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A brief exercise to reinforce elements of manufacturing accounting and depreciation.

A young entrepreneur with a family background in the Thai restaurant business considers whether to open his own Thai restaurant. Students are asked to assess his capabilities as a restaurant manager/owner. Students must perform a qualitative size-up of the market and examine whether the chosen location is a good fit. A seating plan is to be designed as well. Students are to project an income statement and balance sheet and determine the impact on financial statements if sales increase or decrease 20 per cent from the original forecast. Based on their analysis, students are asked to determine if the restaurant should be opened.

Spreadsheet Supplement for case 107061.

Partners in a service firm are reviewing results for 2006, wondering whether large or small projects are more profitable. Present reports make small projects look more profitable. However, activity-based accounting reveals that large projects are more profitable and that concentrating sales efforts on large projects offers potential for greater profit in a service firm.

A small family-oriented recreation park owned by the Corporation of the City of London, Ontario, has received $6 million for improvements. Of this amount, $1 million has yet to be spent. Students are asked to (1) analyse the industry and competitive conditions for a family-oriented theme park; (2) organize and analyse survey results; (3) perform a straightforward sub-unit evaluation; (4) perform a vertical analysis; (5) complete two differential analyses (with varying difficulty); (6) project a statement of earnings; (7) recommend a financing alternative and (8) devise a promotional plan within the constraints of a budget.

Identify players in an industry on the basis of their accounting ratios, and draw conclusions about their strategies and relative performance.

Students are asked to assess a potential purchaser's personal goals and skills, as well as: financial feasibility, operating capacity and current promotional strategy to determine if a legal courier company should be purchased. Students are expected to develop detailed cash budgets, evaluate current pricing and promotional strategies, and to make recommendations about financing and the number of employees to hire under different volume assumptions.

Two young entrepreneurs are considering forming a business that provides new and innovative forms of advertising. Students are required to evaluate the venture, including whether the available financing is sufficient or if additional financing will be needed. Students are required to perform both a qualitative and quantitative analysis of the proposed business. Qualitatively, students must evaluate the partners' relevant capabilities as well as the business concept itself for potential success. Quantitatively, students must prepare a projected cash budget and projected financial statements for the first year of operations to gain a better understanding of the operation's cash needs and potential for financial success. This quantitative analysis will also provide students with answers to the partners' ability to make withdrawals from the business, the need for financing and the level of additional financing required, if any.

A non-profit organization, partnered with a microfinance organization would send undergraduate students from a business school to teach entrepreneurship in Third World countries: Kenya, India and South Africa. The case requires students to develop fairly straightforward cash budgets and to consider sensitivity analysis based on exchange rate fluctuations. Students are introduced to the concept of micro financing as an effective tool for improving the socio-economic status of entrepreneurs in Third World countries. Students are encouraged to think about relevant issues in gaining sponsorship for a non-profit venture.

Spreadsheet supplement for case 807073.

Supplement to KEL337

Supplements the (A) case.

An investor is deciding if she should invest in RONA Inc. RONA, a large Canadian hardware and renovation retailer headquartered in Boucherville Quebec. The company had experienced strong growth and had achieved considerable success. The investor was now prepared to analyse the financial data, provided as well as perform a size-up of the current and future direction of the company in order to make her decision.

Jenny Chen, CA, CFA, CMC has been hired by Jane Wallace of High Performance Tire. Jane, who inherited the firm from her parents, had successfully run the company for many years. When she transferred the responsibility to her son William in 2001, he began to make several changes in order to expand the number of outlets, diversify the product offering, and cut costs in the company. In 2004, the company was having difficulties and Jane decided to become more involved in the family business once again. Jenny's task is to review and analyze the company operations and make recommendations.

In 1999, Pulsar's chairman and CEO, Jenny Jones appointed her daughter-in-law, Kyla Jacobs-Jones to run Caltron. Caltron, a calculator manufacturer, was fully owned by Pulsar. Caltron was facing stiff competition from abroad, and in 2001 members of Pulsar's board of directors began to put pressure on Jones to divest it. Jacobs-Jones was given two years to turn the unit around before revisiting the decision to divest Caltron. In 2004, Dan O'Shea, CA, CFA, a corporate financial consultant with KPMG has been hired to review and analyze the company operations and make recommendations.

A business school graduate started The 10 Beach Hut as a sole proprietorship in January 2000. The company designed and sold beachwear in towns across Ontario, Canada. This exercise focuses on the preparation and interpretation of a cash flow statement.

The founder and president of Winston & Holmes must decide whether or not to expand the Yorkville location. Winston & Holmes is a fine tobacco and men's accessories shop. This year has proven to be a breakout year for the company and management had begun to question whether the Yorkville location needed to be expanded. The founder and president realized that the decision must be made soon, so that the upcoming Christmas sales season would not be affected by any construction.

Supplements the (A) case.

Kendall Square Research was a small competitor in the supercomputer industry. Sales grew rapidly in 1992 and early 1993 and the company sold stock to the public for the first time. Analysts forecast higher earnings for 1993, then the company's revenue recognition practices were questioned and the answers were devastating.

Late in October 2006, China Resources (Holdings) Co., Ltd. (CRC) CEO Charlie Song Lin, CFO Jiang Wel, and Information Center GM Derek Cheng were traveling from Hong Kong to Wuxi, China to attend the first ever meeting of China Resources Microelectronic's (CRM) newly established Office of Strategy Management (OSM). The team had high hopes for this meeting as CRM was not only one of CRC's most strategically important profit centers but also a potential model for the implementation of the CRC 6S management system in all of CRC's 19 profit centers.