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An investment advisor for National Securities Inc. had just met with a high-net-worth client to discuss equity investment opportunities in various industries or sectors. Her task was to help the client understand the importance of industry analysis as part of the stock selection process. In particular, she wanted to demonstrate how various industries were related to overall economic performance, as well as various industry life cycle stages. This case allows students to assess a particular industry, the auto parts industry, in order to categorize both the type and life cycle stage. This case is the first in a series of three cases that focus on a variety of stock investment decisions. (See 9A99N007 and 9A99N009.)

In 1999, an investment advisor for National Securities Inc. had just met with a client who was looking for some interesting stocks to add to his portfolio of investments. He wanted to understand how to analyze a particular company's financial statements and project earnings, and a target share price. This case allows students to assess a particular company's financial statements in order to determine, based on the Dupont method, the drivers behind internal growth. The price-earnings valuation method is also presented. This case is the second in a series of three cases that focus on a variety of stock investment decisions. (See 9A99N006 and 9A99N009.)

An investment advisor for National Securities Inc. was preparing to meet with a client. Based on the advisor's recommendation, the client had previously added an auto parts company to his portfolio of stock investments. Now, as he became more sophisticated, the client wanted to understand the potential benefits and risks of trading call options and put options. This case is the third in a series of three cases that focus on a variety of stock investment decisions. (See 9A99N006 AND 9A99N007.)

The Caspian region may become one of the world's next major energy producers. Azerbaijan, Kazakhstan, Turkmenistan, and Uzbekistan-all former Soviet republics--hold vast and largely undeveloped reserves of oil and gas, but the region's export infrastructure is nearly nonexistent. The Note provides background on Azerbaijan and Kazakhstan-the region's major oil producers-including economic and oil sector data. Also in A, it discusses major options to the surrounding region; B. Covering the advantages and weaknesses of each of the options.

Spreadsheet Supplement for case 299044

A money manager is assessing the long-term historical performance of three active acquirers: Symantec, Republic, and U.S. Office Products. The task for the student is to determine why rapid growth by acquisition might not always be good for investors.

Be Our Guest is a rapidly growing equipment rental company with substantial seasonality in its revenues and profits. In the spring of 1998, the senior management team is reviewing its financial plans in preparation for a meeting with the company's bank. The case provides an opportunity to forecast financial needs and consider the appropriate structure and amount of bank borrowing.

Chronicles the founding and initial growth of World Wrapps, a retail quick-service restaurant chain serving gourmet, internationally flavored burritos. Gives the backgrounds of the four founders and the origin of the idea to create World Wrapps and then details how they financed and created the first store in San Francisco. Immediately, the store was a success and the management team's attention quickly went to growth and streamlining the operations of individual stores so that they could provide products and service with quality and cost efficiency. Examines a number of decisions made and to be made relating to expansion: how fast to grow, whether to franchise, whether to do a joint venture with another company, etc. Also considers how they should respond to numerous important competitive threats on the horizon. Finally, focuses on a financing decision--they have competing offers from venture capital firms that each have their advantages and disadvantages. Students are asked to advise the management team on their financing decision.

Traces the evolution of Nike from 1987 through 1998. Through a series of eight assignment questions, it examines how the company has created and sustained a competitive advantage, and how that competitive advantage is reflected in growth, profitability, and share price performance.

The taxpayer purchased land and later transferred it to a family controlled corporation in return for an earn out. When funds were eventually received, the IRS treated them as dividends, whereas the individual and corporate taxpayers contended they were sums paid on the individual taxpayer's sale of a corporate asset to the corporation. The question is whether the original transfer to the corporation was a contribution to capital (equity) or the creation of a debtor/creditor relationship.

An employee is permitted to choose any one of three stock option plans. The first involves options that are in the money and must be exercised within 10 years. The second involves options that are at the money and must be exercised within 10 years. The third involves options that are at the money and must be exercised within 15 years. A wise decision requires students to consider a number of tax and nontax business considerations.

A small hydraulic-valve manufacturer attempts a second buyout in order to take out its current equity partners. A three-way deal must be negotiated between management, the new mezzanine lender, and the departing equity owners.

Spreadsheet Supplement for case 299079

British Columbia Hydroelectric found itself facing substantial foreign exchange losses in 1988 as a result of debt service requirements on large quantities of U.S. dollar denominated debt. The debt originated from the late 1970s and early 1980s when the U.S. dollar had been substantially weaker against the Canadian dollar. The Chairman of BC Hydro, Larry Bell, was now evaluating a number of alternative strategies to protect the provincial utility against further losses associated with this debt.

Spreadsheet Supplement for case 299048

Investitori Associati seeks to exit a leveraged buyout investment. Choosing the appropriate way in which to undertake their exit-an initial public offering or sale of the firm-proves problematic.

This note provides an overview of business valuation techniques. The discounted cash flow method is described in a simple six-step process. A numerical example is also provided. Other valuation methods are briefly discussed, including the price-earnings approach, break-up value, and an acquisition premium approach. This note is ideally suited for an executive audience. (A more in-depth note in this area can be found in A Note on Mergers and Acquisitions and Valuation, case number 9A95B023.)

Explores the location of the somewhat imprecise line between debt and equity. Identifies the primary business contexts that give rise to problems, the alternative tax consequences attending the debt versus equity determination, and the most prominent tests used to resolve the questions. Deals with corporate debt paying a market rate of interest and issued at par or close to it.

To teach present value analysis.

Examines the investment decision of Cabot Brown and Bill Burgin, two venture capitalists, to finance Car Wash Partners (CWP). CWP intends to purchase automatic car washes around the country. Investment strategy and deal structuring are discussed.