Times are Tough for Everyone: Including the PCAOB!

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Just a week before the Supreme Court hears oral arguments about constitutionality of the Public Company Accounting Oversight Board (PCAOB) and why it should be dissolved, the members of the Board asked for a 16% in the overseer’s 2010 budget. This amounts to an additional $25.7 million to hire 60 more employees, for international inspections,… Read more »

What Will the Future Bring for Lease Accounting?

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CEOs and CFOs are cautiously eyeing the limitations that convergence of FASB and IFRS standards may bring to lease accounting. Predictions are that a new global lease standard, anticipated in 2011, will require many traditionally classified operating leases into the capital lease status. QUESTIONS: What are the current FASB criteria for classifying leases as either… Read more »

What are Non-GAAP Financial Measures?

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Amgen is a biotechnology firm that develops and manufactures human therapeutics that fight cancer, kidney disease, rheumatoid arthritis and other serious illnesses. As part of its 2008 financial report, the Company issued non-GAAP financial measures to facilitate additional analysis by investors. QUESTIONS: In one paragraph, briefly describe non-GAAP financial measures and how they differ from… Read more »

Boosting Liquidity

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On Tuesday, November 24, 2009, U.S. Airways announced several ways that it will boost its current and future liquidity. Since beginning its innovative slot transaction with Delta Air Lines, the company has been trying to realign a number of financial areas to focus on their most profitable flying operations. QUESTIONS: What is liquidity and explain… Read more »

Raising funds with Stock Warrants

Posted by & filed under All Articles, Financial Reporting and Analysis, Financial Statement Analysis, Intermediate Accounting.

The biotechnology firm, Dendreon Corporation, is a company which is developing the prostate cancer drug Provenge. On Friday, November 20, the U.S. Food and Drug Administration (FDA) accepted its application to market the vaccine to treat men with advanced prostrate cancer. If the FDA approves it, the drug would be the first in a new… Read more »

Instant-Coffee Wars

Posted by & filed under All Articles, Cost Accounting, Managerial Accounting.

Starbucks has been working on a closely guarded secret for 20 years – Via Ready Brew instant coffee. A month after its launch, Nestle, the maker of Taster’s Choice, has begun an aggressive campaign against the new interloper. This campaign includes free samples of Nescafe’s “sticks,” direct mailings, and Web commercials. QUESTIONS: How should Nestle… Read more »

Are Things Improving for Sears Holding Corporation?

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In the third quarter of 2009, Sears Holding Corporation narrowed its losses from $146 million in the previous quarter to $127 million. Despite this, shares of Sears’ stock have almost doubled during 2009. QUESTIONS: The article mentioned that because of inventory management, the company’s gross margin widened by 0.4 percentage points to 27.2%. What are… Read more »

New Rules for Gift Cards

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New rules were announced on November 16, 2009, regarding stricter rules to govern fees and expiration dates for gift cards, gift certificates, and general use pre-paid cards. While the rules have not be enacted and are open for comment for the next month, proposals include the prohibition of dormancy fees for a year and the… Read more »

Searching for Free Cash Flow

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The South Africa-based company, Harmony Gold, is having problems securing ongoing funding after using up more than $1 billion U.S. Its latest quarterly report shows that the company is grappling to produce free cash flow. QUESTIONS: What is free cash flow and why is this a worry for the company? With respect to free cash… Read more »