The exercise offers students an intriguing learning scenario, involving analysis of the financial statements of 13 anonymized but well-known companies from diverse industries and sectors using financial ratios to eventually identify them. All 13 companies in the exercise are listed on the National Stock Exchange of India and were selected using National Industrial Classification codes. Moreover, the selected companies are taken from the top three firms in terms of market capitalization within each industry sector. The exercise provides financial data from the balance sheets and income statements of the 13 anonymized companies. Students are required to first categorize the anonymized companies into broad sectors and then identify their specific industry. Last, students are asked to identify the names of the anonymized companies. The sample has been divided into two categories: a training set and a testing set. Students should use the training set to develop a blueprint (a set of procedures) to identify the companies based on the sectoral and industrial characteristics reflected in their financial statements. They should then validate the blueprint by applying it to determine the identity of the companies in the testing set.
Instacart is an online grocery delivery platform that is seeking to go public through an initial public offering (IPO). Instacart has hired an investment bank to be its lead bookrunner, and the bank is responsible for coming up with an IPO price range. Maya Martinez, an investment banking analyst at the firm, has been tasked with building financial models to come up with an appropriate share range for the firm’s managing directors to present at the IPO roadshow.
In 2021, an investment management firm analyst needed to convince his portfolio manager that technology companies such as Amazon.com Inc. (Amazon) could have a strong investment thesis since they improved upon existing business models. To make his argument, he used financial ratio analysis to compare one of the portfolio manager's favourite companies, Walmart Inc. (Walmart), with a more technologically focused competitor in the retail space, Amazon. By analyzing the two companies using ratio analysis to highlight their similarities, the analyst sought to show his portfolio manager that Amazon was not only a technology company, but a better version of Walmart.
With the enactment of the long-awaited U.S. security-based crowdfunding regulations in May 2016, early-stage private companies can utilize regulatory crowdfunding to raise funds on digital platforms via multiple nonaccredited investors. To protect such small microinvestors and maintain market efficiency, the Securities and Exchange Commission (SEC) requires extensive disclosure information in filings. However, with many ventures being new, small, or lacking in experience, there has been little practical guidance on best practices for navigating such disclosures-particularly to enhance funding prospects. We aim to address this gap by focusing on two crucial aspects of disclosures: financial reporting and the disclosure narrative. We draw on extant research in the field and outline the best disclosure practices for potential regulatory crowdfunding issuers based on signaling theory and institutional theory. Our recommendations offer a simple but practical guide to SEC financial reporting and disclosures for successful regulatory crowdfunding.
A 19-year-old student had just started university studies and was confronted by the financial challenges that many young adults faced as they embarked on their own life away from home. Her parents provided for her education and many basic living expenses, but there were still many unexpected costs and social life expenses to plan for. After an interesting conversation about personal finances with her friends, the student decided to start her own financial plan to resolve some important questions and to set some key financial objectives for her future.
This note is about tokenization and tokenized assets. Tokenization refers to the process of creating a representation of a particular asset on a blockchain via digital tokens. Tokenized assets typically derive their value from the value of the underlying asset. This note explores the benefits and risks of tokenization, as well as use cases. Moreover, it explores Security Token Offerings, considerations for tokenized asset issuers, and the Howey Test. It concludes with a consideration of how possible future trends may affect tokenization.
In March 2022, Jack Jelinek and Mikey Woolfson, co-founders and co-owners of CRANK Lite Bev Corp (Crank), were considering whether they should sell their beer (Crank Lite Lager) at the Northern Heat Rib Series (Ribfest). As an Oakville, Ontario-based brewery startup that launched during the COVID-19 pandemic, Crank had already taken on a large amount of risk, and Jelinek and Woolfson were unsure of whether they could afford to take on additional risk. However, they wished to continue growing their business to eventually get acquired by another company. Jelinek and Woolfson wanted to determine whether the Ribfest opportunity made sense from a qualitative and quantitative perspective.
Happiness Capital is a global venture capital firm within the hundred-year-old Lee Kum Kee Group with a mission to bring happiness to the community and the world through venture investments. As the founding Lee family progressed into the fifth generation, it wanted to diversify into a business that would also benefit the society, and impact investing emerged as an answer as it was a cause that resonated across different generations of the family. Happiness Capital undertook the pioneering initiative to co-create the "Happiness Return Framework" together with industry experts, addressing the issue of impact measurements often encountered in impact investing. The case examines how Happiness Capital defines and measures happiness with its proprietary "Happiness Return Framework," as well as examining its investment strategies, process, performance, risk management, organization and governance.
Minko Platforms Pvt. Ltd. (Minko) was a financial technology (fintech) lending startup that specialized in providing supply chain distribution financing to small retailers that sourced inventory from fast-moving consumer goods (FMCG) distributors. The company faced a dilemma in determining how to scale up. Should it continue to focus on distributor-retailer transactions, a market where it had already gained experience and penetration? Or should it target the higher value stockist-distributor transactions further up in the supply chain? The latter would be more remunerative but would also have more potential competition. The company’s situation was further complicated when the Reserve Bank of India (RBI) released new guidelines on digital lending that would significantly impact its operations. As a result, company leaders were also evaluating whether Minko should continue as a fintech company or procure a licence to operate as a non-banking finance company (NBFC).
Kamrul Tarafder was the President and CEO of ASA Philippines Foundation, a social enterprise dedicated to empowering women by providing microloans for them to start or run small businesses. Unlike traditional microfinance models, these loans are underwritten by able family members and disbursed in groups to reduce administrative costs. The organisation's prudent approach to screening, delivery and collection, which includes starting repayment before the tenure of the loan is over, has made ASA Philippines shape a successful model which aims to solve some challenges of the Grameen cooperative model. Throughout challenging economic periods, Tarafder maintained a strong commitment to financial inclusion by extending the loan duration or waiving loans to support borrowers during difficult times. He operated a sustainable business model by raising funds in the capital markets and ensuring timely repayments to build a positive track record and a credible reputation with lenders. Tarafder hoped to share his insights and strategies with other stakeholders in the industry in order to amplify the impact of microfinance on poverty alleviation and economic empowerment.
The accounts manager at the Commercial Bank of Canada, was reviewing a loan application from Pasquale’s Pizzeria, located in Sarnia, Ontario. The business owner was ready to expand his family’s business to London, Ontario, having requested a $300,000 long-term loan to finance the renovations and equipment to begin operations in London. They also requested a $20,000 line of credit to help fund the day-to-day operations of the business. The restaurant had never requested a loan of such magnitude, nor had the business undergone an expansion in its lifetime. With COVID-19 changing the food delivery landscape, the accounts manager was confident in his ability assess whether or not Pasquale’s was ready to take on this expansion plan.
Edward Jones, a wealth management advisory from that prided itself on its interpersonal connections and face-to-face interactions, was eager to augment their services with AI capabilities. Built on 1-to-1 close-knit relationships, the firm had more than 15,000 offices conveniently located across the U.S. and Canada. Following the Covid-19 pandemic, Edward Jones' Managing Partner, Penny Pennington, believed their human-centric approach could be enhanced to better serve their clients by leveraging historical client and calling data to improve the client experience and the customization of advice. In particular, AI's ability to integrate all records of past advisor experiences could deliver hyper-personalized insights and financial solutions. Still, Pennington wondered if Edward Jones was deviating too far from its differentiated approached of person-to-person connections. Considering Edward Jones' original business approach, how might digitization and AI transform their competitive advantage? Was there a proper balance between the use of AI and human connection? How would Pennington ensure that the AI-generated expertise would properly represent and attest to each client's specific needs?
Activist shareholders are often seen as villains by managers and boards. Their demands for strategic and organizational shifts-which can feel personal to managers-often challenge the soundness of a company's strategy. However, leaders who treat activist shareholders solely as a risk or an annoyance are making a mistake. Although they may be aiming to protect their companies, they're missing out on an opportunity to tap one of the few free resources companies have to bring about value‑creating strategic change and build stronger business models. To better respond to-and take advantage of-the campaigns of activists, leaders must learn to think the way they do. Most activists tend to follow a predefined process to identify and engage target companies. This article presents the three main components of the activist playbook-linking performance failures to organizational weaknesses, developing a plan of action, and creating a narrative in support of change-and describes how managers can anticipate and respond to activist campaigns.
Caesars Entertainment was a large casino operator in the United States that had been purchased in a 2008 leveraged buyout by Apollo and TPG. In January 2015, Caesars Entertainment Operating Company (CEOC), its largest subsidiary, filed for Chapter 11. This set up a battle between the company and a set of large, distressed investors. At issue was not only how to restructure the business and reduce Caesars' debt, but also multiple lawsuits alleging that the company had damaged creditors in their quest to preserve equity value. Of particular focus were a series of transactions that took place during 2013 and 2014 to sell assets from one subsidiary to another and to eliminate a valuable parent guarantee that had been granted to CEOC creditors. This case provides a good example of a variety of "defensive maneuvers" employed by companies and their private equity sponsors to protect a troubled investment.
Vedanta Limited (VEDL), an Indian conglomerate, operated in natural resources business segments, including aluminum, power, steel, oil and gas, and base metals segments such as copper, zinc, lead, silver. In September 2023, the company’s market value was approximately half of its intrinsic value, as its individual business segments were estimated to be worth significantly more operating independently.<br><br>The chair of VEDL needed to take the necessary steps to enhance shareholder value by unlocking conglomerate discounts. The combined segments were perceived to generate negative synergies for the conglomerate, as indicated by the trading multiples of comparable companies. In looking for viable ways to eliminate the discount, he had to choose among the following options: (1) a share repurchase, (2) divestiture, (3) a spinoff of one or more segments, or (4) a spinoff of all segments.