The main objective of this case is to introduce students to the calculation and usage of ratios in a real world environment. Secondly, students will be required to access, read and use an actual annual report. Lastly, Dairy Farm International is an Asian-based multinational and, therefore, by using comparative data from a United Kingdom multinational, Tesco, and a local Canadian company, Sobeys, students will be introduced to issues related to international .....more

Sailing Voyages, Inc. is a tour boat company offering day cruises on a sailing schooner. In this exercise, the owner of the company needs to determine the amount and nature of costs and revenues with varying number of sailing voyages and a limited season of operation.

A 23-year-old sales executive for a multinational office furniture and supply company was thinking of leaving the company over a dispute regarding her compensation. After doing some cost analysis on the feasibility of starting a recruiting agency, the young entrepreneur decided it was worth trying. One year later, the company had experienced a successful and profitable first year. This follow-up to the (A) case, 9A99B033, provides the opportunity .....more

An auditor is planning the audit of a new client, Acme Hardware. For preparing the audit plan, he becomes aware of the possibility that certain managers might be using accounting flexibility to aid them in qualifying for incentive bonuses based on profitability. The areas are inventory and advertising. The auditor must decide what action, if any, to take.

In late 2001 and in 2002, investors, securities regulators, the energy industry and the capital markets watched as the details of behind the collapse of Enron Corporation unfolded. Enron was the largest corporation to collapse in U.S. history, with the company's share price losing most of its value in the 10 months preceding its bankruptcy petition. A large shareholder, like virtually all of Enron's shareholders, was unhappy with his losses .....more

The use of stock-based compensation (or stock options) has increased significantly since the late 1980s. Previously limited to senior executives in many companies, stock-based compensation is starting to be offered to broader groups of key employees. Based on Canadian financial accounting standards, two methods are discussed in this note: fair value-based method and intrinsic value-based method.

A board of directors has a big role to play in financial reporting, but as these Ivey accounting professors wonder, can and should a board do more than it does.

A buy-and-hold investor has read a magazine article that suggests some companies use accounting tricks in reporting on their employee future benefits. As a result, it is difficult for investors to receive an accurate picture of a company's financial performance. One of the companies mentioned is Imperial Oil Limited, a company in which the investor holds shares. He decides to review the company's most recent annual report, analyzing how it .....more

A business school student, who was also a shareholder of Nortel Networks Corporation, sat down to examine Nortel's recently released 2000 annual report. The dramatic fluctuations in Nortel's share price over the past year had caused investors in Nortel's stock to both make and lose a lot of money. The young investor was trying to decide whether she, as a shareholder, felt misled about Nortel's company worth and valuation. She wanted .....more

While the performance of subsidiary companies is reported through separate accounting records, the combined operating results of the subsidiaries can provide additional insights into an individual company's financial position. The note examines two accounting approaches: the equity method (which measures income, but does not present a complete account of the parent-subsidiary relationship) and the consolidation method, which provides a more accurate .....more