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.

Teaching note for product 9A89D003.

Teaching note for product 9A90B002.

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

Minnova Lac Shortt mine faces an important capital budgeting decision. A discounted cashflow analysis of a $19 million investment to deepen the existing mine by 300 metres is required. Given the high levels of uncertainty and flux in the external environment (e.g., U.S. exchange rate, price of gold, head grade of ore, recovery percentage, etc), managers need to conduct a sensitivity analysis. Qualitatively, Minnova's mining strategy weighs heavily .....more

The marketing manager of Bedrock's Packaging Systems Division, is responsible for generating a plan to revitalize sales of Wrap 'N' Stick, a product introduced three years earlier. The alternatives for the product include an exclusivity deal, private branding, enhanced marketing, and the use of a fund raising wholesaler. A discounted cashflow is to be used to quantify the alternatives (which were not necessarily mutually exclusive). Numerous .....more

The owner and general manager of the Cedarbrae Volkswagen dealership is concerned about the Kundendienst Index (KI) used by Volkswagen Canada to measure customer satisfaction with new vehicles and service work. The case details Cedarbrae operations and the KI, and focuses on the issues of What is quality of service?, and How do you devise a management control system that reinforces and measures service? From a marketing research perspective, case .....more