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The case tells the story of the rise and fall of Scott Tucker, an entrepreneur, businessman, passionate race car driver, competitor, and owner of a professional racing team. From 1997 to 2012, Tucker built a nationwide network of payday lending businesses, becoming a pioneer in online lending along the way. Many of his borrowers depended on payday loans as a lifeline in dire times-a pricy-yet-reliable source of cash to pay bills and cope with emergency expenses. However, Tucker's reign came to an end in 2012 when federal prosecutors indicted Tucker on several criminal charges, including the violation of disclosure laws. This case allows students to discuss the role of individual executives in the corporate governance process, and how the regulatory-level, firm-level, and personal levers of governance may interact to create trust in markets. The case also allows discussions of the importance of effective communication of information by management to help facilitate the decision-making of various stakeholders (such as investors, employees, and customers).

The case tells the story of the rise and fall of Scott Tucker, an entrepreneur, businessman, passionate race car driver, competitor, and owner of a professional racing team. From 1997 to 2012, Tucker built a nationwide network of payday lending businesses, becoming a pioneer in online lending along the way. Many of his borrowers depended on payday loans as a lifeline in dire times-a pricy-yet-reliable source of cash to pay bills and cope with emergency expenses. However, Tucker's reign came to an end in 2012 when federal prosecutors indicted Tucker on several criminal charges, including the violation of disclosure laws. This (B) case completes the narrative, describing the outcomes of the legal cases and consequences for Tucker and his businesses. This case allows students to discuss the role of individual executives in the corporate governance process, and how the regulatory-level, firm-level, and personal levers of governance may interact to create trust in markets. The case also allows discussions of the importance of effective communication of information by management to help facilitate the decision-making of various stakeholders (such as investors, employees, and customers).

Ping An OneConnect Bank (Hong Kong) Limited is a virtual bank that has pioneered the use of Fintech to provide efficient banking services to both SMEs and retail customers. The bank uses innovative credit risk and loan pricing models that rely on big data analytics, including detailed customs data for its small and medium-sized enterprise (SME) customers in the import/export business.

In September 2020, Diana Ferguson was nearing her first Audit Committee meeting as the newly appointed Audit Committee chair of Mattel, Inc. Mattel was just recovering from an accounting scandal which had revealed the company's poor internal controls and weak board oversight over financial reporting, and the committee had important decisions to make going forward. In early 2018, Mattel's Tax team had discovered a significant reporting error in its third-quarter financial results. In consultation with Mattel's independent auditor, PricewaterhouseCoopers (PwC), Mattel's finance team opted not to issue a correction and instead (effectively) concealed this mistake. This cover-up came to light in 2019, when an anonymous whistleblower reported the incident, setting off a chain of negative press coverage and senior-level resignations. Mattel responded by conducting an internal investigation, and concluded that, while their accounting processes needed to be improved, there was no evidence of fraud. Despite this, this issue had resurfaced in early 2020 when the United States Securities and Exchange Commission (SEC) launched a fresh investigation into the accounting error and subsequent cover-up. In light of these events, Ferguson and the Audit Committee faced a challenging road ahead with several important issues to consider. They needed to tackle Mattel's problematic governance and internal controls, and restore investor confidence in the company's financial disclosures. They also needed to review their earlier decision to continue to engage PwC as Mattel's auditor going forward.

Three business partners were stunned to learn their controller of five years had embezzled approximately $200,000 from their small technology firm. The attorney for the embezzler called and notified them the controller was resigning effective immediately and they had no hope of recovering any of the money. Such news would have had serious financial repercussions for any small firm. But, the attorney's revelation of the embezzlement came at a particularly tenuous time because the partners were in negotiations to sell their company. The partners wanted to report the former controller to the district attorney with hopes she would be prosecuted for fraud. Yet, they knew having the embezzlement become public likely would jeopardize the sale of their firm. With hindsight, the partners knew they had given the controller too many responsibilities with no internal controls and little supervision. They wanted answers to questions about exactly how she perpetrated the fraud, but they had a more immediate concern. What steps should they take right now?

Ben Van Weelden, Manager of Scenic Floral, was considering providing direct-to-door delivery to Northern Ontario stores for its main customer, Metro Inc. Scenic was looking for ways to increase sales and profit, but also had its eye on providing coast-to-coast delivery of cut flowers in Canada, with the help of its partner-shareholder, Petals West. However, it would need to be advantageous for both Scenic and Metro to make this a viable option.

Kombucha Canada Inc. sold kombucha beverages to restaurants and grocery stores in British Columbia, Canada. Restaurant and store closures, as a result of the COVID-19 pandemic, had affected the company’s sales. The business owner wanted to value her inventory at year-end using the first-in, first-out method of valuation and calculate the impact of the COVID-19 pandemic on her inventory.

Jane Zhou, an equity analyst at a large asset management firm, was preparing a report on EOS Imaging (EOS), a French medical device company that her firm had invested in. EOS’s drastic fall in First Quarter (Q1) 2019 revenue caught Zhou’s attention, as the company had maintained a continuous growth record up until 2018. In Q1 2019, EOS only achieved 1 per cent of its Q1 2019 equipment sales revenue. Also, during Q1, EOS made a significant change to its general sales agreement, leading to a corresponding change in revenue recognition timing. Zhou wondered if the revenue slowdown could be mainly attributed to the accounting method change rather than to weakening demand. It was crucial for Zhou to understand the impact of this change and to decide whether she should recommend her portfolio manager to liquidate the firm’s position in EOS or not.

Jane Zhou, an equity analyst at a large asset management firm, was preparing a report on EOS Imaging (EOS), a French medical device company that her firm had invested in. EOS's drastic fall in First Quarter (Q1) 2019 revenue caught Zhou's attention, as the company had maintained a continuous growth record up until 2018. In Q1 2019, EOS only achieved 1 per cent of its Q1 2019 equipment sales revenue. Also, during Q1, EOS made a significant change to its general sales agreement, leading to a corresponding change in revenue recognition timing. Zhou wondered if the revenue slowdown could be mainly attributed to the accounting method change rather than to weakening demand. It was crucial for Zhou to understand the impact of this change and to decide whether she should recommend her portfolio manager to liquidate the firm's position in EOS or not.

Spreadsheet to accompany product W25080.

Instructor Spreadsheet to accompany product W25081.

This short note introduces all of the important and commonly used financial ratios, organized into five categories: (1) liquidity ratios, which measure a company’s ability to meet short-term debt obligations; (2) leverage ratios, which evaluate a company’s capital structure by measuring how a firm uses debt and equity to finance its operations; (3) efficiency ratios, which measure how efficiently a company is utilizing its assets and resources; (4) profitability ratios, which measure a company’s ability to generate profit from its resources; and (5) market ratios (also called valuation ratios), which evaluate the share price of a company’s stock.

In February 2021, the owner of Anwal Gas Traders, a liquefied petroleum gas distribution company based in Sakesar, Khushab District, in the province of Punjab, Pakistan, was considering whether to invest in expansion. It would be the first significant expansion for the company since its founding in 1998. Based on data provided by a consultancy firm performing capital budgeting techniques, the company would integrate backward to take advantage of perceived market potential. The owner needed to determine whether this investment was worth making and how various scenarios would affect his decision.

In 2016, US firm Aerojet Rocketdyne Holdings, Inc. (Aerojet) had been developing and manufacturing propulsion systems for rockets and armaments for long-range weapons systems for over 70 years. It also owned 4,634 hectares of land and an investment portfolio worth more than its stock’s market capitalization—but it had a large amount of debt and an underfunded pension plan. Aerojet’s stock had fallen over 30 per cent to US$16.30 under new executive leadership, and a hedge fund manager at Royal Capital Management LLC had to decide whether to wait for Aerojet to take off. After valuing the firm’s various assets, he concluded the stock was worth $35 based on the sum of the parts, but he needed to consider some of the parts, including its significant debt and a pension plan underfunded by $637 million, which were still cause for concern.

This case revolves around a private hospital in Hong Kong. The hospital suffered a huge net loss during the preceding fiscal year, and the board of directors would like to improve cost management. Dr. Harris Pang, a prominent endocrinologist in the hospital, was appointed to review the existing costing model and to pinpoint opportunities for cost reduction. The case commences with an introduction of the "dual-track" system of the Hong Kong healthcare financial model. It then provides a brief background explanation of the hospital through four lenses: positioning strategy, organizational culture, financial structure and management, and the existing costing. The background information is intended to instill a key message: While the hospital focused on the value of operational excellence and patient-centered care, it failed to capture such value from patients due to inaccurate cost information. While considering the aforementioned case background, Dr. Pang began to design an alternative costing model that would improve the accuracy of cost information. He proposed adopting activity-based costing (ABC). Various costing systems have different results in terms of accuracy and administrative efficiencies. Based on the explanation of the costing methodologies, students are required to (1) compare the individual patient costs of different clinical considerations through the original and proposed costing models, (2) propose potential areas of application, and (3) acknowledge the embedded limitations.

This case examines the accounting of sale and leaseback transaction for an undergraduate or graduate accounting class. This case also examines the effects of such a transaction on financial statements. Vibrant Group is listed on the Singapore Exchange. In 2019, it entered into a sale and leaseback transaction. This was reported in its 2020 Annual Report using the revised Singapore Financial Reporting Standards (International) 16 ("SFRS(I) 16") Leases. This case exposes students to practical situations that highlight important principles and illustrate best practices in accounting. The business scenario of this case creates opportunities to delve into a variety of capital management options, namely: (i) obtaining a loan using property as a collateral; (ii) issuance of share capital; or (iii) entering into a sale and leaseback transaction; their pros and cons and financial statement effects. This case may be used in countries where IFRSs are applicable as SFRS (I) 16 Leases is identical to IFRS 16 Leases.

A change in the corporate US federal income tax rate necessitates an adjustment to a company's balance sheet deferred tax account. Stephanie Allen has been tasked with determining the projected effects of several "what if" changes in the corporate income tax rate on her employer's (Software for Seniors, Corp.) and a peer's DuPont ratios and earnings per share performance measures. This general experience-based case uses data created by the authors that generally model the proportionalities of various line items within the financial statements of some real-world companies. As such, the financial statement effects due to an income tax rate change explored in this case are reasonable. It is suitable for an undergraduate or graduate level financial reporting course or a financial statement analysis course.