For intermediate and financial accounting courses at the MBA and undergraduate level, or a supplement to financial statement analysis texts. This collection of financial accounting cases is designed to help students become financial statement users. Each case utilizes financial statement information (balance sheet, income statement, statement of cash flow and/or footnotes) and a number of topical questions. Students use the financial statement information to infer and interpret the economic events underlying the numbers. Related articles taken from business publications accompany some cases, and information from the articles is incorporated into the case question material. Also available the Pearson Custom Case Program.



Table of Contents

I. BECOMING FAMILIAR WITH FINANCIAL REPORTING: BASICS, TOOLS, AND THE PERSISTENCE OF EARNINGS.

1. Basics Interpretation and Preparation of Financial Statements.

ASICS Corporation Understanding Financial Statements. Nike Basic Ratio Analysis. Yokohama Rubber and Goodyear Tire Comparing Ratios. Fuji Photo Film and Eastman Kodak Inferring Transactions. Club M?diterran?e S.A.International GAAP. Food Lion, Inc. Preparation of Financial Statements. Taiwan Semiconductor Manufacturing Company Transactions and Periodic Adjustments. Abercrombie and Fitch Transactions and Financial Statements.



2. Tools Discounted Cash Flow.

Maya Return on Investment. Hydron Technologies Corporation Lease or Buy.



3. Tools Basic Valuation and the Persistence of Earnings.

Maple Leaf Gardens Valuation. Pharmacia Corporation.Persistence of Earnings.



4. Tools Cash Basis versus Accrual Basis Reporting.

Frederick's of Hollywood. Statement of Cash Flows. Weis Markets, Inc. Statement of Cash Flows. Mayor's Jewelers Inc. Statement of Cash Flow.



II. EVALUATING FINANCIAL REPORTING DISCLOSURES: BALANCE SHEET COMPONENTS AND ISSUES IN THE QUALITY OF EARNINGS.



5. Assets.

Lucent Revenue Recognition. Alcatel Accounts Receivable. Whole Foods Market, Inc. Inventory. Frederick's of Hollywood Property and Equipment. WorldCom Inc. Capitalizing Costs. Merck & Co., Inc. Research and Development. eBay Acquired Intangible Assets. America Online, Inc. Deferred Costs.



6. Liabilities.

BASF Contingencies and Provisions. Maytag Corporation Warranties and Deferred Taxes. Bally Entertainment Corporation Long-Term Debt. The Home Depot Long-Term Debt. AMR Corporation Leases. The Robert Mondavi Corporation Deferred Taxes. Bethlehem Steel Post Retirement Obligations.



7. Owners' Equity.

The Dow Chemical Company Treasury Stock. Xilinx Employee Stock Options.



8. Intercorporate Investments.

Wachovia Marketable Securities. BCE Inc. Investments in Other Companies. The Seagram Company Investments in Common Stock.



9. Financial Statement Analysis.

Boston Beer & Lion Brewery Financial Statement Analysis.