This collection of financial accounting cases is designed to help learners become financial statement users. Each case utilizes financial statement information (balance sheet, income statement, statement of cash flow and/or footnotes) and a number of topical questions.
I. BECOMING FAMILIAR WITH FINANCIAL REPORTING: BASICS, TOOLS, AND THE PERSISTENCE OF EARNINGS.
1. Basics--Interpretation and Preparation of Financial Statements.
ASICS Corporation--Understanding Financial Statements. Nike--Basic Ratio Analysis. Yokohama Rubber and Goodyear Tire--Comparing Ratios. Fuji Photo Film and Eastman Kodak--Inferring Transactions. Club Méditerranée S.A.--International GAAP. Food Lion, Inc.--Preparation of Financial Statements. Taiwan Semiconductor Manufacturing Company--Transactions and Periodic Adjustments. Abercrombie and Fitch--Transactions and Financial Statements.
2. Tools--Discounted Cash Flow.
Maya--Return on Investment. Hydron Technologies Corporation--Lease or Buy.
3. Tools--Basic Valuation and the Persistence of Earnings.
Maple Leaf Gardens--Valuation. Pharmacia Corporation--Persistence of Earnings.
4. Tools--Cash Basis versus Accrual Basis Reporting.
Frederick's of Hollywood--Statement of Cash Flows. Weis Markets, Inc.--Statement of Cash Flows. Mayor's Jewelers Inc.--Statement of Cash Flow.
II. EVALUATING FINANCIAL REPORTING DISCLOSURES: BALANCE SHEET COMPONENTS AND ISSUES IN THE QUALITY OF EARNINGS.
5. Assets.
Lucent--Revenue Recognition. Alcatel--Accounts Receivable. Whole Foods Market, Inc.--Inventory. Frederick's of Hollywood--Property and Equipment. WorldCom Inc.--Capitalizing Costs. Merck & Co., Inc.--Research and Development.eBay--Acquired Intangible Assets. America Online, Inc.--Deferred Costs.
6. Liabilities.
BASF--Contingencies and Provisions. Maytag Corporation--Warranties and Deferred Taxes. Bally Entertainment Corporation--Long-Term Debt. The Home Depot--Long-Term Debt. AMR Corporation--Leases. The Robert Mondavi Corporation--Deferred Taxes. Bethlehem Steel--Post Retirement Obligations.
7. Owners' Equity.
The Dow Chemical Company--Treasury Stock. Xilinx--Employee Stock Options.
8. Intercorporate Investments.
Wachovia--Marketable Securities. BCE Inc.--Investments in Other Companies. The Seagram Company--Investments in Common Stock.
9. Financial Statement Analysis.
Boston Beer & Lion Brewery--Financial Statement Analysis.