EduRN: Financial Economics Education (FEN) (Topic)最新文献

{"title":"American International Group, Inc.—The Financial Crisis","authors":"Luann J. Lynch, J. Hawkins","doi":"10.2139/ssrn.2974031","DOIUrl":"https://doi.org/10.2139/ssrn.2974031","url":null,"abstract":"The case details the history of AIG, its organizational structure, and involvement in the market for credit default swaps and the financial crisis. Edward Liddy has been appointed by Treasury Secretary Henry Paulson as CEO and chairman of AIG during the government's bailout of the insurance giant. He is preparing to address the U.S. House of Representatives' Financial Services Subcommittee on Capital Markets, Insurance, and Government-Sponsored Enterprises to provide testimony related to AIG's payment of $165 million in bonuses to several of its managers at the same time the government had been injecting billions of dollars into the company to help keep it afloat. Students are asked to reflect on the bonus payments, what factors in the organization might have contributed to the issues AIG faced in the financial crisis, and how to ensure the company did not face similar issues again in the future. \u0000Excerpt \u0000UVA-C-2322 \u0000June 7, 2011 \u0000AMERICAN INTERNATIONAL GROUP, INC.—THE FINANCIAL CRISIS \u0000Edward Liddy was preparing to address the U.S. House of Representatives' Financial Services Subcommittee on Capital Markets, Insurance, and Government-Sponsored Enterprises. It was March 2009, just six months after Liddy was appointed by Treasury Secretary Henry Paulson as CEO and Chairman of American International Group, Inc. (AIG), during the government's bailout of the insurance giant. He was being asked to provide testimony related to AIG's payment of $ 165 million in bonuses to several of its managers at the same time the government had been injecting billions of dollars into the company to help keep it afloat. \u0000For an annual salary of $ 1 and no bonus, he had returned from retirement to lead the efforts in restructuring the company and paying back the government. Although he was receiving equity compensation, it remained to be seen if it would be worth anything by the time this was over. Regardless, Liddy was now in charge of the company and had to assume responsibility for the employee bonus payments. He was facing an emotional yet powerful committee and needed to be prepared. \u0000As he both reflected on what had happened and pondered his upcoming testimony, he undoubtedly considered several questions. How could a company such as AIG find itself in this position? It was unable to remain solvent on its own and had received billions of dollars in aid from the U.S. government as a result. The head of its Financial Products Group had been cited as one of the people most responsible for the recent financial crisis. And now, it was the subject of widespread publicity and heavy scrutiny related to the payment of millions of dollars in bonuses at the same time. How could this have been prevented? Where did things go wrong, and how could the company ensure it did not end up in a similar situation again in the future? \u0000. . .","PeriodicalId":373500,"journal":{"name":"EduRN: Financial Economics Education (FEN) (Topic)","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-05-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131027571","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Garden Spot: Year One","authors":"Luann J. Lynch","doi":"10.2139/ssrn.2974093","DOIUrl":"https://doi.org/10.2139/ssrn.2974093","url":null,"abstract":"The owner and manager of a small garden shop that opened on January 1 needs to analyze and record transactions, prepare financial statements, and assess the company's performance during its first year of operations. She also needs to provide a set of financial statements for her bank, as she is required to do annually based on her loan agreement. Students will prepare journal entries, post this information to T-accounts, record the necessary adjusting entries and post to T-accounts, prepare an income statement that summarizes results of operations for the year, and prepare a balance sheet as of December 31. \u0000Excerpt \u0000UVA-C-2378 \u0000Rev. Aug. 16, 2016 \u0000The Garden Spot: Year One \u0000It was almost midnight on December 31, and Mary Jo Barnes was reflecting on her first year as owner and manager of The Garden Spot, a small garden shop she had opened on January 1 in Charlottesville, Virginia. She and her husband, Josh, had both worked in a large city in the northeastern United States for the past 10years and had decided to relocate to Charlottesville to establish a different lifestyle. Barnes had a degree in horticulture and wanted to devote her working days to something she enjoyed and was passionate about. So she decided to start her own business and opened a small retail garden shop selling plants, trees, shrubs, and flowers. \u0000Barnes recalled what a busy day she had on that first day in January: \u00001. She had met with her lawyer to incorporate the business, and she and Josh invested $ 60,000 in the company in exchange for shares of common stock. They had contemplated borrowing the $ 60,000 from Barnes's parents but had decided instead to use some of the money they had saved over the past 10 years. \u0000. . .","PeriodicalId":373500,"journal":{"name":"EduRN: Financial Economics Education (FEN) (Topic)","volume":"40 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-05-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127314532","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Dominion Gas Holdings, LLC—Anticipatory Interest Rate Hedging","authors":"Pedro Matos, Stephen E. Maiden","doi":"10.2139/ssrn.2974584","DOIUrl":"https://doi.org/10.2139/ssrn.2974584","url":null,"abstract":"The case examines interest rate risk management at a U.S. utility company, Dominion Gas Holdings. In November 2012, as part of its new financing plan, it wanted to hedge the interest rate risk involved with the company's 2013 planned issuance of $1 billion in debt. While the coupon rates for the planned debt were unknown as of November 2012, the company wanted to lock in its financing costs one year ahead since interest rates were at historically low levels. The company was considering entering into a number of forward-starting interest rate swaps. The use of forward-starting interest rate swaps as a pre-issuance hedging tool could cause some accounting and regulatory risks, and some other utility companies chose not to hedge at all. A bank had approached Dominion Gas with an indicative quote for the forward-starting swap, and the Treasurer had to decide whether it was a fair rate. This case has been used in a first-year MBA class that focused on valuation of financial markets, and a more advanced second-year elective that focused on derivative securities. \u0000Excerpt \u0000UVA-F-1754 \u0000Rev. Nov. 3, 2017 \u0000Dominion Gas Holdings, LLC: Anticipatory Interest Rate Hedging \u0000In November 2012, Dominion Resources, Inc. (DRI), one of the largest producers and transporters of energy in the United States, was planning the creation of a subsidiary that would consolidate the major components of Dominion's regulated gas businesses under one intermediate holding company entity. The timeline called for the formation of a new legal entity, Dominion Gas Holdings, LLC (Dominion Gas), around September 2013 by transferring several regulated gas subsidiaries from DRI to Dominion Gas. As part of its new financing plan, Dominion Gas planned to issue at least $ 1 billion in debt in November 2013. The offering would consist of senior notes, and the maturities would be a combination of 3-year, 10-year, and 30-year notes. \u0000While the coupon rates for the planned debt were unknown as of November 2012, the company wanted to lock in its financing costs ahead of time. Interest rates were at historically low levels (see Exhibit 1), and market commentators were predicting rising interest rates with the end of the U.S. Federal Reserve's monetary quantitative easing looming. The company was considering entering into a number of interest rate swaps to mitigate the interest rate risk associated with the anticipated long-term debt issuance. One particular set of swaps the company was considering was designed as a pre-issuance hedge for the portion of the 3-year debt offering that assumed a $ 250 million principal amount of such notes would be issued in November 2013. \u0000Dominion Gas Holdings, LLC \u0000. . .","PeriodicalId":373500,"journal":{"name":"EduRN: Financial Economics Education (FEN) (Topic)","volume":"29 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-05-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126413725","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Pension Accounting at At&T","authors":"Justin J. Hopkins","doi":"10.2139/ssrn.2974104","DOIUrl":"https://doi.org/10.2139/ssrn.2974104","url":null,"abstract":"This case provides students with the opportunity to analyze the pension footnote disclosures for AT&T Inc. In particular, it focuses on the components of pension expense, the balance sheet accounts, and the various assumptions that drive these figures. What is most unique about the example is that the case is set in 2008, and in 2010, AT&T elected to immediately recognize actuarial gains and losses in net income. To provide comparable prior year financial statements, AT&T restated 2008 accounting for immediate recognition of actuarial gains and losses. Therefore, students can see the significant effect of this change in accounting policy by comparing the $12.8 billion in net income originally reported in 2008 with the $2.3 billion loss AT&T reported for the restated 2008. \u0000Excerpt \u0000UVA-C-2391 \u0000Rev. Jul. 11, 2018 \u0000Pension Accounting at AT&T \u0000Company Description \u0000AT&T Inc. (AT&T) is the largest communications company in the world, responsible for transferring more than 100 petabytes of traffic daily. It is a component of the Dow Jones Industrial Average and operates on six continents, representing nearly the entire world economy, and is known for innovation by sponsoring over 12,000 patents worldwide. The company, headquartered in Dallas, Texas, has roots in the American Telephone and Telegraph Company established by Alexander Graham Bell in 1885. \u0000Assignment \u0000. . .","PeriodicalId":373500,"journal":{"name":"EduRN: Financial Economics Education (FEN) (Topic)","volume":"36 3","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-05-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120914568","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Paul Capital and Project U: Secondary Sales of Private Equity Stakes","authors":"Susan J. Chaplinsky, Dan Mulderry","doi":"10.2139/ssrn.2974454","DOIUrl":"https://doi.org/10.2139/ssrn.2974454","url":null,"abstract":"At a time of market turmoil, a university investment manager wants to unload the school's entire private equity portfolio; yet no public market exists, so the assistance of a partner at a PE firm is sought. This case provides an introduction to a range of secondary transactions and the valuation challenges that arise. \u0000 \u0000Excerpt \u0000 \u0000UVA-F-1626 \u0000 \u0000Rev. Oct. 10, 2011 \u0000 \u0000PAUL CAPITAL AND PROJECT U: \u0000 \u0000SECONDARY SALES OF PRIVATE EQUITY STAKES \u0000 \u0000Fall 2008 was a period of unprecedented market turmoil. Day after day, the headlines reported large declines in stock prices as waves of selling hit the market. Following the bankruptcy of Lehman Brothers in September, the S&P 500 had declined more than 50% from its 2007 high. Hedge funds were hit with redemption requests, causing them to liquidate securities. Even the hallowed halls of academia did not escape the carnage. Following the lead of Harvard and Yale over the previous decade, university endowments had aggressively increased their allocations to private equity (PE) and other so-called alternative investments. While these investments had often produced impressive returns, the previously favorable view of the sector quickly soured. As the value of the investments fell, they could not be easily sold because no public market existed for them. Further, investors in PE funds faced prospective capital calls that required them to put up additional capital. With cash in short supply, universities and other limited partners (LPs), facing budget pressures and investment losses, looked to unload their stakes in private equity. \u0000 \u0000It was in this context that Patrick Derry, a partner at Paul Capital, had been contacted in November 2008 by an investment manager at Rhodes University seeking to sell its $ 162 million commitment to private equity. Derry had a good relationship with the investment manager and knew that the endowment was an LP with high-quality interests in PE funds. Because of his relationship and Paul Capital's reputation, this would be an exclusive deal to purchase the entirety of the endowment's holdings, if agreement could be reached on terms. In November, the investment committee at Paul Capital had authorized proceeding with “Project U” and had given the go-ahead for the first phase of due diligence. In February 2009, with the first and follow-up phases of due diligence completed, Paul Capital was nearing completion of a final offer to present to the endowment's investment committee. After investing nearly three solid months of work on the deal, Derry recalled, “It's often difficult to truly judge the seller's motivation. In this case, given what happened in the fall, we felt pretty good about the university's need to sell, but all that can change once a seller sees the size of the discount.” \u0000 \u0000. . .","PeriodicalId":373500,"journal":{"name":"EduRN: Financial Economics Education (FEN) (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-05-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131126848","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Business Valuation: Standard Approaches and Applications","authors":"Michael J. Schill","doi":"10.2139/ssrn.2974498","DOIUrl":"https://doi.org/10.2139/ssrn.2974498","url":null,"abstract":"This note provides an introduction to the standard approaches used to value businesses from the perspective of the investor (e.g., discounted cash flow, market multiples). Each approach is illustrated with a specific practical application. The note provides an in-depth example of discounted cash flow valuation of a firm including cash flow forecasting, terminal value estimation, and cost of capital determination. To focus the analysis, the note does not treat the specific complexities associated with M&A analysis. \u0000Excerpt \u0000UVA-F-1684 \u0000Rev. Apr. 27, 2018 \u0000Business Valuation: Standard Approaches and Applications \u0000Determining the value of a business is critical to many important managerial decisions. Because the future of any enterprise is uncertain, business valuations are rarely identical across analysts. Moreover, because of the complicated nature of assessing a business value, methods vary. In this note we review standard approaches to valuing businesses from the perspective of the investor and practical applications of each. Although we do not treat the specific complexities associated with combining businesses, such as in M&A analysis, we provide tools that are foundational to such analysis. \u0000Basic Frameworks \u0000To set an investor-based framework for our discussion of business valuation, Figure 1 presents what might be called an investor's balance sheet. This balance sheet for a business is somewhat different from the standard total asset format published in company financial statements in that it focuses on the net assets or total capital invested in the business by debt and equity investors. On the left side, net assets are divided into two categories. Net working capital captures the net investment in liquid operating assets—current assets less non-interest-bearing current liabilities. Net fixed assets captures the net investment in long-term assets such as property, plant, and equipment. The sum of these two categories is termed net assets. \u0000. . .","PeriodicalId":373500,"journal":{"name":"EduRN: Financial Economics Education (FEN) (Topic)","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-05-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122657527","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Janet Yellen: Navigating Uncharted Waters","authors":"Francis E. Warnock","doi":"10.2139/ssrn.2974564","DOIUrl":"https://doi.org/10.2139/ssrn.2974564","url":null,"abstract":"In January 2016, Janet Yellen, finishing her second year as chair of the Board of Governors of the U.S. Federal Reserve, was navigating uncharted waters along a number of dimensions. She had inherited an unruly FOMC. Over the past year, some members had publicly called for more expansionary Fed policy; others called for an end to the expansionary Fed policy; and still others worried aloud that Fed policy might be creating bubbles and risks to financial stability. And Yellen faced at least three pressing questions: How, after the Fed's balance sheet had expanded fourfold in a few short years, should the Fed guide the public through the eventual unwinding of that balance sheet? Relatedly, when should it begin to sell some of its $2.46 trillion in Treasury holdings? And was the December 2015 increase of the federal funds rate—the start of the first tightening phase in more than a decade—the right decision, or would the U.S. economy falter and force the Fed to reverse course? This case also presents a brief history of Fed policy and asks the reader to consider the best course of action for the Fed to take. This case was written as an updated version of “Yellen, Guidance, and the Exit Strategy,” (GEM-0121) and may be used in its place. \u0000 \u0000Excerpt \u0000 \u0000UVA-GEM-0134 \u0000 \u0000Rev. Mar. 6, 2017 \u0000 \u0000Janet Yellen: Navigating Uncharted Waters \u0000 \u0000[N]o central bank anywhere on the planet…has the experience of successfully navigating a return home from the place in which we now find ourselves. No central bank—not, at least, the Federal Reserve—has ever been on this cruise before. \u0000 \u0000—Richard W. Fisher, President and CEO, Federal Reserve Bank of Dallas \u0000 \u0000In February 2017, Janet Yellen, entering her fourth and likely final year as chair of the Board of Governors of the U.S.Federal Reserve (the Fed), looked out at the Lincoln Memorial while reflecting on the Federal Open Market Committee's tentative tightening of U.S. monetary policy. For Yellen, the modest year-end tightenings in 2015 and 2016 were first steps toward a normalization of U.S. monetary policy. She knew that short rates had been too low for too long—the federal funds rate had been near 0% for seven years—perhaps sowing the seeds for future financial crises, and that some upward movement in the federal funds rate would, all else equal, be desirable. She also yearned for the day when the Fed, rather than being the single largest holder of U.S. Treasury bonds, would once again have a boring, inconsequential Treasury portfolio. \u0000 \u0000. . .","PeriodicalId":373500,"journal":{"name":"EduRN: Financial Economics Education (FEN) (Topic)","volume":"107 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-05-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124799290","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Dominion Resources: Cove Point","authors":"Kenneth M. Eades, Stephen E. Maiden","doi":"10.2139/ssrn.2974553","DOIUrl":"https://doi.org/10.2139/ssrn.2974553","url":null,"abstract":"The treasurer for Dominion Resources Inc. (Dominion), a major U.S. diversified producer and distributor of energy, was heading to meet with the company's investment bankers to discuss the impact of a large project upon Dominion's financing strategy for the next five years. The Cove Point liquefied natural gas (LNG) project would require $3.6 billion to build and represented one of the largest single capital investments in the company's 100-plus year history. \u0000Excerpt \u0000UVA-F-1740 \u0000Rev. Feb. 18, 2016 \u0000Dominion Resources: Cove Point \u0000Scott Hetzer quickly shoved his notes and laptop into his briefcase and slipped on his suit jacket. Hetzer, the treasurer for Dominion Resources Inc. (Dominion), a major U.S. diversified producer and distributor of energy, was heading to meet with the company's investment bankers to discuss the impact of a large project upon Dominion's financing strategy for the next five years. The Cove Point liquefied natural gas (LNG) project would require $ 3.6billion to build and represented one of the largest single capital investments in the company's 100-plus year history. \u0000It was February 15, 2013, and the recent boom in hydraulic fracturing (fracking) had turned the U.S. natural gas market on its head, creating the opportunity to transform Cove Point from an importer of natural gas into primarily an exporter. In the company's 2012 annual report, CEO Thomas F. Farrell II highlighted the project by stating, “We firmly believe that incorporating liquefaction and export capability into our Cove Point LNG import terminal located on the Chesapeake Bay in Lusby, Maryland, can be beneficial both to you, our shareholders, and to gas producers operating in the eastern half of the U.S.” The surging demand for LNG had allowed Dominion to sign long-term contracts for 100% of Cove Point's projected capacity, mitigating the project's financial risk. By mid-2014, Dominion expected to receive the final required permits from the regulatory authorities, such that the only remaining task was to revise the company's financing strategy from 2013 to 2017 to include the $ 3.6billion investment. \u0000After settling into the meeting room in Dominion's Richmond, Virginia, headquarters across from the team of bankers, Hetzer began, “Cove Point represents a terrific opportunity for all Dominion's stakeholders, but financing this sizable project clearly presents multiple financial challenges.” Hetzer knew that determining the optimal mix of debt and equity would need to address the impact upon Dominion's credit ratings as well as regulators and Dominion's existing stock and debt holders. \u0000. . .","PeriodicalId":373500,"journal":{"name":"EduRN: Financial Economics Education (FEN) (Topic)","volume":"99 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-05-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132623234","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Central Express Trucking","authors":"M. Lipson, Steve Munoz","doi":"10.2139/ssrn.2974595","DOIUrl":"https://doi.org/10.2139/ssrn.2974595","url":null,"abstract":"The CEO of Central Express Trucking (CXT), was preoccupied as he drove to work one morning in late October 2013. Diesel fuel prices had been a constant concern at the trucking company he had started 22 years ago. Over the last decade, the steady rise in fuel prices had squeezed margins and dampened profits. Yet despite the existence of fuel surcharges in all of CXT's contracts, short-term fuel price fluctuations still drove fluctuations in profitability. On his mind that morning was a proposal from the newest member of his sales team to offer a contract to a customer (shipper) that did not include a fuel surcharge. \u0000Excerpt \u0000UVA-F-1768 \u0000Rev. Aug. 7 2018 \u0000Central Express Trucking \u0000Tim Conner, the CEO of Central Express Trucking (CXT), was preoccupied as he drove to work one morning in late October 2013. Diesel fuel prices had been a constant concern at the trucking company he had started 22 years ago. Over the last decade, the steady rise in fuel prices had squeezed margins and dampened profits. Furthermore, despite the existence of fuel surcharges in all of CXT's contracts, short-term fuel price fluctuations still drove fluctuations in profitability. On his mind that morning was a proposal from the newest member of his sales team, Erika Svensen, to offer a contract to a customer (shipper) that did not include a fuel surcharge. She believed CXT could manage the associated risk with fuel price contracts at very reasonable prices and had put Conner in touch with Steve Munoz, a managing director in the consulting services division of California-based risk management company Woodside Advisory Group (Woodside). \u0000Since its founding, CXT had followed standard industry practice and had in place agreements with its shippers that would adjust shipping charges based on changes in fuel prices. If fuel prices rose, for example, the invoice to the shipper would be adjusted upward based on an agreed-upon formula. Conner recognized that these fuel surcharge contracts did not fully insulate against fuel price fluctuations and, more importantly, simply passed the risk from carriers such as CXT to the shippers. While large shippers had been willing to bear that risk, smaller shippers were often uncomfortable with this arrangement and were beginning to express concern. Given the highly competitive trucking market and excess shipping capacity in the region at the time, firms like CXT were becoming ever more reliant on those smaller shippers. \u0000Svensen had argued that shipping contracts without a fuel surcharge would be attractive to smaller shippers and might boost business. Conner had followed up with Munoz and thought he understood much more clearly how fuel contracts might benefit the company. Conner had set aside that October morning to review Svensen's proposal, explore the materials provided by Munoz, and make a final decision. While the proposal from Svensen was of modest size, Conner knew his decision that morning might set in motion significant changes in how ","PeriodicalId":373500,"journal":{"name":"EduRN: Financial Economics Education (FEN) (Topic)","volume":"66 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-05-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125107534","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Hamilton's Electronics Services, Inc","authors":"Luann J. Lynch, E. Brownlee","doi":"10.2139/ssrn.2974095","DOIUrl":"https://doi.org/10.2139/ssrn.2974095","url":null,"abstract":"David Hamilton has opened Hamilton's Electronics Services, Inc. During the first year, he was too busy to keep much in the way of accounting records. Early in January of the following year, he hired a local CPA to reconstruct, in summary form, all the transactions that had occurred in his business during the previous year. \u0000Excerpt \u0000UVA-C-2380 \u0000Sept. 19, 2016 \u0000Hamilton's Electronics Services, Inc. \u0000David Hamilton had worked as the senior technician at a large electronics sales and service company for more than 15 years. One day in early December, as he was driving to work, he came to the realization that he was tired of working for a big company. In fact, he decided that what he really wanted was to be self-employed. Knowing that if he gave himself time to think about all the risks and frustrations of starting a business, he would likely change his mind, he wasted no time in getting to work. Upon arriving at work, he handed in his resignation that would become effective in two weeks. \u0000About one month later, Hamilton announced the opening of Hamilton's Electronics Services, Inc. (Hamilton's), an electronics repair company servicing all makes and models of electronic equipment. Throughout that first year, Hamilton was extremely busy and never seemed to have the time to keep much in the way of accounting records. Early in January of the following year, Hamilton hired Janet Lucas, a local CPA, and asked her to reconstruct, in summary form, all the transactions that had occurred in his business during its first year of operations. Hamilton provided Lucas with four boxes full of invoices, bank statements, and a large quantity of miscellaneous business-related information. He hoped that she would eventually be able to provide him with an income statement for his first year of operations and a balance sheet at the end of that year. \u0000Lucas was somewhat skeptical regarding the outcome of her new engagement, and so she decided to spend the following weekend working on it. To her surprise, it appeared that the boxes contained everything she needed to complete a summary analysis of transactions, to transfer all the data into individual accounts, and to prepare an income statement and a balance sheet. \u0000. . .","PeriodicalId":373500,"journal":{"name":"EduRN: Financial Economics Education (FEN) (Topic)","volume":"1 4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-05-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132186652","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}