This case is a supplement to Maxim Off Highway Axle Business: An Acquisition Opportunity (A).

The president of Zeus Strategic Investments Inc. was reviewing an acquisition opportunity related to a spin-off of a division of Maxim Automotive. This opportunity was exactly the type of thing that excited the president — a non-strategic business unit within a large industrial organization that faced significant challenges in forming into a standalone business. The president felt that it provided an excellent opportunity to create significant value .....more

This note explains the mechanics and financial accounting theory involved in preparing the statement of changes in financial position on a cash basis. A comprehensive example is included in this note, along with discussion on how to interpret the statement once it is produced.

Storm Technologies Ltd. has a significant net U.S. cashflow position which exposes the company to foreign exchange risk. As vice-president of finance, Todd Harrison is interested in determining the impact on cashflow and reported net income of a strengthening Canadian dollar. Several alternative hedging strategies are suggested including: 1) forward contracts, 2) call options, 3) put options, and 4) a combination of put and call options. Because the .....more

The mechanics of preparing projected financial statements are described to provide an understanding of the methods used in preparation, and to outline how these projections can be modified and used in financial planning and management decision making.