個案總覽

Spreadsheet Supplement for case 285131.

Arrow Electronics is the fastest growing distributor of electronic components in North America and the second largest. Its capital structure policy of heavy reliance on debt financing contrasts sharply with that of its leading competitor, Arnet. Students are asked to think through the whys, and how Arrow might go about reducing its business and financing risks.

Contains a history of the microcomputer software industry from the mid-1970s through early 1982. During that period growth was explosive. Many new companies were formed. However, the eventual structure of the industry was not yet clear. No truly dominant firms had appeared. The note is intended to provide background information on Lotus Development Corp. That case contains a description of the strategy and financing of a producer of software. The note could also be used as a basis for discussion of the evolution of industries per se.

Spreadsheet Supplement for case 285095.

Critics of American business claim that U.S. managers rely too heavily on a few financial techniques to weigh major investment decisions. Calculation of discounted cash flows, internal rates of return, and net present values, say critics, is inherently biased against long-term investments. But according to the authors, DCF procedures can work if management sets realistic hurdle rates and examines carefully its assumptions. Decision makers need to consider three critical issues: the effects of inflation, the different levels of uncertainty in different phases of a program, and management's own ability to mitigate risk.

Financial ratio analysis is used to evaluate the financial performance and condition of a business enterprise by measuring its progress towards financial goals. Its purpose is to provide information about the business entity for decision-making by both external and internal users. Terminology, definitions, and formulae (for vertical analyses, return on investment, investment utilization ratios, liquidity ratios, stability ratios, and growth ratios) are given in this technical note, and applied in a short exercise. This note would be suitable for a class in introductory finance.

The case describes the problem facing the president and credit manager of Warner-Lambert with respect to financial position of a major distributor. The distributor's financial statements have just been received by the company and the situation is much worse than anticipated. The survival of the distributor is clearly threatened and Warner-Lambert must consider a new distribution network for the territory.

A manufacturer is considering mechanizing a highly labour-intensive system. He has received proposals with the related cost savings from two different manufacturers for different parts of the process. The president must analyze the information and determine whether the various proposals are financially feasible.

The treasurer of Nortex, a clothing manufacturer and retailer, has been asked to determine Nortex's cost of capital. This will be used in evaluating the merits of future capital expenditures. A follow-up case with the same name (product 9A87B015) is available.

Financial ratio analysis is used to evaluate the financial performance and condition of a business enterprise by measuring its progress towards financial goals. Its purpose is to provide information about the business entity for decision-making by both external and internal users. Terminology, definitions, and formulae (for vertical analyses, return on investment, investment utilization ratios, liquidity ratios, stability ratios, and growth ratios) are given in this technical note, and applied in a short exercise. This note would be suitable for a class in introductory finance.

The taxpayer sold mining company stocks and was to be paid royalty as ore was extracted from the corporation's mine. Because the factual issues of whether ore would be extracted and, if so, how much and when were so indeterminate, the court held that the contract right to royalty payments could not be valued. There was no "realization." Recognition would be postponed until payments were actually received.

Gulf Oil was pressured into liquidation while under attack by Boone Pickens of Mesa Petroleum Co. Gulf management was unsure whether to sell out or take the firm private. A suitor, Standard Oil of California, tries to decide how much, if anything, to bid for the privilege of owning Gulf.

Shareholders, who are the most important constituency of the modern corporation because they bear its residual risk, benefit most directly from acquisitions because of the increase in the value of target company shares. Many current criticisms directed at takeover activity are wrong or based on faulty logic. Takeovers protect shareholders from mismanagement of a corporation as they allow alternative management teams to compete for the right to manage the corporation's assets. The takeover market provides a unique, powerful, and impersonal mechanism to accomplish the major restructuring and redeployment of assets continually required by changes in technology and consumer preferences.

Describes the events surrounding the sale of a particular large block of a thinly traded stock. Brings the situation to the point at which the seller has received an offer, and must now decide what to do.

Supplements the (A) case.

Spreadsheet Supplement for case 285042.

Spreadsheet Supplement for case 285041.

Introductory note describing the basic building blocks of Markowitz's mean-variance portfolio theory.

In two cases consolidated for decision, the Court articulates the tests to be used when deciding whether an item is income or a gift and therefore, not income. Both cases are colorful. The first involves the unsolicited receipt of a Cadillac. The second involves transfer by the much photographed Trinity Church which sits at the end of Wall Street.

A U.S. manufacturing organization and a Eurobank swap fixed and floating rate obligations to reduce their financing costs.