The call has gone out for the U.S. Securities and Exchange Commission to investigate possible insider trading of shares of student loan company Navient Corporation. Questions: 1. Who has asked the SEC to do this? 2. Why do the Senators suspect this? 3. What are the implications of the details surrounding the trades? Source: Nasiripour,… Read more »
Posts Categorized: Financial Statement Analysis
What would you do?
According to the Washington Post, the residents of Presidio Terrace, which is an oval-shaped privately owned street commonly known as one of the most exclusive communities in San Francisco, learned the that someone could buy their entire street. Questions: 1. Why was it possible to own Presidio Terrace? 2. How many bidders did Ms. Lam… Read more »
Morphing or not?
The world of retail is changing, with growth in online shopping dominated by Amazon. But does it signal a death spiral to our traditional way of life? Questions: After reading the article, please answer: 1. What is the inventory problem? 2. What is the supplier problem? 3. What is the supply chain problem? Source: Hoium,… Read more »
China Crash?
In China, outstanding loans have risen sharply to 40% of GDP but analysts fear the end of the credit binge could trigger a crisis for the wider world. Questions: 1. How fast has the debt per household risen over the last 5 years? 2. What is the Chinese household debt ratio compared to other countries?… Read more »
Prepaid Card Scrutiny – No more “under the radar”?
When prepaid cards started out, they were basically simple gift cards from retail stores. Since that time they have become popular financial-management tools, rivaling bank checking accounts. Because of this, regulators have plans this fall to bring the sector under greater scrutiny. Questions: 1. How much is expected to be loaded on prepaid cards this… Read more »
You Got Caught! Unauthorized!
According to The Guardian, Wells Fargo will pay $185m in a settlement over illegal sales practices that included the opening of unauthorized duplicate accounts and credit cards by employees in order to meet sales quotas. Questions: 1. What does the settlement include? 2. Over what period did this take place? 3. Which agency took action… Read more »
Amazon and the 30 hour work week
According to the Washington Post, the U.S. online retailer, Amazon, will try out teams that log 30-hour work weeks. But here is the catch: employees will receive the same benefits as those putting in 40-hour weeks, but get three-quarters of the pay. Questions: 1. Will this change be company-wide? 2. Last year the New York… Read more »
The Infamous Appalachian Trail
James T. Hammes, controller for a family-owned bottling company in Cincinnati, disappeared from his home in Lexington, Kentucky, in February 2009, after he was questioned about accounting irregularities that indicated an $8.7 million embezzlement had taken place. Questions: 1. Over what period had the embezzlement taken place? 2. Although Hammes denied involvement, what was the… Read more »
Free Ink! Benefit, advertising, or what?
According to chief executive of “& pizza,” Michael Lastoria, he now foots the bill for any worker — and the occasional customer — who wants to get inked with the company’s logo. Mr. Lastoria says that paying for tattoos is just another way of showing employees that he welcomes their ideas. Questions: 1. What does… Read more »
Fantasy Accounting?
According to the New York Times, a recent study shows that 90 percent of companies in the Standard & Poor’s 500-stock index reported non-GAAP results last year, which is up from 72 percent in 2009. Questions: 1. Do you think investors truly understand the consequences of this? 2. Which one of the tactics used do… Read more »