...This case is an exercise in understanding company financials. There are many criteria to be understood when matching a type of company to the correct financial report. The first approach was to pull out the service companies. They are determined by having no inventory. Then, inventory turnover was reviewed. It could be expected that chain stores, restaurants and grocery stores would have a fairly high turnover. Another characteristic that was assessed was the accounts receivable and collection periods. It was determined that wholesale companies would have a higher collection period than retailers. The first of the service industry matched was the advertising agency with Company E. This was recognized for reasons beyond zero inventories. Because advertising companies usually get paid when the project is complete, they have higher collection times. This type of company also has a higher percent of other assets because this is the category where commissions fall. Another characteristic matching these together is that the payables and receivables are very close, 39 to 37 respectively. This would be likely for an advertising agency as it would be making purchases on the customer’s behalf. The HMO company fits with Company G. Again, there is no inventory. They also have low plant and equipment. They really only need some office space. Because they rely heavily on insurance payments, they have a high collection time. Their accounts receivable are large because they...
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...Today unexplained aerial phenomena are generally referred to as unidentified flying objects (UFO's) or flying saucers. The effects of extra terrestrial sightings can have an adverse effect on people if influenced the wrong way. No solid proof has shown that UFO's are real, but many sightings cannot be proven otherwise. The media, stories, or one's own experience may often influence what one believes. The government once stated that they had captured extra terrestrials. (60 minutes, CBS) On the contrary, most scientists now agree that almost all sightings and stories of extra terrestrials are not authentic. The United States government has records of thousands of UFO sightings since 1948, including photos of alleged UFOs and interviews with people who claim to have seen them. Since UFOs were considered a potential security risk, the report on these sightings was originally classified as secret. (Craig, 917) When the report was later declassified it showed that 90 percent of all UFO sightings could be easily explained. Most of the sightings turned out to be celestial objects, such as stars or bright planets like Venus, or atmospheric events such as auroras or meteors falling through the atmosphere. Many other sightings turned out to be objects such as weather balloons, satellites, aircraft lights, or formations of birds. Often these sightings were accompanied by unusual weather conditions. Only 5.6 percent of these cases were not explained. Testimonies by people are often very inaccurate...
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...9-207-096 REV: APRIL 10, 2008 The Case of the Unidentified Industries—2006 Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F265469 If you were asked to visualize (in income statement and balance sheet form) the financial structure of a typical firm in one particular industry, do you think you could do it? How close to your “vision” do you think the “reality” would be? What if you were asked to do the same experiment covering 14 firms drawn from 14 different industries? How many of the 14 do you think you would get right? You may be surprised by how much you already know! Exhibit 1 presents the balance sheets (in percentage form) and other selected financial data for 14 firms drawn from 14 different industries. While there are clear differences in the financial structures of different firms within a single industry, the firms selected have figures that are broadly typical of those in their industry. Try to match the 14 firms operating in the 14 industries named below with the 14 sets of financial data presented in Exhibit 1. Use any approach you find helpful. Advertising agency (about half of total revenue derived from commissions that equal 15% of media purchases for clients) Airline Bookstore chain Commercial bank (fitted into the most nearly comparable balance sheet and ratio categories of the nonfinancial companies) Computer software developer Department store chain (with its “own brand” charge...
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...collection of someone's DNA. It helps identify what diseases someone is predisposed to and can recommend steps to help them change their lifestyle. A wide variety of genetic tests are now available to the public, some give the person’s ancestry, others can give deeper insights to their genetic code. Companies like Ancestry.com began with 2 million sales at the end of 2016, in August of 2017 they had already sold around 5 million. Genetic tests are becoming increasingly common and used more often. It is important that you understand your ancestral history, you can start by using a general genetic test. Genetic tests are very accessible to the public and the majority are very general. Many companies sell genetic tests There are over 30 companies that sell genetic tests. Some even cater to different countries. There are over 25 companies that do not sell tests anymore. The tests are very general and are not specific. General tests give the...
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...The Case of the Unidentified Industries - 1995 Solution: In order to find out the exact firm by analysing the financial structure of typical firms, first we need to separate those firms which have zero inventory turnover (A, B, F and H) from those firms which have zero debt ratio which in our case are (E, H and J) and we use the information to narrow down the possibilities of each firm. In this case there are three groups of companies: 1) Firms having zero inventory turnover. 2) Firms having zero debt. 3) Firms having all financial ratios given. 1) Firms having zero inventory turnover: Under the category of zero inventories, there are four companies. The nature of these companies show that they are not involved in any production, but they provide services to the people and from services they generate cash. Each one with the name and reason is mentioned below. Firm A. Commercial Bank: The financial structure of (A) firm shows that it has zero inventory turnover and high receivables collection period. Banks usually have a large amount of receivables because they lend money to the individual people and a company due to which the average number of days, which in this case is very high, requires to convert receivables into cash is very high. Its financial structure also shows that the firm has borrow money from outside to pay debt to its customers. Firm B. Advertising Agency: This firm has very high receivables and payables due to one reason or the other...
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...days later Ronald Wayne sold his shares in the company for $500.00 The first designed was not successful in 1976 but year later at a computer show, the designed command a lot of attention from their consumers. The two inventors designed an inexpensive method to store data on a disc, the invention increased sales. Over the years the company had significant improvements to computer technology. In 2014 Apple, Incorporated, had attained $20,624,000 in property, plant and equipment. This amount could cover varies things in the company. The cost of the building that Apple Inc, have their operation in are allocated within this asset amount. The amount included equipment such as computers software, phone, printer, fax machine etc. Basically, any equipment that help the company function as a business. In the prior year, the company lesser amount of value in building and equipment assets. This could due to the company not owning enough property, equipment that was contributing as the preceding year. Apple used straight line depreciation like 95% of other...
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...Source Complete electronic database. See LEARN for instructions. * Read: “Assessing a Company’s Future Financial Health,” Thomas Piper, Harvard Business School, May 2012. Available in AFM 211 Courseware Package; AND, * Complete ratio analysis for SciTronics in “Assessing a Company’s Future Financial Health” on pages 6-10 and use that analysis to answer questions 1 and 3 framed as “broad questions” at the top of page 6. * Try the “Case of the Unidentified Industries” in “Assessing a Company’s Future Financial Health” on page 11 and Exhibit 3. | Operating and Investing Decisions: Value Chain, Profit Model, and Profit Driver Analysis | May 15th Lecture AL 116 [6:00 – 6:50PM]Topic: Relevant – It Depends. On what? | May 19 – 23 | * Complete Online Module # 1 – Learning with Cases | No face-to-face class [Note: allocate your class and prep time to complete Online Module # 1] | May 22nd AFM 211 Exam # 1 [7:00 – 9:00PM]Location TBAExam # 1: Exercises. Document Business Model Canvas; Ratio Analysis; Identifying Unidentified Companies [see Piper article, pages 11-13]. | May 26 – 30 | * Read: “Financing...
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... Abstract This paper will discuss a case study from the text book “Project Management: A Managerial Approach.” The case is titled “The Sharon Construction Corporation.” The case consists of a construction company that has won a contract for an upcoming project. The project is erecting a 20,000-seat stadium. The case is very in-depth in regards to the different stages of the project, and the amount of time that each stage will take to complete. Within the case, there are five different proposals that are given by the management team. Each of these proposals contains ways to reduce time, and work around specific identified risks that are associated with completing the project. In this paper, I will discuss the overall project timeline, the five proposals, and identify the best solution to complete the project on time, and with the most profit possible for the company. Project Overview The upcoming project for The Sharon Construction Corporation is a project that has the potential to generate a substantial profit of $300,000. In order to maximize this potential profit, there are several risks that are associated that need to be analyzed and thought out to arrive at the most economically efficient conclusion. The first risk is the complication of the dates associated with the start and completion date. Construction on the project must start by February 15. Once the project is started, the company has one year to complete. A penalty clause of $15,000...
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...THE CASE OF THE UNIDENTIFIED INDUSTRIES The analysis of the balance sheets and financial ratios enable us to match five different industries with respect to the corresponding financial structure reflected in the balance sheet. The low collection periods make B or E either one of GM retail, or apparel. That leaves Automobile, Electric Utility and Automated Test Equipment / Systems at A,C or D. Discounted general merchandise corresponds to B. The low collection periods make it one of B or E. However, the business cannot be negatively profitable. Hence it’s not E. The fast nature of the goods being sold at the retailer gives rise to quick inventory turnover. Thus matching industry is one of B. The low margin high volume gain that is common strategy in the industry gives rise to marginal profitability (1.5%) and a higher asset turnover ratio (3.25) resulting in economies of scale and rapid growth. This puts discounted general merchandise to most closely match to B. The investment in property and equipment is also second highest, owing to the investments in real estate and tools and equipment to manage the fast moving nature of the goods being sold. Additionally, this contributes to the lowest collection periods of 4 days, since the collection is upfront against the purchase of goods. Upscale Apparel : The matching industry is E. Also, the industry faces stiff competition and companies need to innovate continuously to remain profitable. This snapshot from 2009 may be representative...
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...for providing the sniffer that Gonzalez used in the TJX hack. Watt was also ordered to pay restitution to TJX, jointly with other accomplices, in the amount of $171.5 million. Humza Zaman, a former network security manager at Barclays Bank, was sentenced to 46 months in prison and fined $75,000 for serving as a money courier for Gonzalez. He was charged with laundering between $600,000 and $800,000 for Gonzalez. Gonzalez’s sentence is among the stiffest imposed for a financial crime, and the longest U.S. prison term in history for hacking. It beats out a sentence recently imposed on hacker Max Ray Vision, who received 13 years in prison for similar crimes. Gonzalez will be sentenced in another case involving breaches at Heartland Payment Systems a New Jersey card-processing company, Hannaford Brothers supermarket chain, 7-Eleven and two national...
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...The Case of the Unidentified Industries-2006 | | In this case, a summary sheet which contains 14 sets of financial data from 14 different industries is provided. The task is to match 14 different firms with 14 industries by distinguishing the differences (e.g. sources of financing, profitability, the inventory turnover and the accounts receivable collection period) in the financial structures. 1. Advertising agency: the matching industry is E. As a service firm, it does not contain inventory, so first of all, it can be narrowed down to E, G, M, and N. And generally B to B firms provide credit terms to their customers which result in receivables collection periods(RCP) is larger than 30 days, therefore it can be further narrow to E,G,N. Furthermore, based on the given hint, the media purchase is made on behalf of the client, which means the account receivable and account payable should be roughly equal, since the agency does not pay for the media services until their client pays. 2. Airline: the matching industry is M. Similar to Ad agency, it is a service firm, so its inventory is zero as well (G, M, N), and moreover, it is also a Business to Customer firm, its RCP is relative short(less than 30 days), so only M (RCP=12) is left which matches the description. 3. Bookstore chain: the matching industry is B. Retail firms like bookstore chain are likely to have shorter RCP (less than 30 days), which means only A, B, H, I, K and M match this description. Furthermore...
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...Fraudulent activities and acts of compromise to business ethics are primary reasons behind the loss of billions in potential earnings to companies. These cases flourish due to lack of an efficient tracking system of these illegal acts. In most instances, these businesses are forced to shut down their running activities due to cases of insolvency which often leads to bankruptcy. The management system is not capable of detecting cases of being cheated on by other illegal businesses and at times it occurs within the organization despite existence of well formulated laws that are designed to prevent liability and unethical performances in the business sector. The Board of Directors of the company in conjunction with their audit engagement team should act swiftly in responding to fraud allegations by addressing key areas of fraud. The first step is gathering all the relevant information that relates to the case. The actions and behavioral attitudes of the top management officials should be looked into. It entails their responsibilities to matters relating to active running of the business. This is achieved by conducting an overview of their integrity and organizational ethical values. In Jersey Johnnie’s case, they should identify all the circumstances that led to the allegations by the unidentified caller and ascertain if any member of the management was involved. The management must apply the top-down approach starting with the top management governors. This method analyses the...
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...involved. In this memo, I will identify the legal risk and opportunities of Span Systems and Citizens-Schwarz (C-S), address how managers can avoid risk with contract issues, minimize liabilities, and benefit from additional opportunities identified. Span Systems and Citizen-Schwarz AG (C-S) entered into a 1 year contract worth $6 million and if Span Systems can deliver on this contract our company stands to gain an even bigger contract for C-S’s e-CRM order, which is coming down the pipeline, however, in order for us to secure this contract our company must meet and exceed performance standards with the current contract. Currently our proceedings concerning our contract with Citizen-Schwarz (C-S) has not gone as planned and Leon Ther, C-S’s lead negotiator has demanded immediate transfer of all unfinished codes and threatened the rescission of the contract based on claims of deliverables low on quality and the project being behind schedule (University of Phoenix, 2010). Many of the claims Span Systems face have been the direct result of C-S’s change in project management and the unidentified scope of the project. Unfortunately, the contract signed by both parties included...
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...Case analysis of Unidentified Industries--2006 Although different industries have their own characteristic, we can see some common features in certain industries. Thus we divide them into 4 kinds: Service, retail trade, manufacturer and online seller. List as below: Classification of Different Industries and their features 1. Service (Table 1) Advertising agency (AG) Commercial bank Health maintenance organization (HMO) →Their services are based on human resources. They do not need a lot of PP&E or inventories and lots of money (like long-term debt). Since they provide their service first and the customers always pay at the end of the service, their account should be high. So now we want to find an industry that is zero inventories, low PP&E, high accounts receivable and low long-term debt. See the table 1, we find E, G and N each has a very high accounts receivable, low inventories and PP&E. It shows that they are all service industries. Now we have to look deeply to find the difference among these three industries. First, N has an extremely high accounts receivable (90%) and the longest receivables collection period (4,071 days). And their biggest part of liabilities is notes payable. It really meets the features of Commercial bank. So N is Commercial bank. What the different between E and G? We find that their percentages of balance sheets are almost the same. So we have to find some clues from selected financial data. It shows that their Receivables...
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...Enron Company Enron chief financial officer set up and managed several partnerships that did business with Enron. Enron board of directors waived the firm's conflict-of-interest rules to permit this. Bad accounting for the partnerships allowed Enron to keep billions of dollars of debt off its balance sheet and to hide hundreds of millions of losses. The partnerships paid Enron's CFO more than $30 million in addition to his regular compensation. Board members were shocked to discover this when they investigated the partnerships. And when the truth about Enron's true debt obligations was revealed, Enron went bankrupt. (Emery, D., Finnerty, J. and Stowe, J., 2007) AGENCY COSTS Monitoring, constraints, incentives, and punishments are designed to push agents to act in the principal’s best interests, but they are costly. The costs of doing these things are called agency costs. Agency costs are the extra costs of having an agent act for a principal, those in excess of what it would cost the principals to “do it themselves.” These costs are like friction in a machine – the more there is, the less efficient the machine, and the more energy that will be wasted. Agency costs are defined in terms of the Principle of Incremental Benefits: The agency cost is the incremental cost of working through others, who serve as agents. In a perfect world, the agent would be paid exactly the fair amount without any waste. In our imperfect world, agency costs are a waste that is lost to the system...
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