個案總覽

Discusses the gap between reality and the NPM paradigm and the lessons that can be transferred from the private to the public sector. Address the difference between bureaucratic control and managerial control, and how to move toward managerial control. Focuses on the barriers to effective managerial control and how to overcome them, including the control culture, centralized decision making, the distinction between planning and control, absence of market forces, task complexity, and personnel policies. Includes a discussion of responsibility centers as a decentralizing mechanism, and how a well-prepared set of management control reports can assist managers.

Discusses some basic concepts of financial statements, including the balance sheet and what it measures, the nature of some specific assets and liabilities, the income statement and what it measures, the creation of owners' equity, and the basis for changes in it. Also addresses several fundamental accounting concepts (entity, dual aspect, money measurement, cost, realization), and some basic accounting and finance matters, including the nature of an account, leverage, unmeasured value, and depreciation.

Sound financial management is the most important element in the viability of any business undertaking, and capital investment decisions are the foundation stone of this process. A company can pursue either an internal, organic approach to its financing options or an external, inorganic approach that uses borrowed funds to make acquisitions it hopes will increase its business. This is the route taken by Bharti Airtel Limited, India’s leading telecommunications giant. Beginning in 2010, it has borrowed heavily on the international market to invest in acquisitions of a 3G licence in India, in Zain Africa and in the broadband wireless access branch of Qualcomm Inc. However, due to many causes — including the effects of the global recession on the industry; the highly competitive Indian telecommunications market; restructuring and disorganization in the firm’s top management; and lack of innovation in offering and delivering new services in India — the company has experienced not the growth it expected from its expansion strategy, but a steady decline in profits. How can the management turn this situation around and regain the company’s position as a leader in the telecommunications market in India and globally?

In early December 2013, Jim Madsen, co-founder and owner of The Farm Winery was preparing the company's current and longer-term financing needs. Madsen needed to develop plans for fiscal year 2014, which included specific goals that were crucial to the success of the business. First, although the founders had historically contributed capital to meet seasonal cash needs, they were determined to achieve a point of self-sustainability. Next, the business required additional capital expenditures to supplement purchases made at the beginning of the business five years earlier. Finally, the team needed to determine whether to make an investment in additional vineyard development that would require a substantial cash outlay in the coming fiscal year but would not yield any fiscal benefit until nearly a decade later. This case describes The Farm Winery's background, past operating performance, distribution/sales, production, and financing in order to develop plans for fiscal year 2014 and determine the attainability of goals crucial to the success of the business.

Anna Amphlett, a financial analyst with Southern Cross Capital LLC, spent the first days in her new job gathering information about ADT Corporation, a company whose shares Southern Cross was considering acquiring for its Business Services portfolio. Amphlett graduated with an MBA in accounting and finance, and had spent a summer as an intern with Southern Cross specializing in the service sector before joining the company. On September 28, 2012, ADT became an independent publicly traded company listed on the New York Stock Exchange, after Tyco (TYC) split itself into three independent companies. ADT generated revenues by charging customers monthly subscription fees for commercial and home security services. Southern Cross's portfolio manager had asked Amphlett to pay close attention to the company's accounting methods, and particularly to its policy of capitalizing and amortizing cash outlays on sales commissions, instead of expensing them immediately. Southern Cross had become wary of companies such as Pre-Paid Legal Services, PolyMedica, and Excel Communications, which experienced significant stock price declines after popular press articles discussed their policy of boosting earnings by capitalizing and amortizing indirect costs. Such companies also experienced significant stock price declines when it was disclosed they were under investigation by the U.S. Securities & Exchange Commission (SEC).

Examines factors underlying differences in valuation multiples (price-earnings and price-to-book) across four firms in the airline industry.

In May 2011, the managing partner of the Modern Agricultural Farm in rural Pakistan was reviewing the set of performance reports for the previous month sent by the farm accountant. These reports had been designed by a management analysis and research consultant to convert the farm system to that used by the head office of the Alamgir Group of businesses, of which the farm was a part. There were two concerns: how to handle the fluctuations in the farm’s monthly cash flow and how to plan the right combination of plantings and crops to ensure a profit. A computer-based accounting software program had been purchased to help expedite accounting and reporting, and an annual master budget plan had been established to control operations. Given the special risks faced in agriculture where the portfolio of crops was dependent on uncontrollable factors, such as the weather, the managing director wondered how he could develop a workable budget for the coming year.<br><br>Student spreadsheet 7B13B025 with data is available.

James Amphlett, a financial analyst with Southern Cross LLC, has been asked to assess the financial performance of Farmer Brothers Company, a coffee manufacturer and distributor whose shares the equity firm was considering acquiring for its Growth Service portfolio. Amphlett's research showed that the coffee business was volatile. Coffee prices had risen steadily from $0.20 per pound at the end of 2001 to over $1.20 per pound by the end of 2007, only to plunge to $0.70 per pound in March 2010, and rise again to over $1.26 by June 2011. The increase in coffee prices had taken a toll on Farmer Brothers' bottom line. It had also taken a toll on Farmer Brothers' stock price, as the company saw its stock price fall from over $24 per share in July 2008 to less than $6 per share by August 2011. Farmer Brothers valued inventory using the last-in-first-out, or LIFO method, whereas other coffee companies used FIFO; thus it was more difficult to make an apples-to-apples comparison of financial performance. Amphlett recalled that the LIFO accounting method was used primarily to save taxes as higher input prices were matched against revenues to reduce taxable earnings.

On January 31, 2014, the chief executive officer (CEO) of General Motors (GM), a major automaker located in Detroit, Michigan, must decide whether to issue a recall based on a defect that had been found through an internal safety committee investigation. The ignition switch of certain GM small car models manufactured between 2005 and 2007 was prone to being nudged out of the run position, causing the driver to lose control as the engine would switch off mid-drive, disabling power steering and preventing air bags from being deployed in the case of a collision. If she decided to issue a recall, the CEO needed to consider which car models to include, as well as whether to offer any additional compensation to drivers. Not only would a recall have potential legal and public relations repercussions, but it would present the company with potential future costs. She needed to consider the accounting implications of these contingencies.

This case is used at the Darden School of Business in the inventory module of the "Financial Reporting" course elective, but it would also work well at the advanced undergraduate level. Through five phases, students first become familiar with core terminology and concepts before examining various situations-from what to make of an annual report footnote disclosure and balancing the pros and cons of using LIFO versus FIFO cost flow assumption to examining misreported inventory and inventory write-downs.

In May 2013, the director of transitional and community programs at Women’s Community House (WCH) must decide whether to renew the retail lease on WCH’s used-clothing boutique, Mine101. This social enterprise was launched to generate income for WCH’s children’s programming, but lost money in its first two years of operations. The decision to renew the lease begs a larger question: Should Women’s Community House continue to operate Mine101? The director must conduct an analysis of the performance of Mine101 and recommend whether or not to continue operating the social enterprise.

The Treasure Trophy (Treasure) company manufactures trophies for all kinds of sporting, business and celebratory events. The trophy manufacturing industry is highly competitive and, as a result, pricing decisions with respect to formulating bids are very important. Treasure has traditionally used a job order system of cost accumulation (i.e., job cost). Treasure has to bid on two new jobs, and the new general manager must decide which method of costing should be used for these orders and subsequently set a price for each order.

The Treasure Trophy (Treasure) company manufactures trophies for all kinds of sporting, business and celebratory events. The trophy manufacturing industry is highly competitive and, as a result, pricing decisions with respect to formulating bids are very important. Treasure has traditionally used a job order system of cost accumulation (i.e., job cost). Treasure has to bid on two new jobs, and the new general manager must decide which method of costing should be used for these orders and subsequently set a price for each order.

Transfer pricing used by multinational corporations to lower its tax burden, thereby increasing its consolidated income, can have far-reaching implications for the stakeholders, as a fund manager for Saskhedge fund found out the hard way. A stock investment the manager had made in Cameco Corporation has dropped its value by 20 per cent. In addition, Canada Revenue Agency has initiated a law suit against the firm for alleged tax avoidance in relation to the company's transfer pricing practices with its Swiss subsidiary. The suit could result in an additional tax liability of $800 million to $850 million. The manager needs to explain to the investment board the implications of the lawsuit on the stock price and advise the board on whether the projected $800 to $850 million is a fair estimate.

Transfer pricing used by multinational corporations to lower its tax burden, thereby increasing its consolidated income, can have far-reaching implications for the stakeholders, as a fund manager for Saskhedge fund found out the hard way. A stock investment the manager had made in Cameco Corporation has dropped its value by 20 per cent. In addition, Canada Revenue Agency has initiated a law suit against the firm for alleged tax avoidance in relation to the company's transfer pricing practices with its Swiss subsidiary. The suit could result in an additional tax liability of $800 million to $850 million. The manager needs to explain to the investment board the implications of the lawsuit on the stock price and advise the board on whether the projected $800 to $850 million is a fair estimate.

Dicore, the third largest supplier of drilling services in the world, must increase its profitability. To do so, the executive committee is considering an expansion into the southwestern United States. The senior vice-president and general manager must create a plan that outlines whether or not Dicore should enter the southwest drilling market and, if so, if it should enter this market organically or through an acquisition.

This case is a follow-up to UVA-C-2295. The analysis of the proposed new data center suggested that the project's net present value was negative-not by much, but by enough to be of concern. Scheduled to meet with her boss at 3:00 p.m. to review the results of her analysis, the senior project leader is contemplating what to do next. When she and her boss had discussed the economics of green practices in the context of the bank's next data center, she had been sure she could justify the cost of the investment in green technologies; the cost of power and cooling infrastructure had become the primary cost drivers in a data center, and new technologies were promising substantial reductions in power and cooling costs.

Spreadsheet supplement for UV6840.

Bhagwan Mahaveer Viklang Sahayata Samiti (BMVSS) is an Indian not-for-profit organization engaged in assisting differently-abled persons by providing them with the legendary low-cost prosthesis, the Jaipur Foot, and other mobility-assisting devices, free of cost. Known for its patient-centric culture, its focus on innovation, and for developing the $20 Stanford-Jaipur knee, BMVSS has assisted over a million people in its lifetime of 44 years. As the founder, Mr. D.R. Mehta, thinks about the financial sustainability of BMVSS, he must devise a strategy that will sustain its human impact well into the future.