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Discusses the relationship between accounting and strategy and explains why intangible assets are important to understanding an organization's strategy.

Discusses the complex topic of motivation, including the issue of contingent compensation. Includes theories of Maslow, McGregor and Pfeffer.

Discuss different approaches to setting prices in a nonprofit organization. Includes a discussion of public and quasi-public goods.

Discusses the concept of a flexible budget (I.e., a budget adjusted for changes in volume and mix) and then how it can be supplemented with an analysis of other reasons for a variance from budgeted projections

Discusses the role of full costs in managerial decision making, and shows how to prepare a stepdown analysis as part of the Stage 1 effort. Discusses cost behavior and the analysis of differential costs in alternative choice decision making.

Discusses some of the complexities associated with capital investment decision making in nonprofit organizations when issues such as the value of a life are involved.

The NovaStar case describes the challenges faced by short seller Marc Cohodes of hedge fund Rocker Partners as he tried to expose what he thought was widespread fraud in mortgage lender NovaStar Financial. The case is set in the time period from 2001 to 2007 and tracks the growth of the subprime industry and its collapse leading to the financial crisis. The case describes the business model of NovaStar, a leading subprime mortgage lending company, and its accounting practices with a focus on the key risks and opportunities facing the company. The case requires students to put themselves in the shoes of Marc Cohodes in order to understand the business model and accounting numbers and to identify if the financial performance is a good representation of the true economic performance. In particular, students learn accounting concepts related to securitization, gain on sale accounting, valuation of available for sale securities, and analyzing the statement of cash flows. The case also allows students to understand the roles and incentives of various capital market participants such as sell-side analysts, the media, auditors, and the Securities and Exchange Commission (SEC).

The newly appointed general manager (GM) of a private golf club in a small community must step in to clean house after the club chooses not to renew the previous GM’s contract. The club has suffered a sizable revenue loss during its most recent year, and membership has declined well below the targeted level. Additionally, three senior managers have departed in the last few months and have been replaced with individuals who have very limited experience in the golf industry. The new GM must identify the issues he needs to address, prioritize them and develop an action plan. The golf season is set to begin in less than three months’ time, and the club cannot experience another disastrous financial year.

In 2012, the owner of a popular batting cage reveals financial details about her company’s long-lived assets for the purpose of completing the necessary fiscal-year accounting transactions.

The chief financial officer (CFO) and major shareholder of a small charter sport fishing company must prepare the company books for the fiscal year according to international financial reporting standards (IFRS) rules. The CFO must deal with both finance and operating leases.

For the past two decades, fair value accounting--the practice of measuring assets and liabilities at estimates of their current value--has been on the ascent, marking a major departure from the centuries-old tradition of keeping books at historical cost. Why has this happened? The author, an associate professor of business administration at Harvard Business School, offers one answer: The membership of the Financial Accounting Standards Board, which sets the standards for GAAP in the United States, has shifted over the decades to include more people from the financial services industry. Ramanna offers strong evidence that these executives prefer fair value and several possible motives for their preference. One, investment banks and asset managers are accustomed to using fair value in their day-to-day business. Two, GAAP profits defined on the basis of fair value rather than historical cost accelerate the recognition of gains, particularly in periods of rising asset prices. Three, the use of fair value to determine impairment of goodwill from M&A activity may impose less drag on earnings, potentially boosting M&A activity--a major revenue source for investment banks.

Spreadsheet supplement for case W12307.

The Diamonds Foods, Inc. case describes the major accounting blow up at the company in late 2011 that was triggered by a report by Off Wall Street, a prominent short selling research firm. Diamond Foods, a high flying growth company in 2011, grew from a walnut farmers' cooperative in 2005 into a branded snack foods manufacturer on the strength of a series of acquisitions. The accounting scandal that involved improper accounting for walnut purchases led to Diamond dropping its high profile acquisition of Pringles, an SEC and DOJ investigation, departure of the CEO and CFO, and the grounding of a high flying growth company. The case describes the history and growth of the company, the investigative and analytical work conducted by OWS and allows students to understand implications of the growth strategy for financial performance and valuation. Additionally, the case highlights the role of corporate boards and audit committees in managing strategic and financial reporting risks.

Supplement for case 113090

Supplement for case 113090

In early 2012, Investindustrial, a European private equity group, publicly announced their intention to sell their 76.7% stake in Ducati Motor Holding S.p.A., an iconic Italian producer of sport performance motorcycles. The decision followed a six-year turnaround during which Ducati returned to profitability and significantly expanded its product line. Investindustrial's team had the following exit alternatives: 1) a trade sale to an automotive buyer; 2) a secondary buyout, partial or complete, by a financial investor; 3) a relisting in Hong Kong. Each option had its pros and cons, but all required a careful valuation of Ducati to maximize the investors' return on their flagship investment.

The systematic analysis of an annual report of a large Canadian public company provides a framework and a set of skills and concepts to determine whether it is worth investing in the company. The detailed examination of the annual report includes an analysis of profitability — including return on capital employed, return on equity, return on sales, gross profit margin and asset turnover — and liquidity measures.

Supplement for case 110047