Tempest in a K-Cup: Red Flags on Green Mountain

2015 ◽  
Vol 32 (1) ◽  
pp. 79-94 ◽  
Author(s):  
Dennis H. Caplan ◽  
Saurav K. Dutta ◽  
David J. Marcinko
Keyword(s):  
Financial Reporting ◽  
Stock Price ◽  
Hedge Fund ◽  
Price Volatility ◽  
Securities And Exchange Commission ◽  
Financial Statement ◽  
Green Mountain ◽  
Financial Statement Analysis ◽  
Capstone Courses ◽  
Financial Disclosures

ABSTRACT “Tempest in a K-Cup” chronicles financial reporting challenges faced by Green Mountain Coffee Roasters, Inc. during a period of rapid growth following its acquisition of Keurig. The case focuses on events during 2011–2012, a period in which Green Mountain experienced significant stock price volatility, was challenged by the Securities and Exchange Commission (SEC) about its business relationships and financial disclosures, and was subject to highly publicized scrutiny by a well-known hedge-fund manager, David Einhorn, of Greenlight Capital. Students completing the case will apply accounting guidance and perform financial statement analysis to gain an appreciation for the scrutiny that companies receive from regulators, investors, and journalists. The case and its requirements are designed to be used in intermediate accounting, financial statement analysis, forensic accounting, and accounting capstone courses.

Baywatch International: A Case Linking Financial-Reporting, Business, and User Decisions

2000 ◽  
Vol 15 (4) ◽  
pp. 605-633 ◽  
Author(s):  
Fred Phillips ◽  
Kevin Morris ◽  
Kristina Zvinakis
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Financial Accounting ◽  
Financial Statement ◽  
Technical Knowledge ◽  
Capital Asset ◽  
Financial Statement Analysis ◽  
Accounting Courses ◽  
Reporting Decisions ◽  
Asset Depreciation

Baywatch International is a hypothetical company that manufactures figure-enhancement products—a rapidly growing industry that is featured frequently in Fortune and on CNNfn. The executives at Baywatch are making financial-reporting decisions pertaining to the company's receivables, inventories, loss contingencies, and capital asset depreciation. These decisions require technical knowledge of fundamental topics covered in introductory financial accounting courses, as well as an appreciation for relationships among financial-reporting, business, and user decisions. Consideration of the implications for financial statement analysis, earnings management, and financial-reporting ethics also is encouraged.

Financial Statement Analysis Under IFRS

2018 ◽  
pp. 696-712
Author(s):  
Yasemin Zengin Karaibrahimoglu ◽  
Gökçe Tunç
Keyword(s):  
New York ◽  
Financial Reporting ◽  
Stock Exchange ◽  
Financial Statements ◽  
Financial Statement ◽  
Financial Statement Analysis ◽  
Financial Reports ◽  
York Stock Exchange ◽  
Key Points ◽  
Recent Developments

This chapter provides a clear conceptual discussion on the recent developments in the Financial Statement Analysis (FSA). It presents how IFRSs changed the outlook of the financial reporting and the analysis and explains the key points that should be considered in FSA. Using a case study on the financial reports of Turkcell, a communication and technology company listed both on the New York Stock Exchange (NYSE) and the Borsa Istanbul (BIST), the differences between IFRSs and U.S. GAAP accounting standards in the measurement of overall financial performance and position are documented. Overall findings show that IFRSs change the appearance of financial statements significantly. While IFRS reporting extenuates “the bottom line” it accentuates total assets with higher shareholder equity compared to U.S. GAAP. This chapter might be a practical guide for users, preparers, and regulators to understand the cosmetic impact of IFRSs on financial statements.

scholarly journals PENERAPAN SISTEM INFORMASI DALAM PRAKTEK LAPORAN KEUANGAN SEDERHANA

Teknologi ◽  
2012 ◽  
Vol 1 (1) ◽  
Author(s):  
Sugiantina Sugiantina
Keyword(s):  
Information Technology ◽  
Financial Reporting ◽  
Financial Statement ◽  
Software System ◽  
Financial Statement Analysis ◽  
Financial Reports

ABSTRAK Tolak ukur bagi kemajuan pelaporan keuangan adalah metode analisis laporan keuangan dan penerapan teknologi informasi dalam berbagai analisis keuangan. Setiap institusi bisnis berupaya untuk menyeimbangkan perkembangan teknologi Informasi dengan perkembangan analisis pelaporan keuangan. Adanya perkembangan tersebut, institusi bisnis dituntut untuk bisa lebih cepat dan kreatif dalam bekerja khususnya dalam pelaporan keuangan. Hal ini dikarenakan adanya software system informasi yang sudah menjadi trend, dalam dunia bisnis dapat membuat laporan keuangan berbasis webyang  memberikan kemudahan dalam hal financial controlling bagi semua lapisan level manajemen intitusi bisnis Kata Kunci: sistem informasi, laporan keuangan, institusi bisnis   ABSTRACT Benchmarks for the progress of financial reporting is a method of financial statement analysis and application of information technology in a variety of financial analysis. Every business institution seeks to balance the development of information technology with the development of financial reporting analysis. The existence of these developments, business institutions are required to be more quickly and creatively in the work, especially in financial reporting. This is because the software information system that has become a trend, in the business world to create financial reports based web that  provide convenience in terms of financial controlling for all levels of management level business institution Keywords: information systems, financial reporting, business institutions

scholarly journals Financial Statement Complexity and Bank Lending

2021 ◽  
Author(s):  
Indraneel Chakraborty ◽  
Andrew J. Leone ◽  
Miguel Minutti-Meza ◽  
Matthew A Phillips
Keyword(s):  
Information Processing ◽  
Financial Reporting ◽  
Public Debt ◽  
Bank Lending ◽  
Bank Loans ◽  
Financial Statement ◽  
Information Frictions ◽  
Financial Reports ◽  
Bank Financing ◽  
Financial Disclosures

Recent evidence suggests that investors struggle to process complex financial disclosures. Relative to equity and public debt investors, banks have unique advantages in acquiring information and can impose contractual terms to mitigate information frictions. We investigate whether financial statement complexity is associated with firms' reliance on bank financing and the terms of bank loans. We focus on two aspects of complexity, the length of financial reports and the complexity of financial reporting rules. We document that both aspects of complexity are positively associated with firms' reliance on bank financing (i.e., level of debt and new financing). This result is consistent with banks' superior information processing capabilities. Next, we document that banks ameliorate information frictions using loan contractual terms that depend on the source of complexity. Overall, banks are an attractive source of financing for firms with complex disclosures, but banks also increase screening and monitoring for relatively complex borrowers.

SEC amends rules on financial reporting of business acquisitions and dispositions

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Richard J. Parrino
Keyword(s):  
Financial Reporting ◽  
Securities And Exchange Commission ◽  
Financial Statement ◽  
Content Type ◽  
Reporting Framework ◽  
Depth Analysis ◽  
The Us ◽  
Rule Changes ◽  
The Right ◽  
The Impact

Purpose This article examines the comprehensive amendments recently adopted by the US Securities and Exchange Commission (SEC) to its accounting and other rules that govern financial statement filing requirements for significant business acquisitions and dispositions. Design/methodology/approach The article provides an in-depth analysis of the rule changes in the context of the SEC’s attempt to balance the right of investors to obtain adequate information about the impact of an acquired or disposed business on an SEC registrant against the filing burdens that can result from over-identification of acquisitions or dispositions as material to the registrant based on the SEC’s “significance” tests. Findings The rule amendments bring enhanced coherence to a reporting framework that has been characterized in part by inconsistencies, gaps, unreliable valuation principles, and ambiguities. The amendments contribute to the SEC’s ongoing disclosure effectiveness initiative by updating, clarifying, and codifying many requirements that had developed piecemeal in market practice or through guidance issued by the SEC’s staff. Originality/value This article provides expert guidance on a major SEC disclosure requirement from an experienced securities lawyer.

The saga of a Chinese company being listed on a US stock exchange – a global financial reporting case study

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jayanti Bandyopadhyay ◽  
Hongtao Guo ◽  
Miranda Lam ◽  
Jinying Liu
Keyword(s):  
Financial Reporting ◽  
Value Chain ◽  
Stock Exchange ◽  
Financial Statement ◽  
Annual Reports ◽  
Financial Statement Analysis ◽  
Content Type ◽  
Metal Fabrication ◽  
Academic Level ◽  
Chinese Company

Research methodology We obtained information on China Gerui from secondary published sources, including annual reports downloaded from the Securities and Exchange Commission’s (SEC) EDGAR database, news sites and newspapers, the company’s website and journal articles. One of the authors visited the China Gerui plant in Henan, China. Case overview/synopsis China Gerui, a Chinese metal fabrication company, enjoyed exponential growth because of its location, product innovation and ability to move up the value chain. At the height of its success, the company listed on the Nasdaq and had plans to raise capital to fund ambitious expansion plans. Unfortunately, four years after listing on Nasdaq, the company received a letter from the listing qualifications department notifying China Gerui that they were not in compliance with Nasdaq’s filing requirements because it had not filed its Form 20-F. Now, the company had only five days to decide whether to request an appeal of the letter. Complexity academic level This case is best suited for higher-level undergraduate accounting and finance courses such as intermediate accounting, auditing, international accounting, financial statement analysis, corporate finance and investments analysis. It is especially appropriate for graduate-level global accounting and advanced financial statement analysis courses. In these courses, the best placement is after coverage of SEC regulations and requirements for financial statement reporting and disclosure. Moreover, the case may be used as a tool to demonstrate the step-by-step process for searching and retrieving information from a public company’s filings through the SEC’s EDGAR database. Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or email [email protected] to request teaching notes.

Assessing the Financial Reporting Consequences of Conversion to IFRS: The Case of Equity-Based Compensation

2010 ◽  
Vol 24 (4) ◽  
pp. 589-621 ◽  
Author(s):  
Mary Lea McAnally ◽  
Sean T. McGuire ◽  
Connie D. Weaver
Keyword(s):  
Financial Reporting ◽  
Stock Price ◽  
Intrinsic Value ◽  
Price Volatility ◽  
Fair Value ◽  
Cash Flows ◽  
Tax Benefits ◽  
The Difference ◽  
Accounting Reports

SYNOPSIS: The potential conversion of accounting standards from U.S. GAAP to International Financial Reporting Standards (IFRS) raises the issue of unknown financial reporting consequences. We consider one important accounting issue, namely equity-based compensation, and study how IFRS conversion will affect financial statements and the quality of reported numbers. The difference between the two standards is that IFRS reports tax benefits from equity-based compensation at their intrinsic value each period. This amounts to quasi fair-value accounting under IFRS compared to historic-cost accounting under GAAP. We develop and compare pro forma GAAP and IFRS accounting reports for a broad cross section of U.S. firms. We find that IFRS yields lower deferred tax assets and recognized tax benefits for approximately two-thirds of the option grants in our sample. Moreover, reported tax items will be more volatile under IFRS and these effects will be more pronounced for firms with greater option use and stock price volatility. Importantly, we find that IFRS tax items are better able to predict future cash flows. One conclusion is that IFRS improves the relevance, and thereby, the quality, of at least some reported numbers.

The Potential Impact of More Frequent Financial Reporting and Assurance: User, Preparer, and Auditor Assessments (Retracted)

2007 ◽  
Vol 4 (1) ◽  
pp. 47-67 ◽  
Author(s):  
James E. Hunton ◽  
Arnold M. Wright ◽  
Sally Wright
Keyword(s):  
Financial Reporting ◽  
Stock Price ◽  
Cost Of Capital ◽  
Market Price ◽  
Price Volatility ◽  
Financial Statements ◽  
Future Earnings ◽  
Decision Usefulness ◽  
Consensus Forecasts

The purpose of this study is to examine some of the potential impacts of more frequent financial reporting and concurrent assurance, as assessed by members of the assurer, preparer, and investor communities. Two hundred and fifteen participants (84 auditors, 30 controllers, 80 investors, as surrogated by MBA students, and 21 sell-side analysts) took part in an experiment where they received a case situation involving a company that was planning to voluntarily change from quarterly to monthly (daily) external financial statement reporting, without (with) assurance. After reading the case materials, the participants assessed the likely effects of such changes on the decision usefulness of financial statements, quality of earnings, financial reporting behavior, stock market price volatility, analysts' consensus forecasts, and cost of capital. The results indicate that monthly reporting without assurance would significantly enhance the decision usefulness of financial statements, improve the quality of earnings, and reduce managements' aggressiveness with respect to discretionary accounting accruals, estimates, and principles; further, the findings suggest stock price volatility would be lower, analyst consensus of future earnings estimates would increase, and cost of capital would decrease. Assessments of daily reporting were consistent with monthly reporting, yet significantly stronger. The inclusion of concurrent auditor assurance resulted in directionally consistent yet significantly pronounced results in both monthly and daily reporting conditions on all measures. Additionally, participants agreed that providing monthly reports would be technically and economically feasible at this time, while daily reporting would not be feasible.

Sachiko Corporation: A Case in International Financial Statement Analysis

2008 ◽  
Vol 23 (1) ◽  
pp. 77-101 ◽  
Author(s):  
Mahendra R. Gujarathi
Keyword(s):  
Financial Reporting ◽  
Financial Statements ◽  
Business Environment ◽  
Financial Statement ◽  
Japanese Company ◽  
Financial Statement Analysis ◽  
International Context ◽  
Profitability Ratios

Sachiko is a comprehensive case on financial statement analysis within an international context. Upon reviewing the financial statements and relevant footnotes of Sachiko Corporation, a Japanese company, and U.S.-based Radiance Inc., you are required to restate the two companies' financials to evaluate whether the revised ratios are consistent with each company's strategy and business environment and, subsequently, to recommend the better investment prospect. The case provides a forum for you to examine the role of environmental differences (cultural, institutional, business, and financial reporting) in interpreting the risk and profitability ratios in an international context.

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