This case introduces students to the topic of mergers and acquisitions. At the time that Microsoft purchased aQuantive there was a mixed reaction by analysts and investors on whether this transaction would increase shareholder value. Ultimately the transaction turned out to be a colossal failure, and Microsoft received a substantial amount of bad press. This case allows students to discuss firm's grow strategies (through mergers and acquisitions vs. organic growth) from both an economic perspective and through the accounting lens. The case offers an opportunity to introduce accounting for mergers and acquisitions, i.e., purchase price allocation rules, and other specific accounting issues associated with mergers and acquisitions in the internet advertising setting.
This case is designed to familiarize students with the use of financial ratios. Two retailers, Sears, Roebuck and Co. and Wal-Mart Stores, Inc., have a very similar value for return on equity (ROE) in the 1997 fiscal year. Students use the information in the case and the accompanying exhibits, which include financial statements as well as disclosures regarding corporate strategies and accounting policies for each company, to analyze the value creation process for each firm. This case provides a good introduction regarding the combination of such information to create a powerful tool for financial statement analysis. A rewritten version of an earlier case.
Bausch & Lomb (B&L) instituted an aggressive sales program in the final weeks of its 1993 fiscal year that pushed a large amount of inventories onto distributors. The company recognized revenues on these products when they were shipped. A rewritten version of an earlier case.