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Uber Technologies Inc., the popular ride-hailing company, entered 2017 having doubled its bookings in 2016 and achieving a valuation of nearly $70 billion, making it the largest venture capital-backed company in the world. Co-founder and CEO Travis Kalanick embodied the company, with a hard-charging attitude embedded in the company's workplace culture that allowed it to successfully take on the entrenched taxi industry. Uber looked to enjoy another year of global growth in 2017, until lawsuits and a cascading series of scandals surrounding that same workplace culture led a group of powerful investors to seek Kalanick's resignation to protect their investment. This case presents an overview of the growth of Uber, the impact of Kalanick, and the role that Uber's board of directors had in shaping the company's growth. It centers on the factors leading to Uber board members and investors to call for Kalanick's resignation, focusing on how board oversight can help shape company culture and how entrepreneurial boards deal with founder CEOs. It then deals with the events that happened in the aftermath of Kalanick's resignation, including the appointment of Dara Khosrowshahi as CEO and the changes, the lawsuit brought against Kalanick by venture capital firm Benchmark Capital, and the governance changes proposed at the end of September 2017.

In 2016, the founder of Enigma Escape Rooms Ltd. (Enigma) was investigating an opportunity to expand his business to a second location. A new location would offer three additional escape rooms, and Enigma would enter the horror-based genre of the market. Enigma had strong demand for its adventure-themed escape rooms during its first year of operations. With escape room popularity at an all-time high and new competitors in or entering the market, the owner wondered if this was the best time to grow his business. He planned to complete a business size-up, assess the competition, and then project the costs and benefits of opening a second location before making a final decision.

The objective of this reading is to enhance understanding of the concept of fair value as used in accounting. It is not intended to expand knowledge of specific accounting applications of fair value at the transaction level.

The founder of a cloud computing business needs to determine the costs of providing the company's services to its clients. Students must perform an activity-based costing exercise to determine the cost of the company's two core product offerings and recommend which product should become the company's focus. Students must also consider the treatment of upfront capital costs when determining profitability. To make a decision, students must understand the company, the industry in which it operates and the costing issues involved.

AquaSafi Purification Systems Pvt. Ltd. (AquaSafi) was a social enterprise that aimed to provide clean water to people in the developing world. The organization assembled and sold its water purification technology, at cost, to villages and non-governmental organizations in rural India. Before deciding to change AquaSafi's current operating model, the executive director thought it would be useful to perform a cost/benefit analysis to see how the company's cash flow would differ at a new water filtration plant under the current and proposed operating models. He also wondered whether it made sense for AquaSafi to change its operating model as it expanded its operations, since the company's current operating model had been well received in the villages.

The objective of this reading is to enhance understanding of the nature of the information that general purpose financial reports provide. This goal is achieved by exposing readers to the basic accounting concepts and assumptions that shape the form and character of this information.

The Mountain Musical Theatre Company (MMTC), located in Great Falls, Montana, was an important part of the local cultural scene. For many years, MMTC had performed a wide variety of shows that had been much enjoyed by local and visiting patrons, and it would have been easy to assume that the organization was a great success. However, significant organizational and financial problems had been brewing inside MMTC. In September 2015, these problems came to a head. The organization did not have formal financial statements, and the absence of these had recently led to major disagreements between MMTC's leadership team and its board of directors. The recently appointed board chair did not know if MMTC was making or losing money. Although she feared the consequences could be serious, the board chair needed to ensure that financial statements for MMTC were created and analyzed to determine the truth about the organization's financial situation.

The Mountain Musical Theatre Company (MMTC), located in Great Falls, Montana, was an important part of the local cultural scene. For many years, MMTC had performed a wide variety of shows that had been much enjoyed by local and visiting patrons, and it would have been easy to assume that the organization was a great success. However, significant organizational and financial problems had been brewing inside MMTC. In September 2015, these problems came to a head. The organization did not have formal financial statements, and the absence of these had recently led to major disagreements between MMTC’s leadership team and its board of directors. The recently appointed board chair did not know if MMTC was making or losing money. Although she feared the consequences could be serious, the board chair needed to ensure that financial statements for MMTC were created and analyzed to determine the truth about the organization’s financial situation.

Ricoh India Limited, a subsidiary of Ricoh Japan, failed to submit its quarterly results in September and December 2015, leading the Bombay Stock Exchange to move the company’s shares from the B category (companies with small to mid-capitalization rates) to the Z category, which included companies that had failed to comply with listing requirements or had failed to resolve investor complaints. Although the company claimed that it had adhered to corporate governance standards and high ethical conduct, it admitted to having falsified its accounting records. Between March 2016 and May 2016, the company’s shares lost 42.3 per cent in market value. What was the impact for the company’s shareholders? After the falsification of the company’s financial statements was made public, should an investor continue to hold the Ricoh India shares, or divest?

In 2016, the owner of a small community bakery in Strathroy, Ontario, was planning the future of her business, since the lease on the store would expire soon. She was considering the financial feasibility of closing the bakery and focusing on only catering events. The bakery had not earned a profit as of late, and some local eateries were significant competitors. Running a bakery full time with two young children had been overwhelming at times, and she needed to consider a change to better manage her home and work life. She intended to continue withdrawing her annual salary of at least $40,000 under this catering-only option. She was concerned for the welfare of her four employees but also wanted to begin saving for her children’s education. This owner had to decide which option would be most appropriate for her needs.

Ricoh India Limited, a subsidiary of Ricoh Japan, failed to submit its quarterly results in September and December 2015, leading the Bombay Stock Exchange to move the company's shares from the B category (companies with small to mid-capitalization rates) to the Z category, which included companies that had failed to comply with listing requirements or had failed to resolve investor complaints. Although the company claimed that it had adhered to corporate governance standards and high ethical conduct, it admitted to having falsified its accounting records. Between March 2016 and May 2016, the company's shares lost 42.3 per cent in market value. What was the impact for the company's shareholders? After the falsification of the company's financial statements was made public, should an investor continue to hold the Ricoh India shares, or divest?

In November 2015, U.S.-based biopharmaceuticals company Pfizer [NYSE: PFE] and Ireland-based pharmaceutical company Allergan [NYSE: AGN] announced a $160 billion merger to move Pfizer's domicile out of the United States to Ireland in the largest inversion deal ever. The announcement came just days after the U.S. Treasury Department laid out a set of restrictions on tax inversions; however, the deal was structured to avoid those restrictions. According to the U.S. Department of the Treasury, "By undertaking an inversion transaction, companies move their tax residence overseas to avoid U.S. taxes without making significant changes in their business operations." Two primary benefits provided by inversions were: (1) the removal of a company's foreign operations and income from the U.S. taxing jurisdiction to achieve pure "territorial" tax treatment (in which income was taxed only in the country where it was earned); and (2) the reduction of U.S. taxes on income from U.S. operations through the use of various "earnings stripping strategies" (e.g., making payments of deductible interest or royalties from the U.S. entity to a new foreign parent). According to Reed College economist Kim Clausing, inversions and other income-shifting techniques reduced Treasury revenues by as much as $111 billion in 2012.

In early 2017, Andrew Peller Limited (APL), a producer and marketer of quality wines and Canada’s only publicly traded winemaker, presented an interesting opportunity for investors. If investors were looking to diversify their current holdings and were considering an investment in the food and beverage sector, would APL make a good investment? To help make this decision, potential investors needed to assess the organization’s past financial performance using information from its annual reports, its corporate strategy, and finally the risks and opportunities associated with the industry. Based on this analysis, investors would decide whether to invest in APL.

In early 2017, Andrew Peller Limited (APL), a producer and marketer of quality wines and Canada's only publicly traded winemaker, presented an interesting opportunity for investors. If investors were looking to diversify their current holdings and were considering an investment in the food and beverage sector, would APL make a good investment? To help make this decision, potential investors needed to assess the organization's past financial performance using information from its annual reports, its corporate strategy, and finally the risks and opportunities associated with the industry. Based on this analysis, investors would decide whether to invest in APL.

In January 2016, the owners of a family farm near London, Ontario, Canada, wanted to evaluate the financial status of their business. After 30 years in farming during a period that had seen dramatic changes in the agricultural industry, the couple was beginning to think about succession planning for the farm that had been passed down to them from previous generations. The couple wanted to evaluate how well they had managed the farm's cash throughout fiscal 2015 and would use this analysis to help them determine the long-term stability of the farm's operation in preparation for this succession plan.

In January 2016, the owners of a family farm near London, Ontario, Canada, wanted to evaluate the financial status of their business. After 30 years in farming during a period that had seen dramatic changes in the agricultural industry, the couple was beginning to think about succession planning for the farm that had been passed down to them from previous generations. The couple wanted to evaluate how well they had managed the farm’s cash throughout fiscal 2015 and would use this analysis to help them determine the long-term stability of the farm's operation in preparation for this succession plan.

This Reading helps readers understand that financial ratios-one financial statement item divided by another-are used to create useful metrics. In other words, the inputs or financial items are derived from the financial statements. The reading also shows how ROE is calculated using three ratios: profit margin, operation efficiency, and financial leverage.

In 2016, a recently retired artilleryman from the Canadian Armed Forces was planning his next steps as a civilian. He had always been passionate about healthy lifestyles, and his sense of entrepreneurship led him to consider the viability of launching a series of fitness boot camps, based on different skill levels and age groups. He saw this boot camp idea as a way of providing health services to a group of clients who were already interested in exercise but who might become more involved if their fitness activities were held outdoors. He could either launch the boot camps on his own or partner with a small local gym. He needed to earn $2,000 after all expenses per month from May to August each year for the business to be feasible. The gym offered him cost-saving options, but was he ready to share his revenue with a partner?

In February 2008, as world markets slid deeper into economic decline, J. Michael Pearson joined Valeant Pharmaceuticals, a specialty pharmaceuticals company, then based in a quiet suburb of southern California. By August 2015, the stock price peaked, valuing the company at nearly $90 billion, up from $2 billion in 2008. In that time, Valeant had made over 100 acquisitions with total revenues growing from roughly $750 million in 2008 to over $10 billion in 2015. The explosive growth of Valeant in just seven-and-a-half years was not without purpose.

The objective of this reading is to introduce two fundamental investment principles that underlie stock valuations and how these principles apply to two popular approaches to valuing stocks: multiples and discounted future earnings.