個案總覽

The owner of a tennis ball manufacturer was reviewing the company's financial performance for its third fiscal year. The bookkeeper had already recorded the fiscal 2020 cash transactions, but may have done so incorrectly. The owner recorded the opening balances, cash receipts, and cash disbursements to calculate the unadjusted trial balances for fiscal 2020. She started with the bookkeeper’s unadjusted trial balances and planned to use the balance sheet and the list of cash receipts and disbursements, if necessary. She would have to figure out where the bookkeeper posted each entry, determine whether it required an adjustment, and adjust accordingly.

The owner of a tennis ball manufacturer was reviewing the company's financial performance for its third fiscal year. The bookkeeper had already recorded the fiscal 2020 cash transactions, but may have done so incorrectly. The owner recorded the opening balances, cash receipts, and cash disbursements to calculate the unadjusted trial balances for fiscal 2020. She started with the bookkeeper's unadjusted trial balances and planned to use the balance sheet and the list of cash receipts and disbursements, if necessary. She would have to figure out where the bookkeeper posted each entry, determine whether it required an adjustment, and adjust accordingly.

In January 2021, the co-founder of Mystery Books Co. (Mystery Books) was evaluating the company's 2020 performance under the leadership of his daughter as the new chief executive officer. His daughter had ambitions of securing Walmart Inc. as a key client, so the co-founder had promised her an additional performance bonus of 5 per cent of his 30 per cent ownership of common stock if she grew the company's net income by 20 per cent over the previous year. Throughout his thirty years of managing the company as chief executive officer, the co-founder had maintained very conservative accounting policies, some of which had been modified under his daughter's management. After reviewing the 2020 financial information, the co-founder harboured several concerns: Should he have specified more conditions for his daughter's performance incentive? Would the accounting policy changes pass the scrutiny of the company's external auditors? And how should he proceed with regard to the suspicious sales activity he noticed? With these questions at the front of his mind, the co-founder of Mystery Books thought that perhaps he should have somehow left more reporting guidance for the company prior to leaving.

At the end of 2018, Francesco Cartoni was concluding his first MBA term when he decided to start working as an executive assistant for his family company, Antigal Winery (Antigal). Antigal encompassed three companies. Two were based in Mendoza (Argentina): Cepas del Sur S.A., which owned the vineyards, and Botega Antigal S.A., which performed the wine production. The third company, Cork Alliance Inc., was a wine wholesaler and importer/distributor based in Miami, Florida (US), that owned a special license to import alcohol. In past years this company structure allowed Antigal to achieve a wide distribution in the US and gain higher profit margins. However, after Francesco joined the company and decided to expand distribution in China, Antigal's sales started to grow significantly in Asia as well. Francesco wanted Antigal to have an even greater presence in China, but once he joined the company, he wanted first to have a clear idea about the value of Antigal. Francesco and his siblings spent the following months collecting any relevant information, and with the help of his accounting professor, they started to make an accurate company evaluation. To provide a comprehensive view of Antigal, this case study analyzes the company's past performance. By using financial ratios, common size analysis and trend analysis are performed. Then, to evaluate the company value of Antigal, two evaluation methodologies are applied: (i) Multiples and (ii) Discount Cash Flow (DCF). The case study also shows the limits of these two techniques and proposes alternative methods. In evaluating the company, many issues are considered: What is the best way to evaluate Antigal, which encompasses companies located in different countries? What is the best method to account for the high inflation rate in Argentina? How could global economic trends, such as the burst of the COVID-19 pandemic, and wine industry trends, impact Antigal's future growth? Antigal recorded stable sales in the

Spreadsheet Supplement for Case CB0180

Spreadsheet supplement to case 117025

In May 2021, a recent graduate from the master of business administration program at Ivey Business School noticed a news article about one of his investments, the leading athletic apparel company Under Armour, Inc. The article stated that Under Armour, Inc. was fined US$9 Million by the US Security and Exchange Commission. The charges were a result of concerns over the company’s revenue reporting practices, but the company's share price dropped only very slightly following the announcement. The investor was considering his options regarding his investment. However, he was still curious and eager to learn more about the circumstances behind the US Security and Exchange Commission’s charge and potential consequences for the company. The investor decided to examine Under Armour, Inc.’s revenue reporting practices, financial reporting practices, and corporate governance issues.

At its headquarters in Attendorn, Germany, Viega's chairwoman Anna Viegener gathered the company's leadership team to discuss their progress on formalizing purpose-driven leadership as a strategic driver within the organization. Viega manufactured and distributed plumbing, heating, and pipe-joining systems, and had been experiencing rapid growth and financial success during the past decades. Annual sales had doubled in 10 years, and the company had expanded its international presence to include offices around the globe. Still, with growth came an evolution in management and concerns about the ability of executives to instill in employees the values that had been key to the company's success since its founding by Anna and Walter's family in 1899. They wondered how they could continue cultivating the company's purpose: Installing lifelines for the buildings of tomorrow. To do so, Viegener developed a measurement system to quantify managers' adherence to the company's purpose and values, with plans to tie managers' bonuses to this values-based measure.

In May 2021, a recent graduate from the master of business administration program at Ivey Business School noticed a news article about one of his investments, the leading athletic apparel company Under Armour, Inc. The article stated that Under Armour, Inc. was fined US$9 Million by the US Security and Exchange Commission. The charges were a result of concerns over the company's revenue reporting practices, but the company's share price dropped only very slightly following the announcement. The investor was considering his options regarding his investment. However, he was still curious and eager to learn more about the circumstances behind the US Security and Exchange Commission's charge and potential consequences for the company. The investor decided to examine Under Armour, Inc.'s revenue reporting practices, financial reporting practices, and corporate governance issues.

At month’s end in May 2021, the owner of Lakeshore Tea Company Inc. (Lakeshore) located in Mississauga, Ontario, Canada, was reviewing her company’s merchandising operations for the preceding month. Lakeshore operated as an herbal tea processor and supplier, importing herbs and tea leaves from a variety of sources across the globe. Over its first two years of operations Lakeshore had experienced significant growth and had begun supplying a variety of restaurants, health food stores, and small grocery outlets in the Greater Toronto Area. The owner was now tasked with recording all accounting entries relating to Lakeshore’s merchandising operations for the past month.

At month's end in May 2021, the owner of Lakeshore Tea Company Inc. (Lakeshore) located in Mississauga, Ontario, Canada, was reviewing her company's merchandising operations for the preceding month. Lakeshore operated as an herbal tea processor and supplier, importing herbs and tea leaves from a variety of sources across the globe. Over its first two years of operations Lakeshore had experienced significant growth and had begun supplying a variety of restaurants, health food stores, and small grocery outlets in the Greater Toronto Area. The owner was now tasked with recording all accounting entries relating to Lakeshore's merchandising operations for the past month.

ShakeeBee Honey Inc. was a relatively small producer of pure honey and beeswax and provider of pollination services located in central Newfoundland, Canada. The company needed to consider further expansion beyond the facility modernization it undertook in 2018; this expansion would involve acquiring additional land and attracting key personnel. In March 2020, the owner reached out to his accountant for assistance with a variety of accounting-related matters. The company needed an analysis of its current operations, including profitability by product/service line offered. It also needed an assessment of its application for a government pollination grant and a declaration in support of this application, and assistance in evaluating tax implications of some upcoming decisions.

ShakeeBee Honey Inc. was a relatively small producer of pure honey and beeswax and provider of pollination services located in central Newfoundland, Canada. The company needed to consider further expansion beyond the facility modernization it undertook in 2018; this expansion would involve acquiring additional land and attracting key personnel. In March 2020, the owner reached out to his accountant for assistance with a variety of accounting-related matters. The company needed an analysis of its current operations, including profitability by product/service line offered. It also needed an assessment of its application for a government pollination grant and a declaration in support of this application, and assistance in evaluating tax implications of some upcoming decisions.

In 2019, Paratent Event Rentals Ltd. was facing the possibility of year end net losses. The co-owners of this Canadian business had recently invested in premium inventory, but a lackluster first quarter showed that they were not forecasted to get return on their investments. A new method of cost allocation was proposed to get Paratent back on track. When choosing between three conflicting future contracts, both the old and new methods of cost allocation needed to be implemented and considered. Using qualitative and quantitative analyses, Paratent needed to decide which job would be the most profitable and which cost allocation method to use in the future.

Spreadsheet Supplement for Case W24214

This note focuses on the antecedents of, reactions to, and clarifications about The Business Roundtable's August 19, 2019, "Statement on the Purpose of a Corporation." The note includes background information on corporate governance as practiced in the United States in the twentieth and twenty-first centuries. It discusses "managerialism," "stakeholderism," and shareholder primacy. The latter view is represented by Milton Friedman's essay, "The Social Responsibility of Business Is to Increase Its Profits," which is summarized in the note. The note also includes a history of The Business Roundtable and its periodic statements on topics related to corporate governance, including its original 1997 "Statement on the Purpose of a Corporation." The note then relays the issuance of the 2019 update to that statement, along with reactions from the popular media, shareholder advocates, academics, and stakeholder governance advocates.

In October 2018, Canada legalized recreational use of cannabis. One year later, in late 2019, after share prices had fallen significantly from their peak, investors were looking for favourable investment opportunities in the cannabis industry. HEXO Corp. and Aurora Cannabis Inc. were two cannabis companies that traded on the Toronto Stock Exchange and followed International Financial Reporting Standards. In such a young industry, many companies were still reporting losses. Therefore, potential investors focused on a company’s enterprise value (EV) and used the EV-to-revenue multiple as a useful metric for assessing a company’s value. Before conducting an analysis of the two companies’ values, however, investors had to consider several accounting directives issued by the International Accounting Standards that affected their financial statements. In particular, IAS 41 Agriculture posed various difficulties for Canadian cannabis companies. Investors who were interested in pursuing opportunities in Canada’s cannabis industry had to pay close attention to this accounting standard and to the financial statements of individual companies.

Hotel Kinara is a newly built, well-functioning 4-star hotel in Ahmedabad. But the hotel owners desire an exit from the market. A transaction advisory consultant values the hotel right before the COVID-19 pandemic. However, as happens with big-ticket transactions, the sale is delayed. The hotel is revalued after the first wave of COVID-19 subsides. The valuation is substantially below the original estimates. The consultant contemplates the valuation two years later. The case is centred around valuing a commercial property asset in different market conditions using the discounted cash flow method. Students develop a cash flow pro forma on the basis of market information. The case exposes students to several nuances of pro forma development. Students are sensitised to the idea that valuation is about not just cash flows but also the perceived risk in cash flows. The perceived risks may result from investors' overreaction to market conditions and irrational sentiments. The discount rate, capitalisation rate, etc., must be revised carefully as the market cycles change.

In October 2018, Canada legalized recreational use of cannabis. One year later, in late 2019, after share prices had fallen significantly from their peak, investors were looking for favourable investment opportunities in the cannabis industry. HEXO Corp. and Aurora Cannabis Inc. were two cannabis companies that traded on the Toronto Stock Exchange and followed International Financial Reporting Standards. In such a young industry, many companies were still reporting losses. Therefore, potential investors focused on a company's enterprise value (EV) and used the EV-to-revenue multiple as a useful metric for assessing a company's value. Before conducting an analysis of the two companies' values, however, investors had to consider several accounting directives issued by the International Accounting Standards that affected their financial statements. In particular, IAS 41 Agriculture posed various difficulties for Canadian cannabis companies. Investors who were interested in pursuing opportunities in Canada's cannabis industry had to pay close attention to this accounting standard and to the financial statements of individual companies.

This case explores the accounting treatment for the "rent concessions" offered by lessors to lessees during the Covid-19 pandemic. The protagonist company is Xiabuxiabu Catering Management (China) Holdings Co., Ltd. (Xiabuxiabu or the Group, HKEx: 520). Xiabuxiabu was one of the hot-pot restaurant chains with the highest relevant market share in mainland China. As the Group had been serving retail customers in its retail branches, the newly promulgated "Covid-19 Related Rent Concessions" had a significant impact on lease accounting for its branches. During the pandemic, many lessees had obtained rent concessions granted by lessors in numerous forms, such as a rent payment (lease payment) holiday, a reduction in rent payments for certain period of time, a deferral of rent payments, and a change to the lease term etc. In May 2020, the International Accounting Standards Board (IASB) issued "Covid-19-Related Rent Concessions" as a "practical expedient" to lessees. This expedient came as an "optional" relief to lessees from the mandatory application of IFRS 16. As such, lessees had the option of not accounting for rent concessions as "lease modifications". This greatly simplified lease accounting particularly during the pandemic. Xiabuxiabu had chosen to adopt such an expedient since the financial year 2020.