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In 1994, a senior lender at a West Coast financial institution must evaluate an opportunity to provide credit for a management buyout of a vineyard.The tasks for the student are to value the vineyard, assess its ability to service the proposed debt, critically evaluate the buyout terms, and recommend action for the lender.

Students evaluate the proposed terms of the Renault-Volvo merger, examining the shareholders' perspective. The case describes the unusual structure of the strategic alliance that predated the merger proposal, the motives for merging, and the expected financial synergies. This case may be taught singly or in combination with the epilogue case, "Volvo/Renault: The Contest for Shareholder Approval".

This crossfunctional case in economics and finance highlights the concerns about protection of intellectual property rights as well as competition from traditional retailers in Shanghai's prime shopping venue. It begins with the history that led to Xiangyang Market's development, and concludes with a description of the future of the market. Located at the center of the shopping district in the trendy former French concession in Shanghai, the market is considered a shopper's paradise by many foreign visitors. This open-air bazaar is known for the incredible deals on quality knockoffs of designer products. The case includes an account of the shopping experience of two American tourists, giving details of their discoveries and bargaining sessions in the market.

This case allows students' to exercise their abilities in financial forecasting and analysis, and capital projects analysis. It offers a good omnibus review of foundational tools and concepts. In August 1993, a new CEO joins this small manufacturer of compact disks to discover that the firm is in the midst of a financial crisis, induced by rapid growth. The CEO asks an analyst for help with five tasks: (1) review historical performance of the firm; (2) forecast financing requirements for the next two years; (3) exercise the forecasting model to identify key-driver assumptions; (4) estimate Astral's weighted-average cost of capital; and (5) analyze a proposed investment in a packaging machine. The student in the role of the analyst must offer insights and recommendations based on the work.

This technical note presents an overview of the process by which an analyst can assess the financial policy of a firm. It defines several dimensions of financial policy, offers three benchmarks against which to evaluate the policy, and reviews the FRICTO framework with which to assess proposals for future financial policy.

Spreadsheet for case UV0713

Spreadsheet supplement for case UV2325.

In February 1991, the managers of this multinational specialty publishing company proposed to take the company private in a leveraged buyout (LBO). In addition to the ordinarily interesting features of the typical LBO, this transaction was the first to be denominated in ECUs and one of the few in which the managers provided all the equity financing. The tasks for the student are to value the company and evaluate the attractiveness of the transaction from the standpoints of seller, senior lender, mezzanine lender, and equity investor/manager. The case can be used to (1) exercise students' skills in valuing a highly leveraged company, (2) illustrate how deal structuring can mitigate potential agency problems, and (3) explore the problems and possible solutions associated with financing a global firm.

In June 1989, a banker must decide whether and how his bank should participate in the LBO of this small Scottish newspaper publisher. This is the first of a two-case series and may be taught by itself or as part of a sequence over two class meetings with the B case (UVA-F-1013). See also the abridged version (UVA-F-1011). Student and instructor worksheet files are available for use with this case and teaching note.

In 1989, the Walt Disney Company financed its major European theme park and real estate development using a variety of financing tools and techniques that, when bundled together, amounted to a project financing. The case recounts the details of this financing and invites students to evaluate the financing from various standpoints, including those of the Walt Disney Company, the government of France, European equity investors, and European banks. The resulting opinion about the attractiveness of the project ultimately hinges on beliefs about European market demand for an American-style theme park. The case may be used to exercise students' skills in valuation analysis, to illustrate techniques for financing major real-property projects, and to explore the creation and transfer of wealth in such projects.

In December 1990, a banker reassesses a borrower that, at the time of its leveraged buyout 18 months earlier, seemed to have such a promising future. Now the borrower is in severe financial distress. The tasks for the student are to evaluate competing proposals for restructuring the firm and to recommend a course of action for the bank. This is the "stand-alone" version of the second part of a two-case sequence. Students should not be exposed to this case until they have finished discussing the A case (UVA-F-1012).

Supplement for case UV2314

Spreadsheet for case UV2151

A new director of this small brewery must prepare to vote on three issues coming before the board of directors the next day: (1) approval of the financial plan for 1993, (2) quarterly dividend declaration, and (3) incentive-compensation plan for the marketing manager. The tasks for the student are to evaluate the past and prospective financial performance of the company and to assess the extremely liberal credit and inventory terms the company is extending to its distributors. The objective of the case is to introduce and exercise tools and concepts of financial-statement analysis. Perhaps the biggest insight gained by students concerns the link between incentives and financial performance: in this case, the marketing manager is motivated to build sales volume, which he accomplishes by a dramatic buildup in receivables and inventory.

In January 1993, the senior management committee of this company has to decide which major projects the company should fund for immediate implementation. The board of directors arbitrarily set a limit of European currency units (ECU) at 80 million to spend on capital projects in 1993. But various managers have proposed projects totaling ECU208 million. Students must evaluate the completed discounted cash flow (DCF) analyses presented along with qualitative factors (mainly the strategic considerations and the internal politics of the company) and choose the projects to be approved.