...CASES IN FINANCIAL MANAGEMENT SYLLABUS FIN 522 Professor James A. Gentry Cases In Financial Management 343M Wohlers Hall Spring Semester 2009 333-7995 2043 BIF j-gentry@uiuc.edu Office Hours: 10:30 a.m. to 11:45 a.m. on Mon. and Wed/. or by Appointment I. Teaching Objectives Financial decision making cases are used to… • Create a highly interactive learning environment; • Learn about the application of financial management and credit analysis concepts; • Discover what you do not know about the practice of financial management; • Show what you have learned; • Highlight the relationships between strategic goals and the creation of firm value; • Develop techniques for interpreting a firm’s financial data and strategic plans; • Enhance your critical thinking and problem solving skills; • Expand your understanding of financial theory and its application; • Improve your listening and cooperative learning skills. II. Learning Promises At the end of this course your will be able to… • Think like a financial manager; • Interpret a company’s financial health by evaluating the performance...
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...[FIN 482: CASE STUDIES IN FINANCIAL MANAGEMENT: CHITRANGNA CHAUDHARY ROOSEVELT ID 900336721] November 06, 2015 Krispy Kreme Doughnuts, INC. 1. What can the historical income statements (case Exhibit 1) and balance sheets (case Exhibit 2) tell you about the financial health and current condition of Krispy Kreme Doughnuts, Inc.? The annual growth of Krispy Kreme donuts from Jan 2000 through Feb 2004 have been quite consistent. The income growth from 1999 2003 has more than 10 folds. However the equity has been increasing in negative numbers from 2001 continuously form the last four years. The reason for this might be the development of business in other aspects is not developing and growing as much as otherwise which of course has impacted the company's income. In the balance sheets of Krispy Kreme donuts of the assets look really good from Jan 2000 to 2004 however there are a few facts that were noted which are as follow: 1. Cash and cash equivalents between defeated off between 2003 and 2004 had dropped considerably; 2. Assets held for sale in February 2004 were almost 37 million and change the company did not amortize their re-acquired franchise rights, goodwill and other intangible assets it was overstated asset in 2000 to 2003 and therefore there was a dramatic increase from 49 to 175 million respectively; 3. Total assets and shareholders were impressive but if you really break down the components they were not so good. In 2004 short-term debt and the...
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...1st Scenario MINI-CASE ABC CORPORATION The initial cash outlay at Time 0 is simply the cost of the new equipment, $15,000,000 and the ABC’s required return of 12 percent. The marketing study and the research and Development is both sunk costs and should be ignored. (Assuming CCA class is 43, the CCA rate of 30 percent and corporate tax is 35 percent). Sales Sales VC Fixed costs Year 1 $17,500,000 6,020,000 3,000,000 Year 2 $20,000,000 6,880,000 3,000,000 Year 3 $25,000,000 8,600,000 3,000,000 Year 4 $21,250,000 7,310,000 3,000,000 Year 5 $18,750,000 6,450,000 3,000,000 Required: Calculate OCF from the above information. C d Tc S k n $15.000.000,00 .30 .35 -‐ .12 5 Years CCA table Beggining UCC CCA (30%) End UCC Sales VC FC EBIT Year 1 $2.250.000,00 $12.750.000,00 $6.020.000,00 $3.000.000,00 Year 2 $3.825.000,00 $8.925.000,00 $6.880.000,00 $3.000.000,00 Year 3 $8.925.000,00 $2.677.500,00 $6.247.500,00 $8.600.000,00 $3.000.000,00 Year 4 $6.247.500,00 $1.874.250,00 $4.373.250,00 ...
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...holders, compared to the stockholders, have prior claim on cash flow. The residual claim of stockholders increases the risk when the debt holders fixed claim increases, which in turn causes the stock to go up. Debt also increases the risk of bankruptcy to the company. This causes pre-taxed cost of debt to go up as well. Free Cash flow is also affected by additional debt. This can cause increase in the possibility of bankruptcy as well. An indirect cost would be a loss of customer, as a direct cost of distress would be legal fees. The indirect costs cause NOPAT to decrease. This is caused by the loss of customers, in turn causing the net operating working capital to increase. The effect that the managers have (or their behavior in most cases) is also effected by additional debt to the company. Managers will be come less likely to spend or waste their Free Cash Flow on opportunities that might in fact add value, or not add value and even the lack of risk in involving the company in any NPV projects that could indeed become prosperous for the company. B.1. The uncertainty about EBIT is considered to be the business risk. There are many factors that are influential to business risk. Some include: Uncertainty in input costs, and product and other liability types. B.2. The change in EBIT is known as the Operating Leverage which is caused by the change in the quantity that is sold. With the higher proportion of fixed costs that is inside...
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...requirement. Even within the Civil Society Organization (CSO) itself, the different departments compete for resources with maximum approved ceilings and having in place a good financial management system is expected to provide needed tools in order to make timely decisions on fund allocation as well as monitoring performance that adhere to the reporting requirements set by Donors and Government. The financial processes of recording, planning, monitoring and controlling have to be done on an ongoing basis in conjunction with other functions of the organization for maximum impact to achieve the objectives of the organization. With the increase in the number of CSO’s operating in Ethiopia and to address the need for a regulatory body, in 2009 the Ethiopia Government issued Proclamation No. 621/2009. This proclamation provides procedures for the Registration and Regulation of Charities and Societies there by establishing Charities and Societies Agency (ChSA) under the Ministry of Justice. Then Regulation No.168/2009 was issued by the...
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...Moms In Motion, LLC (Moms) is a Service Facilitation provider for Medicaid CD-PAS (EDCD, ID & DD Waivers) enrollees and a Case Management provider for DD Waiver enrollees. Our mission is to enhance the outcome for all of our clients and their families, by using person-centered practices while providing superior service, sharing resources, continually expanding our knowledge, and networking. Our primary areas of growth will be advocating in the school systems for our younger clients, assisting young adults with transitioning to independence, and helping our aging clients to be cared for by the people who love them. We serve clients of all ages: children, young adults and aging. Mission Statement Learn more Advocacy We believe that every person, whether young or elderly, regardless of disability, has the right to nurturing, personalized care supported by those who love them. If you are facing the challenges of finding high-quality care for your loved one, and need the support of a Waiver or other program, there are resources available for you. Get in touch with us to find out about the Medicaid Waiver programs that may be available to help you provide for the care of your loved one. There are also community-driven programs that can help you to find the resources and assistance to encourage a high quality of life for your child, elderly parent, or other loved one. More info about DMAS’s Letter on Managed Care Organization (MCO) Moms in Motion is a...
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...Class of: 2013 Course Title: Financial Risk Management (FRM) Semester: III Credits: 3 Course Objective & Learning Outcome: This course gives students a working knowledge of derivative instruments and their applications in managing various types of financial risks. While doing so, students would understand the organizational aspects of those risk functions and their roles & responsibilities. The emphasis is on mechanics, properties and valuation of forwards, futures, options and swap instruments. In covering these instruments, cases, examples and notes would be sought from markets so as to provide a holistic view of the financial market structure i.e., currency, fixed income, equity and money markets. Cases discussed in the class would be contemporary in nature drawn from international experience. Pre-requisites: Students are advised to be through with Financial Management I, Financial Management II and Quantitative Methods. Students are expected to go through all the reading prescribed before every class and make a meaningful contribution through active class participation. The course is delivered through a combination of case discussions, problem solving, real life risk reports and simulation. The course would have an analytical and numerical flavor and hence students are required to bring their calculators/laptops to every class. Text Book: 1. Hull, John C. & Basu, S., Options, Futures, and Other Derivatives, 7th Edison, Prentice-Hall...
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...The role of writing in financial field Abstract As far as we are known, writing plays an important role in our daily life and is essential to all people from all walks of lives. Writing can prompt the fast development of the individual progress as well as their professional capacity as well. I am willing to come true this aim in the way of writing, so I do my best to interview a person, her name is Doris. We have the opportunity to pick up some techniques and significant skills in the way of giving question-- how to write in an appropriate way in some degree. Now, Doris is working in financial field. There is no doubt that we can learn some key points of how to write something in this field from her useful and important experiences. This assignment which is an informational report aims to give a brief introduction about the different genres of writings, then provide some useful instructions to her expected audience, what’s more, making those audience known that writing can convey unexpected reflection of our daily life in reality. The importance of writing in financial I have acquire that writing could promote her to achieve a lot of things during the process of her career such as data analysis, strategy decision making, and more about the international business. Moreover, Doris has spent 3 more years working in this field. And everyday, she takes one and a half to write. Meanwhile, she will try her best to finish her tasks, no matter how difficult the tasks are, she...
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...Case Study: Coca-Cola HBC Treasury Takes Control of Commodity Risk Management Dimitris Papathanasiou, Coca-Cola HBC - 11 Sep 2013 Coca-ColaHellenic Bottling Company standardised its approach to risk management by transferring commodity risk management into treasury, so this central and vital business process could be managed by experts on an integrated basis with other financial risks and overseen by the financial risk management committee. This case study explains how organisational changes, combined with the introduction of risk management technology, enabled the organisation to plan and execute a consistent, cost-effective hedging strategy, with reduced counterparty risk exposure levels, improved transparency and stronger levels of control. Coca-Cola Hellenic Bottling Company (Coca-Cola HBC) is the world’s second largest bottler of the Coca-Cola Company’s products and the largest in Europe. Net sales revenue for fiscal 2012 was €6.8bn. Coca-Cola HBC is headquartered in Zug, Switzerland, and has a premium listing on the London Stock Exchange and a secondary listing on the Athens Exchange. It serves approximately 581m people in 28 countries. The company decided to concentrate its commodity market risk management within the treasury department, in response to high levels of profit and loss (P/L) volatility and the relatively high credit risk with its suppliers. The ensuing project involved change management for transfer of the company’s commodity risk hedging...
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...CPA Program The Practical Experience Guide EVE CHENG CPA SENIOR ANALYST BHP BILLITON Contents Practical experience requirement How to identify if your role is relevant Where do you fit? What skills areas do you need to demonstrate? Your mentoring relationship How to record your experience in the logbook The skills guide Personal effectiveness skills Leadership skills Business skills Technical skills 3 4 6 7 8 10 11 12 13 14 15 MICHELLE ROACH CPA 2 Practical experience requirement Did you know? Our studies show that members consistently perform better in their segments when they are enrolled in the practical experience requirement The practical experience requirement of the CPA Program gives you the opportunity to use the knowledge and skills gained in your education and apply them in your workplace. Combining your education with mentored practical experience will give you the opportunity to develop and demonstrate highly sought after technical and soft-skills that will benefit your entire career. Starting your practical experience requirement means that you are one step closer to your goal of becoming a CPA. CPA Australia recommends that you start the practical experience requirement and the professional level segments at the same time, if you are employed in a relevant role. What are the requirements? • complete a minimum of three years of relevant full-time or equivalent part-time work experience • demonstrate competence in 16 personal effectiveness...
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...CPA Program The practical experience guide and logbook If you require further information about the practical experience requirement, or would like to notify us of a change, please contact CPA Australia: practicalexperience@cpaaustralia.com.au or contact your local office – details can be found on the inside back page of this guide. Disclaimer The material used in this booklet has been designed and prepared for CPA Australia’s practical experience requirement. It provides tailored guidance for mentors who are registered in CPA Australia’s practical experience requirement. The booklet and contents should not be used for any other purpose. CPA Australia, the publisher and the author of this booklet take no responsibility for any loss incurred by any person who relies on guidance offered in this booklet. Legal notice Copyright CPA Australia Ltd (ABN 64 008 392 452) (“CPA Australia”), 2010. All rights reserved. Save and except for third party content, all content in these materials is owned by or licensed to CPA Australia. All trade marks, service marks and trade names are proprietory to CPA Australia. For permission to reproduce any material, a request in writing is to be made to the Legal Business Unit, CPA Australia Ltd, 385 Bourke Street, Melbourne, Victoria 3000. CPA Australia has used reasonable care and skill in compiling the content of this material. However, CPA Australia and the editors make no warranty as to the accuracy or completeness of any information in these...
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...Zeus Asset Management Inc Executive Summary Zeus Asset Management Inc is an asset management firm with more than $1.7 billion in asset under management. Zeus is well known for relationship-oriented that served both individual and institutional investors with the investment philosophy of believing that they could get a superior return over the long run using a conservative, risk-averse and quality-oriented approach. Zeus have been measuring it’s return in an absolute basis however Abbott demanded for it to be in risk adjusted basis to be better determine if Zeus outperform the relevant indices. The main problem with the current measure is that it did not take risk into consideration. The main aim in this case study is to determine if the current performance evaluation is sufficient or a better risk adjusted measure could be form. Other than that, we would also take into consideration of the difference between Zeus with its main competitors and how different type of investors would have different investment strategy due to their different risk preference. Problem with current measure As the current fund performance measurement consist mainly of holding period and benchmark return, these return have weaknesses that does not allow it to be a sufficient measurement. As a HPR generally calculated based on determining what the total return is earned from holding the investment for a specific period of time. The advantage of it is that it is easy to calculate and understand by...
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...analytical and educational background Management experience Diverse work and life experience Experience 02/2010 – present Raiffeisen Bank International AG, Austria Credit management corporate, Director Counterparty credit risk and underwriting management in European emerging markets with special focus on Russia and Ukraine. 12/2008 – 01/2010 Structuring complex corporate credit transactions such as LBOs and investment loans. Developing an advanced internal tool for calculating Risk weighted assets under both standardised and IRB approaches. Developing and implementing industry concept in credit risk management. Reporting large and complex transactions to the bank’s Credit committee and Management board. Exercising my own approval competences for approval of credit transactions. Mentoring junior professionals and trainees in the department. Raiffeisenbank AD, Bulgaria Corporate credit risk, Head of department Managed a credit risk department of 10 risk professionals responsible for the largest corporate credit risk exposures. Was a voting member of the bank’s credit committee with own approval authorities. Steering the credit committee meetings. Participated in risk related projects originated in head office improvement, Data Quality management, Regular risk reporting). Met National Supervisory in terms of IRB application status of the bank. (Rating model 06/2008 – 11/2008 EFG Eurobank AD, Bulgaria Credit risk management, Head of department Managed...
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...Behavioural Finance Financial Risk Management Table of Contents Table of Contents 1 Risk Management Paper ........................................................................................................ 2 1.1 Introduction and interpretation .................................................................................................... 2 1.2 Implementation ............................................................................................................................ 4 1.2.1 Aspects to consider ....................................................................................................................... 4 1.2.2 Implementation Process ............................................................................................................... 8 2 Appendix I – References ....................................................................................................... 10 Date: 24 of May 2012 th i Risk Management Paper 1 1.1 Risk Management Paper Introduction and interpretation If at the beginning of 2011, a highly respected person advised me that I was going to live through three major earthquakes within a year I would have struggled to believe them and justify arguing with the historical and scientific data, which clearly states the converse...
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...A risky business Dodie: We are all here now. As you know that Zelal Sulen is our new boss now. After she took up the official post, she found that Hi-Style is out of touch with its target consumers and is losing direction. As the member of manager consultants, for this point, today we need to think out at least two options to advise her to improve the situation. Am I understood? And think a while... Okay, let's make a start. Who want to speak first? Lily: Well, in my opinion, Hi-Style could allocate £10m to new investment in the business. For example, it could improve distribution and sales through an exclusive agreement with a major retailer, which could provide a steady marketing channel. Second, to launch new product ranges with major advertising campaigns. Thus, new products will be known to customers. Hi-Style could definitely reach wide publicity. Thirdly, to employ brand development consultants so as to improve its image. Brand development consultants are more professional so that better brand image will be built, leading to its properous future. Fourthly, to hire a top retailing executive to run the business. Therefore, the business will be more smooth and sales will be increased. The last one is to commission City Associates to do a thorough review of all Hi-Style's activities, from which Hi-Style could catch a better understanding of the whole business to control its operation. Dodie: Good.Thanks. Lily. And what's your opinion, Serena? Serena: Well, I prefer the...
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