defense, space and security systems. The chief executive officer (CEO) for Boeing is W. James (Jim) McNerney, Jr. Mr. McNerney is 62 years old, and oversees the world's largest aerospace company and a top U.S. exporter. Mr. McNerney has a B.A. from Yale University and an M.B.A. from Harvard University. Boeing is based out of Chicago and worth over $68.7 billion dollars. Mr. McNerney manages over 170,000 employees across the United States and in 70 countries. Mr. McNerney was also the chief executive officer for 3M, a global technology company worth over $20 billion dollars; president and CEO of GE Aircraft Engines and Lighting, GE Electrical Distribution and Control; president of GE Asia-Pacific and executive vice president of GE Capital. Mr. McNerney also worked for Procter & Gambles. Boeings chief financial officer is Greg Smith, who is also the executive vice president. Mr. Smith is 45, has been with Boeing for over 20 years and has extensive operational and financial experience. Mr. Smith has a B.A. from Massachusetts Institute of Technology and Operational Management from Harvard. Mr. Smith recently served as Boeings Corporate Controller and Vice President in the finance department of Boeing. Mr. Smith job is to ensure that Boeings financial disclosures were transparent and efficient to the board of directors’ audit committee. Mr. Smith started his career...
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...these scandals resulted in the Sarbanes-Oxley (SOX) Act in 2002. Richard M. Scrushy and HealthSouth Corporation were the first CEO and company to be indicted under the SOX Act. HealthSouth was charged with filing false financial statements with the SEC to hid poor financial conditions from Wall Street. An audit conducted by PricewaterhouseCoopers concluded that HealthSouth overstated its cumulative earnings between $3.8 billion to $4.6 billion (Weld, Bergevin, & Magrath, 2004). Although Scrushy was charged with 85 counts, he pled not-guilty, claiming that he was unaware of the fraudulent activities that had occurred. Scrushy was later exonerated as the investigation into the company found no evidence that Scrushy orchestrated or participated in any financial wrongdoings. Five financial executives and 10 other company officials pled guilty to a variety of charges. Background Richard M. Scrushy founded Amcare, Inc. in 1984. The company opened its first facility in Little Rock, Arkansas and one year later opened a facility in Birmingham and changed its name to HealthSouth Rehabilitation Corporation (HRC). In 1986, HRC went public with its initial public offering (IPO) on the NASDAQ stock exchange (HealthSouth Corporation, 2010). In 1988, HRC moved to the New York Stock Exchange and by 1990, the company had over 50 facilities across the United States (HealthSouth Corporation, 2010). HRC expanded rapidly in just a few years after moving to the New York Stock Exchange. In...
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...Smith Systems Consulting – City of Kelsey Smith Systems Consulting – City of Kelsey Starting his small business in Kelsey, Blair Smith, founder of Smith Systems Consulting, Inc., has recruited several employees from the town to work as technology consultants for his thriving business. Smith Systems Consulting serves the City of Kelsey for the majority of its information technology needs. Transportation, manufacturing, retail, education, financial services, and healthcare are industries that are clients for technology services of Smith Systems Consulting. The company recognizes its strengths as including providing development solutions to business information processes; integrating business process technology services and support; strengthening existing business processes by the practical application of new technologies; and providing business relevant analysis, design, development, and implementation services in information technology areas of: networks and communication, database, and application programming. Community Involvement and Responsibility The community responsibility Smith Systems Consulting provides to the City of Kelsey is to maintain all the city’s information technology needs by establishes and supporting networks, databases, applications, and websites. All are imperative in today’s technologically advancing world for success of a corporation. Some of the companies that Smith System Consulting serves in the City of Kelsey include Riordan Manufacturing, Huffman...
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...to my understanding that Mr. John Smith will be the source of capital in this joint business venture. Mr. Smith, a retired man, is concerned with protection from liability for the sake of his personal assets and belongings. Taxes are not a concern as long as they are paid and protection keeps him behind some form of veil. On the other end of the spectrum, we have the younger Mr. Juan Gonzalez. Mr. Gonzalez does not have much in the way of investments nor does he have any personal assets that would be much at risk. Mr. Gonzalez is more concerned about taxes and with obtaining as much profit as possible with no minimal attention to risk, understandably so. It’s best to take these drastic views and ideologies and reach some semblance of a compromise between both parties in terms of which business entity should be agreed upon. To commence, it would be best to eliminate superfluous options from the get go. Sole proprietorship is out of the question simply because of its inherent definition. A “partnership” will also not be considered, because although it offers several tax breaks and the potential to be more easily managed, it has an unlimited amount of liability risk. If for any reason there were ever a dispute and the business were to be sued, the pursuer of the suit will be able to directly aim for the personal assets of the business owners, not just the business. This ever looming cloud would be an unnecessary burden that both Mr. Smith and Mr. Gonzalez would not want to...
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...You Decide: 1. Outright purchase of Smithon stock: a. Should Mr. Jones purchase the stock of Smith outright, leaving Smithon intact? What about issuing debt in his Johnson Services company to pay for the Smith Company – would that raise debt to equity issues? NO, Mr. Jones should not buy the stock. A stock purchased would result in Mr. Jones acquiring the assets, liabilities and also would inherit the contractual obligations of the selling corporation. I would not advice Mr. Jones to buy the stock because he will be liable for any current and future tax obligations that the selling corporations had before sale. The tax basis of the selling corporation will not change and the tax aspects will also remain the same. The methodology and tax year will not change which means that Mr. Jones cannot change the financial period to end in December 31. Failure to change the legal entity is not advantageous to the buyer because he is limited to adhering to the current tax basis on Smithon’s assets even if he had paid more for the assets. Issuing debt in Johnson Service Company to pay for the Smithon Company would raise debt equity ratio issues. Issuing debt would increase the amount of liabilities owned by the organization to compound the fact that it is already operating at a loss. Issuing debt would result in ratio that is over or close to unity indicating that the company’s assets are being financed by debt. High debt equity ratio indicates that the organization is risky and is financially...
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...the impact of cyber crimes on organization supply chain functions, and steps taken to improve supply chain security. Cyber crimes include, but are not limited to, piracy, implanting viruses, netspionage, and credit card fraud. During these times, it is getting easier and easier for computer hackers and frauds to gain access to confidential information from anybody. It could be passwords and social security numbers of individuals, to databases and network systems of large corporations. For businesses, the main supply chain areas at risk are the processes and controls for various departments, such as human resources, finance and accounting, procurement, and marketing. One of the processes at bigger risk is procurement. Majority of companies use other businesses outside their own, like manufacturers and distributors, as part of their purchasing process. All this information is stored in the company’s computer system, and “the need to procure materials…through a network…exposes an organization to network risk” (Smith, Watson, Baker, and Pokorski, 2007). This kind of risk can cause serious damage to the company’s assets, transactions, and reputation. Even worse, a company “may lose the confidence of customers who worry about the...
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...memo to: | Mr. & Mrs. John smith | from: | carol johnson | subject: | tax issues | date: | September 29, 2012 | | | | | Dear Mr. & Mrs. John Smith: After carefully evaluating your tax issues my staff and I have come to the following conclusions on the questions you presented us. 1. John Smith tax issues: a. How is the $300,000 treated for purposes of federal tax income? The $300,000 you earned is considered earned income; therefore, it should be reported as gross income on either a Schedule C of your individual income tax return or if you have reported your company as being a LLC, you can file a LLC return. b. How is the $25,000 treated for purposes of federal tax income? The $25,000 would not be reported as income. The reasons why are that the $25,000 should have been classified as an expense (client advance) on the balance sheet at the time your received it two years ago. It would not have been reported as a deductible expense following the matching principle. In the current year when the $25,000 is reimbursed, the revenue minus the expense equal to zero. However, if you expensed it in the year it was paid, the $25,000 would be reported as income on this year’s income tax. c. Determination regarding reducing the taxable amount of income for both (a) and (b) above? You can make use of an LLC reporting as an S Corporation where wages that are paid to the shareholder may be less than the $300,000. The regular income tax rates will apply...
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...AP stands for “Additional Problem.” “AP21” is additional problem 1 from chapter 2. The additional problems for the Markets material is after the AP for chapter 12. Chapter 2 AP21 When is revenue recognized by a corporation? When the corporation designs a project. When the corporation mass produces a product. When the customer orders a product. When the product is delivered to the customer and the customer promises to pay When the customer fulfills his promise in item #d above by paying the cash to the corporation. When the corporation receives a cash deposit from a customer for a product to be delivered next month. When the right of return expires. The corporation sells thousands of small lawn mowers. Answer d. When the product is delivered to the customer and the customer promises to pay Explanation: The FASB’s definition of a revenue is “Inflows or other enhancements of assets of an entity or settlements of its liabilities during a period from delivering or producing goods, rendering services, or other activities that constitute the entity's ongoing major or central operations.” A common-sense explanation is that revenue is recognized when it is “earned and receivable.” Delivery is normally the time period in which revenue is recognized. There are three exceptions. If the collection of cash is highly uncertain, revenue is recorded at the time cash is received. If the level of returns is highly uncertain, revenue is recognized when the right to return...
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...I. Introduction Globalization coupled with technology has dramatically altered the competitive landscape of corporate America. As corporations fight for scarce resources, and savvy consumers equipped with greater knowledge through the World Wide Web gain bargaining power, the necessity for big business to improve supply chain management procedures has intensified. The explosive growth of emerging markets like China and India creates both opportunities and challenges in transporting goods and services. The businesses that can leverage technological advances are in a position to garner market share and add value to their shareholders. FedEx has become a world leader in the parcel delivery business. The name FedEx evokes thoughts of getting packages to customers the next day. FedEx now is used as a verb to tell customers that a shipment will be sent so that it is received the next day. Delivering a product on-schedule is the result of multiple business processes working seamlessly to create a Value Chain that yields a firm greater profit over costs (Dess, Lumpkin, & Eisner, 2007). A primary activity of the Value Chain is Supply Chain Management (SCM). Supply Chain Management is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer ((2006). Supply Chain Management Retrieved April 24, 2007, from http://searchcio.techtarget.com/sDefinition/0,,sid19_gci214546,00.html ) Running...
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...CHAPTER 1 Introduction to Financial Management I. DEFINITIONS Topic: CORPORATE CONTROLLER 1.The corporate officer generally responsible for tasks related to tax management, cost accounting, financial accounting, and data processing is the: A) Corporate Treasurer. B) Director. C) Corporate Controller. D) Chairman of the Board. E) Vice President of Operations. Answer: C Topic: CORPORATE TREASURER 2.The corporate officer generally responsible for tasks related to cash and credit management, financial planning, and capital expenditures is the: A) Corporate Treasurer. B) Director. C) Corporate Controller. D) Chairman of the Board. E) Vice President of Operations. Answer: A Topic: CAPITAL BUDGETING 3.The process of planning and managing a firm's long-term investments is called: A) Working capital management. B) Financial depreciation. C) Agency cost analysis. D) Capital budgeting. E) Capital structure. Answer: D Topic: CAPITAL STRUCTURE 4.The mixture of debt and equity used by the firm to finance its operations is called: A) working capital management. B) financial depreciation. C) agency cost analysis. D) capital budgeting. E) capital structure. Answer: E Topic: WORKING CAPITAL MANAGEMENT 5.The management of the firm's short-term assets and liabilities is called: A) Working capital management. B) Financial depreciation. C) Agency cost analysis. D) Capital budgeting. E) Capital structure. Answer: A Topic: SOLE PROPRIETORSHIP 6.A business owned by a single individual is...
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