The managing partner of a relatively new consulting firm is concerned because training costs at the firm’s new training center are higher than expected. Analysis of actual costs compared to those expected is required. In addition, he is considering capitalizing some training costs for later amortization. A management control system for the center is also a priority.
HBS Number: 9-199-006 Type: Case (Gen Exp)
Publication Date: 12/3/1998 Revision Date: 1/26/1999
Geographic Setting: United States Industry Setting: consulting Number of Employees: 10,000
Event Year Start: 1994 Event Year End: 1994
Subjects: Accounting policies; Consulting; Control systems; Cost analysis; Financial analysis; Financial reporting; Management accounting; Management controls
Source: Harvard Business School Cases – Accounting and Control
A distiller increases whiskey production and income declines because of accounting methods in use. Questions are raised regarding the treatment of expenditures which can be classified as production, inventory, or period costs. The necessary aging process raises added questions about prior period restatements and needed financing. A rewritten version of an earlier case by R.F. Vancil and R.H. Deming.
HBS Number: 9-189-065 Type: Case (Field)
Publication Date: 3/6/1989 Revision Date: 6/28/1993
Geographic Setting: Tennessee Industry Setting: liquor distillery
Company Size: small Gross Revenues: $42 million revenues
Event Year Start: 1988 Event Year End: 1988
Subjects: Accounting procedures; Beverages; Cost allocation; Cost analysis; Financing; Inventory management
Supplementary Materials: Teaching Note, (5-189-172), 8p, by William J. Bruns Jr.
Source: Harvard Business School Cases – Accounting and Control
A small company in the graphic arts business faces severe price competition. The company has to respond by cutting costs and making process improvements. Teaching Purpose: To introduce job costing, activity based costing, cost controls, process improvements, and product pricing concepts in a very simple setting.
HBS Number: 9-197-040 Type: Case (Field)
Publication Date: 12/9/1996 Revision Date: 2/19/1998
Geographic Setting: Los Angeles, CA Industry Setting: pre-press
Company Size: small Number of Employees: 20 Gross Revenues: $3.5 million revenues
Event Year Start: 1996 Event Year End: 1996
Subjects: Cost control; Printing; Profitability analysis; Small business
Supplementary Materials: Teaching Note, (5-198-110), 10p, by V.G. Narayanan
Source: Harvard Business School Cases – Accounting and Control
Publication Date: 03/23/1995 Revision Date: 04/22/1997
Product Type: Case (Field)
Product Description: A British bank with strong roots in the cooperative movement encounters declining profitability in an increasingly competitive and deregulated financial services industry. It attempts to grow by broadening its customer base and increasing the range of products and services offered. It turns to activity-based costing as part of its reengineering effort to learn more about the process and product costs and customer profitability, and contemplates what actions to take based on this new information.
HBS Number: 9-195-196
Geographic Setting: England Industry Setting: banking Gross Revenues: L300 million deposits
Event Year Start: 1993 Event Year End: 1993
Subjects: Activity based costing; Banking; Cost accounting; Cost analysis; Cost systems; Management accounting; United Kingdom
Academic Discipline: Accounting & control
Supplementary Materials: Teaching Note, (5-198-078), 5p, by Robert S. Kaplan
Source: Harvard Business School Cases – Accounting and Control
Publication Date: 03/16/1990 Revision Date: 06/29/1993
Product Type: Case (Field)
Product Description: The company has committed to major improvements in quality, cost, and on-time delivery performance. Despite strong senior management support, however, the actual rate of improvement was disappointing until a new measurement philosophy was introduced. The new approach specified expected rates of improvement and compared actual improvements to the expected rate. Operational people preferred the new measures to the monthly financial reports they continued to receive. The case explores the conflicts between financial measurements and operating improvements.
HBS Number: 9-190-061
Geographic Setting: Massachusetts Industry Setting: semiconductor
Company Size: mid-size Gross Revenues: $440 million sales
Event Year Start: 1989 Event Year End: 1989
Subjects: Cost control; Learning curves; Management accounting; Productivity; Quality control; Semiconductors
Academic Discipline: Accounting & control
Supplementary Materials: Teaching Note, (5-191-103), 10p, by Robert S. Kaplan
Source: Harvard Business School Cases – Accounting and Control
Publication Date: 05/04/1987 Revision Date: 11/04/1998
Product Type: Case (Field)
Product Description: The division has recognized the inadequacies of its existing, traditional cost system for estimating product costs. Describes the innovative activity-based system that was developed to more accurately trace overhead costs to individual products. Provides students with the opportunity to critique a standard cost system and to assess the characteristics of the proposed system that traces costs to production activities. May be used with: (9-187-108) John Deere Component Works (B).
HBS Number: 9-187-107
Geographic Setting: Midwest Industry Setting: farm equipment
Company Size: Fortune 500 Gross Revenues: $3.1 billion sales
Event Year Start: 1985 Event Year End: 1985
Subjects: Activity based costing; Cost accounting; Cost allocation; Cost systems; Manufacturing
Academic Discipline: Accounting & control
Supplementary Materials: Teaching Note, (5-188-049), 22p, by Robert S. Kaplan
Source: Harvard Business School Cases – Accounting and Control
Publication Date: 05/22/1997 Revision Date: 03/16/1999
Product Type: Case (Gen Exp)
Product Description: An independent regulated telephone company has established a computer services subsidiary that seems to remain unprofitable. Managers must determine whether it is profitable or not and consider changes in pricing or promotion that might improve profitability. Teaching Purpose: To introduce concepts of relevant costs, contribution, and breakeven analysis. A rewritten version of an earlier case.
HBS Number: 9-197-097
Geographic Setting: United States Industry Setting: telecommunications
Event Year Start: 1997 Event Year End: 1997
Subjects: Breakeven analysis; Communications industry; Computer systems; Cost analysis; Profitability analysis
Academic Discipline: Accounting & control
Supplementary Materials: Teaching Note, (5-197-098), 7p, by William J. Bruns Jr.
Source: Harvard Business School Cases – Accounting and Control
Publication Date: 09/25/1986 Revision Date: 04/01/1990
Product Type: Case (Field)
Product Description: Mueller-Lehmkuhl sells apparel fasteners and rents attaching machines. It views these two products as effectively a single item and prices them accordingly, the fasteners at high profit and its attaching machines at a loss. The cost system allocates the cost of the attaching machines to the fasteners. The Japanese have entered the market and found a way to unbundle the two products. As a result they are challenging the European way of doing business. The case asks the student to analyze the true cost and profitability of the products.
HBS Number: 9-187-048
Geographic Setting: Germany Industry Setting: light manufacturing
Company Size: mid-size Gross Revenues: $100 million sales
Event Year Start: 1985 Event Year End: 1985
Subjects: Cost accounting; Cost allocation; Cost analysis; Profitability analysis; Strategic planning; Strategy formulation
Academic Discipline: Accounting & control
Supplementary Materials: Teaching Note, (5-187-049), 15p, by Robin Cooper
Source: Harvard Business School Cases – Accounting and Control
Describes the cost control system used at an automobile engine plant for labor and overhead costs. The finance staff prepares daily, weekly, and monthly variance reports against budgets. Department supervisors, finance staff, and the plant manager discuss the use and interpretation of these reports. Also describes the company’s budgeting procedures, which include a performance improvement factor to motivate annual productivity gains and cost reductions. Allows the class to discuss whether the extensive and detailed variance analysis systems promote valuable managerial objectives such as cost control, learning, and improvement. A big issue is whether an emphasis on meeting short-run budgets inhibits longer-term improvements in quality and productivity.
HBS Number: 9-197-099 Type: Case (Field)
Publication Date: 4/23/1997
Geographic Setting: Midwest Industry Setting: automobiles
Company Size: large Gross Revenues: $1.3 billion revenues
Event Year Start: 1992 Event Year End: 1992
Subjects: Automobiles; Cost control; Cost systems; Management accounting; Plant management; Variance analysis
Source: Harvard Business School Cases – Accounting and Control
Publication Date: 02/14/2000 Revision Date: 02/14/2002
Product Type: Case (Field)
Product Description: Examines the use of activity-based (or menu) pricing at Owens & Minor (O&M). A forward-thinking manager at O&M, a large national medical and surgical distribution company, enlisted the help of both logistics and cost managers to develop an innovative pricing schedule based on the customer’s activities instead of the price of the product. The existing cost-plus pricing structure made it impossible for O&M to price services appropriately. However, he encounters customer resistance to his new proposal. Teaching Purpose: To introduce students to activity-based pricing/menu-pricing in a medical supply distribution company. May be used with: (9-100-079) Owens & Minor, Inc. (B).
HBS Number: 9-100-055
Geographic Setting: Richmond, VA Industry Setting: health care supply Number of Employees: 4,200 Gross Revenues: $3 billion revenues
Event Year Start: 1996 Event Year End: 1999
Subjects: Accounting; Activity based costing; Distribution; Materials management; Medical supplies; Performance measurement; Pricing; Supply chain
Academic Discipline: Accounting & control
Supplementary Materials: Teaching Note, (5-100-100), 12p, by V.G. Narayanan, Lisa Brem
Source: Harvard Business School Cases – Accounting and Control
Insteel implements an ABC system in 1996. It finds pallet nails to be its most profitable product and decides to expand the number of cells making pallet nails from two to four. A repeat of the ABC study in 1997 shows pallet nails have become the least profitable product. Teaching Purpose: Cost allocation in the presence of excess capacity.
HBS Number: 9-198-087 Type: Case (Field)
Publication Date: 2/20/1998 Revision Date: 9/29/1998
Geographic Setting: South Carolina Industry Setting: steel/wire & nails Gross Revenues: $300 million revenues
Event Year Start: 1996 Event Year End: 1997
Subjects: Capacity planning; Cost accounting; Cost allocation; Profitability analysis; Steel
Supplementary Materials: Teaching Note, (5-198-111), 8p, by V.G. Narayanan, Ratna Sarkar
Source: Harvard Business School Cases – Accounting and Control
Describes the design and implementation of an activity-based costing project undertaken by Stream International’s Crawfordsville, Indiana facilities. After analyzing the costs assigned to 161 work activities, Crawfordsville managers present five proposals for change based on ABM results, then meet to decide which to implement. Teaching Purpose: Description of the project is valuable, but the most significant learning unfolds with the analysis of the proposals.
HBS Number: 9-196-134 Type: Case (Field)
Publication Date: 4/1/1996 Revision Date: 4/25/1996
Geographic Setting: Crawfordsville, IN Industry Setting: software Gross Revenues: $1.3 billion revenues
Event Year Start: 1995 Event Year End: 1995
Subjects: Activity based costing; Cost accounting; Cost analysis; Cost control; Cost systems
Supplementary Materials: Teaching Note, (5-198-079), 10p, by Robert S. Kaplan
Source: Harvard Business School Cases – Accounting and Control
Publication Date: 07/27/1989 Revision Date: 04/27/2001
Product Type: Case (Field)
Product Description: Multinational company needs an improved cost system to determine the profitability of individual customer orders. Its strategy is to have significant sales and profitability growth without adding additional administrative and support people. The new cost system assesses a charge to each customer order received and an additional surcharge if the item ordered is not normally stocked. The goal is to direct sales resources to the most profitable customers: those who buy standard products in large predictable quantities with minimal demands on technical resources.
HBS Number: 9-190-002
Geographic Setting: Sweden Industry Setting: wire
Company Size: mid-size Gross Revenues: $160 million sales
Event Year Start: 1987 Event Year End: 1987
Subjects: Cost accounting; Cost allocation; Cost systems; Customer relations; Management accounting; Sales strategy; Scandinavia
Academic Discipline: Accounting & control
Supplementary Materials: Supplement (Field), (9-190-003), 4p, by Robert S. Kaplan; Teaching Note, (5-190-115), 14p, by Robert S. Kaplan
Source: Harvard Business School Cases – Accounting and Control
Banking company noting declining profitability from its traditional lending activities has started to measure the total profitability of its lending relationships. A loan pricing model estimates the profit and return-on-equity from commercial loans. Additional work was required to recognize the revenue from fee-for-service business for the same customer that is performed by other units in the bank. The case raises the problem of how revenues and expenses from diverse activities can be combined to produce an accurate picture of customer profitability.
HBS Number: 9-191-068 Type: Case (Field)
Publication Date: 10/9/1990
Geographic Setting: New York Industry Setting: banking Gross Revenues: $60 billion assets
Event Year Start: 1988 Event Year End: 1990
Subjects: Banking; Cost systems; Customer relations; Profitability analysis
Supplementary Materials: Teaching Note, (5-191-208), 7p, by Robert S. Kaplan
Source: Harvard Business School Cases – Accounting and Control
Pillsbury is transforming itself from an integrated producer of flour and bakery products to a value-added supplier of premium branded products. After initial successes applying activity-based costing to manufacturing operations, two senior executives decide to collaborate to propose a major reengineering project across the company’s entire value chain. The case describes the project’s definition and scope to yield projected annual cost savings and margin improvement between $100 and $300 million.
HBS Number: 9-195-144 Type: Case (Field)
Publication Date: 4/12/1995 Revision Date: 4/26/1995
Geographic Setting: United States Industry Setting: food processing
Company Size: Fortune 500 Gross Revenues: $4 billion sales
Event Year Start: 1994 Event Year End: 1994
Subjects: Activity based costing; Cost analysis; Customer relations; Food processing industry; Management accounting; Reengineering
Supplementary Materials: Teaching Note, (5-199-021), 8p, by Robert S. Kaplan
Source: Harvard Business School Cases – Accounting and Control
Publication Date: 02/17/1995 Revision Date: 06/10/1999
Product Type: Case (Field)
Product Description: The retail bank division of Chemical Bank faces declining margins and increased competition in its credit and deposit gathering and processing business. It wishes to implement a new strategy to become a preferred financial service provider to target customer groups. The division adapts the balanced scorecard to clarify and communicate the new strategy and to identify the key drivers for strategic success. The case describes the development of strategic objectives and measures for four perspectives: financial, customer, internal, and learning growth, and the process for implementing the new measurement and management system.
HBS Number: 9-195-210
Geographic Setting: New York Industry Setting: banking
Event Year Start: 1993 Event Year End: 1994
Subjects: Banking; Management accounting; Performance measurement; Strategy implementation
Academic Discipline: Accounting & control
Supplementary Materials: Teaching Note, (5-198-090), 5p, by Robert S. Kaplan
Source: Harvard Business School Cases – Accounting and Control
A privately owned German power tool company was dissatisfied with its existing cost system. The system could not produce timely accurate reports on cost center operations, and newly purchased automated machines were attracting large overhead costs. A new, highly automated system was designed and installed that used 600 cost centers and an appropriate activity base chosen for each center. The case shows the design of a highly accurate cost control system with flexible budgets used in both support and production cost centers.
HBS Number: 9-189-146 Type: Case (Field)
Publication Date: 3/21/1989 Revision Date: 3/30/1999
Geographic Setting: Germany Industry Setting: power tools
Company Size: mid-size Gross Revenues: $160 million sales
Event Year Start: 1985 Event Year End: 1985
Subjects: Budgeting; Cost control; Cost systems; Germany; Management accounting; Tools
Supplementary Materials: Teaching Note, (5-191-098), 6p, by Robert S. Kaplan
Source: Harvard Business School Cases – Accounting and Control
Publication Date: 07/01/1957 Revision Date: 01/02/2003
Product Type: Case (Field)
Product Description: Involves transfer pricing among three divisions of a company.
HBS Number: 9-158-001
Geographic Setting: Unspecified Industry Setting: paper and allied products
Subjects: Cost analysis; Decentralization; Paper industry; Transfer pricing
Academic Discipline: Accounting & control
Supplementary Materials: Teaching Note, (5-199-057), 9p, by Robert L. Simons, Antonio Davila
Source: Harvard Business School Cases – Accounting and Control
Shows an example of how policies about budgeting and resource decisions are commonly misallocated. Teaching Purpose: To discuss the common types of policies and control systems that are not set up efficiently.
HBS Number: 9-897-069 Type: Case (Field)
Publication Date: 12/6/1996
Geographic Setting: Cambridge, MA Industry Setting: education
Subjects: Budgeting; Control systems; Decentralization; Decision making; Higher education
Source: Harvard Business School Cases – Accounting and Control
Explores Toyota’s target costing system, considered to be the most advanced such system of any major Japanese manufacturer. Specifically, describes Toyota’s process of setting rigorous cost-reduction goals and the steps taken to achieve them.
HBS Number: 9-197-031 Type: Case (Field)
Publication Date: 5/30/1997
Geographic Setting: Japan Industry Setting: automotive
Subjects: Automobiles; Cost accounting; Cost control; Japan; Product design; Product development
Source: Harvard Business School Cases – Accounting and Control
Explores Olympus Optical’s strategic response to major losses in its camera business. Key to Olympus’s recovery were its extensive product planning process, a quality improvement program, and an aggressive cost-reduction program. In particular, the case details Olympus’s target costing system, which enabled the firm to design high-quality products at low cost. May be used with: (9-195-073) Olympus Optical Co. Ltd. (B): Functional Group Management.
HBS Number: 9-195-072 Type: Case (Field)
Publication Date: 8/31/1994 Revision Date: 5/30/1997
Geographic Setting: Japan Industry Setting: electronics, consumer products
Event Year Start: 1990 Event Year End: 1993
Subjects: Cost control; Cost systems; Electronics; Japan; Product development
Supplementary Materials: Teaching Note, (5-195-074), 9p, by Robin Cooper
Source: Harvard Business School Cases – Accounting and Control
Describes the various value engineering techniques used by Isuzu. Shows how Isuzu reduces the cost of its products while increasing their functionality within the constraints of a target cost.
HBS Number: 9-195-054 Type: Case (Field)
Publication Date: 10/12/1994
Geographic Setting: Japan Industry Setting: automotive
Event Year Start: 1990 Event Year End: 1993
Subjects: Automobiles; Cost control; Japan; Product development
Supplementary Materials: Teaching Note, (5-195-055), 6p, by Robin Cooper
Source: Harvard Business School Cases – Accounting and Control
Describes Nissan’s sophisticated target costing system in the context of new product introduction. On the basis of consumer analysis and a life cycle contribution study, Nissan conducts an exhaustive analysis of component costs to determine whether a new model can be profitably manufactured. Cost reduction measures are then pursued both internally and with suppliers to ensure that the model can be produced to the target cost. The target costing system is central to Nissan’s continued competitiveness in the fiercely contested Japanese automobile market.
HBS Number: 9-194-040 Type: Case (Field)
Publication Date: 3/17/1994 Revision Date: 10/14/1994
Geographic Setting: Japan Industry Setting: automotive
Company Size: large
Event Year Start: 1990 Event Year End: 1993
Subjects: Automobiles; Cost accounting; Cost control; Product design; Product development; Product introduction
Supplementary Materials: Teaching Note, (5-195-063), 7p, by Robin Cooper
Source: Harvard Business School Cases – Accounting and Control
Publication Date: 05/15/1997 Revision Date: 05/14/2004
Product Type: Case (Gen Exp)
Product Description: The company must decide whether to acquire new equipment to offer a new product line. The question is whether equipment will meet return on investment targets considering depreciation and taxation of profits. The equipment is acquired, but one year later better equipment becomes available. Teaching Purpose: A review of all major issues to be considered in analyzing new equipment proposals. A rewritten version of an earlier case.
HBS Number: 9-197-102
Geographic Setting: Switzerland Industry Setting: plastics
Event Year Start: 1997 Event Year End: 1997
Subjects: Capital budgeting; Capital investments; Cost analysis; Machinery; Present value; Return on investment; Switzerland
Academic Discipline: Accounting & control
Supplementary Materials: Teaching Note, (5-197-109), 11p, by William J. Bruns Jr.
Source: Harvard Business School Cases – Accounting and Control
Publication Date: 02/24/1984 Revision Date: 02/28/1986
Product Type: Case (Library)
Product Description: Disequilibrium in the $350 million TiO2 market has prompted Du Pont’s Pigments Department to develop two strategies for competing in this market in the future. The growth strategy has a smaller internal rate of return than the alternative strategy due to large capital outlays in early years and positive cash flows arising only in later years. However, it is the more valuable project on a net present value basis for all discount rates less than 21%. Students are faced with the task of converting strategic plans and objectives into free cash flow projections and determining a breakeven discount rate between these mutually exclusive projects. A decision about which strategy to pursue must then be made. Rewritten version of an earlier case by the same author.
HBS Number: 9-284-066
Geographic Setting: United States Industry Setting: chemicals
Company Size: Fortune 500 Gross Revenues: $4 billion assets
Event Year Start: 1972 Event Year End: 1972
Subjects: Capital budgeting; Chemicals; Financial management; Present value; Rates of return; Return on investment; Strategic planning
Academic Discipline: Finance
Supplementary Materials: Teaching Note, (5-289-005), 10p, by W. Carl Kester
Source: Harvard Business School Cases – Finance
Publication Date: 02/05/1996 Revision Date: 11/26/2003
Product Type: Case (Field)
Product Description: A new administration in the City of Indianapolis is initially determined to privatize many municipal services. Before taking this action, however, the city managers want to know the current cost of performing these services with the municipal workers. Existing financial systems record how much the city has been spending by functional categories and departments, but contain no information about the cost of providing services. The city establishes a task force to develop activity-based (ABC) estimates of the cost of filling potholes. It shows the information to the municipal workers and allows them to institute new cost-saving procedures so they can submit their own bid in competition with private contractors. This case describes the development of the ABC model and the reaction of the city workers to the newly revealed information.
HBS Number: 9-196-115
Geographic Setting: Indianapolis, IN Industry Setting: government Number of Employees: 3,600 Gross Revenues: $500 million sales
Event Year Start: 1992 Event Year End: 1994
Subjects: Activity based costing; Cost accounting; Local government; Management accounting; Privatization
Academic Discipline: Accounting & control
Supplementary Materials: Supplement (Field), (9-196-117), 5p, by Robert S. Kaplan; Teaching Note, (5-198-066), 7p, by Robert S. Kaplan
Source: Harvard Business School Cases – Accounting and Control
Two brothers start a boatyard. The case covers the start-up and initial operating period. Students are required to prepare a sample income statement, balance sheet, and cash flow statement. Teaching Purpose: Introduction to preparing financial statements from unstructured data.
HBS Number: 9-196-041 Type: Case (Gen Exp)
Publication Date: 7/19/1995
Geographic Setting: United States Industry Setting: retailing
Company Size: start-up Gross Revenues: $200,000 revenues
Event Year Start: 1995 Event Year End: 1995
Subjects: Accounting procedures; Financial reporting; Shipbuilding
Supplementary Materials: Teaching Note, (5-197-088), 4p, by David F. Hawkins
Source: Harvard Business School Cases – Accounting and Control
An introductory case in cash flow analysis and the preparation of statements of cash flows. Based on the 1991 income statement and balance sheet at a ski resort company, the case provides additional information which allows a student to prepare both a direct and an indirect statement of cash flows. A rewritten version of an earlier case.
HBS Number: 9-192-150 Type: Case (Library)
Publication Date: 6/23/1992 Revision Date: 6/28/1993
Geographic Setting: California, Utah Industry Setting: skiing
Company Size: small Gross Revenues: $20 million revenues
Event Year Start: 1991 Event Year End: 1991
Subjects: Accounting policies; Cash flow; Management accounting; Recreation
Supplementary Materials: Teaching Note, (5-193-128), 6p, by William J. Bruns Jr.
Source: Harvard Business School Cases – Accounting and Control
Publication Date: 08/11/2000 Revision Date: 10/25/2002
Product Type: Case (Library)
Product Description: This case is designed to familiarize students with the use of financial ratios. Two retailers, Sears, Roebuck and Co. and Wal-Mart Stores, Inc., have a very similar value for return on equity (ROE) in the 1997 fiscal year. Students use the information in the case and the accompanying exhibits, which include financial statements as well as disclosures regarding corporate strategies and accounting policies for each company, to analyze the value creation process for each firm. This case provides a good introduction regarding the combination of such information to create a powerful tool for financial statement analysis. A rewritten version of an earlier case.
HBS Number: 9-101-011
Geographic Setting: United States Industry Setting: retail
Company Size: large Number of Employees: 200,000 Gross Revenues: $150 billion revenues
Event Year Start: 1997 Event Year End: 1997
Subjects: Discount department stores; Financial analysis; Financial ratios; Financial statements; Retail stores; Return on equity
Academic Discipline: Accounting & control
Supplementary Materials: Teaching Note, (5-102-052), 10p, by Gregory S. Miller
Source: Harvard Business School Cases – Accounting and Control
Publication Date: 08/04/1992 Revision Date: 09/13/2004
Product Type: Note
Product Description: Introduces and describes meaning and uses for financial ratios to assess profitability, activity, solvency and leverage, and returns to shareholders.
HBS Number: 9-193-029
Subjects: Financial analysis; Financial ratios; Financial reporting
Academic Discipline: Accounting & control
Source: Harvard Business School Cases – Accounting and Control
A summer intern is asked to perform a financial value analysis of a company’s financial report for the years 1987-94. Teaching Purpose: Illustrates the use of financial ratios to identify and understand a company’s changing financial condition and operations.
HBS Number: 9-197-010 Type: Case (Gen Exp)
Publication Date: 8/22/1996 Revision Date: 5/30/1997
Geographic Setting: United States Industry Setting: manufacturing Gross Revenues: $13 billion revenues
Event Year Start: 1994 Event Year End: 1994
Subjects: Accounting procedures; Financial ratios
Supplementary Materials: Teaching Note, (5-197-057), 12p, by David F. Hawkins
Source: Harvard Business School Cases – Accounting and Control
Publication Date: 02/13/1996 Revision Date: 02/24/1997
Product Type: Case (Library)
Product Description: America Online’s (AOL) price has soared nearly 2,000% since its IPO. However, there is considerable disagreement among analysts regarding the future prospects of AOL. Although many analysts are bullish on the stock, short sellers have sold around 7 million shares. Teaching Purpose: Provides an opportunity for students to discuss: 1) the sustainability of AOL’s business strategy, 2) AOL’s accounting decisions to capitalize software development costs and subscriber acquisition costs, and 3) the rationality of AOL’s current stock price given the rapidly changing online consumer service industry. Also provides an opportunity for students to conduct a complete financial statement analysis of AOL using the four steps: business strategy analysis, accounting analysis, financial analysis, and prospective analysis.
HBS Number: 9-196-130
Geographic Setting: Unspecified Industry Setting: on-line & internet services Gross Revenues: $394.3 million revenues
Event Year Start: 1995 Event Year End: 1995
Subjects: Accounting procedures; Financial analysis; Financial reporting; Information services; Online information services; Services
Academic Discipline: Accounting & control
Supplementary Materials: Teaching Note, (5-199-037), 7p, by Amy P. Hutton, Krishna G. Palepu
Source: Harvard Business School Cases – Accounting and Control
Echlin has received a hostile takeover offer from SPX. Both companies have been undertaking major restructurings, and Echlin’s shareholders face a difficult decision of whether to support current management or to sell out to SPX. Students are asked to analyze the two companies and to prepare a letter from the CEO of each to Echlin’s shareholders explaining their positions. Teaching Purpose: Financial statement analysis introduction.
HBS Number: 9-199-010 Type: Case (Library)
Publication Date: 10/1/1998 Revision Date: 1/25/1999
Geographic Setting: Connecticut Industry Setting: auto parts Gross Revenues: $3.6 billion revenues
Event Year Start: 1998 Event Year End: 1998
Subjects: Acquisitions; Automotive supplies; Financial analysis; Financial statements; Mergers
Source: Harvard Business School Cases – Accounting and Control