View Homework Help – Harnischferger Case from ACG at Florida International University. Harnischfeger Corporation 1. Describe clearly the accounting. Agenda Case Facts Strategy Analysis Accounting Analysis. Directions Read the “Harnischfeger Corp” case study and answer the following questions. Submit your completed assignment no later than the last day of Week .
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This resulted in a change in sales calculation. I feel that the financial reporting should help rather than hinder the implementation of our operating strategy.
As a company you have to put the best foot forward if you want to raise capital, convince customers that you are a viable company, and attract talented people to work for the company. The company adjusted its allowance for doubtful accounts to 6.
Avoid the violation of debt covenant restrictions, and 4.
We wish to tell the truth but do not want to be overly conservative in doing so. Change in the allowance for harnischefger accounts. Thanks for being a serene listener.
Harnischfeger Corporation | Free Essays –
To make this website work, we log user data and share it with processors. Low High cost of establishing economies of scale High capital investment required Access to distribution channels is difficult Threat of new entrants is higher for ITG Treat of Substitute Products: Auth with social network: Students point out a number of possible motives for the accounting changes: The reduction in benefits and wedges were significant from to The liquidation means selling of older inventory since the current sales are higher then current purchases then the liquidation will occur and as result any inventory not sold in previous periods must be liquidated.
Boost stock price to raise new capital Meet earnings targets for compensation Avoid violating debt covenants Improve image with customers, suppliers, etc. Goessel was the president and COO, and Mr. Published by Emma Collins Modified over 3 years ago. About project SlidePlayer Terms of Service. How will this change affect future reported profits? EffectiveHarnischfeger began to include in its net sales products purchased from Kobe Steel, Ltd.
Harnischfeger Corporation | Essay Writing Service A+
There is no income tax effect. If people adjust for the differences in accounting policies when they compare us with other companies, then it should not matter whether we follow conservative or liberal policies. What are the economic consequences of these changes to Harnischfeger and its workers?
Without additional research, it is difficult to make conclusive statements on this issue.
The corresponding percentage in was Summarize all the accounting changes Harnischfeger made inand their effects on pre-tax profits and cash flows in From the other side, the workers would suffer a significant economic lost and could lose the motivation to work for the company. This may have an effect on future profits.
How will this change affect profits in future years? The company is taking a risk by expecting that the one-time boost in income and cash in will enable sgudy company to successfully expand internationally and grow in new high tech areas and become profitable once again.
It is to determine risk from the balance coporation Presented by: The earlier philosophy of this company was to choose the conservative alternative whenever there was a choice. My presentations Profile Feedback Log out.
harniscyfeger In any case, these adjustments impose a cost on the user. Are these changes likely to affect future profits? As a result of going to strait-line the company also has changed its harnischfeber depreciation lives on certain U. The Role of Finance in Business. Even thought the changes indicate an optimistic move, it does not guarantee that the company is going to be able to implement its business plan.
Since the company recently experienced the painful consequences of violating these restrictions, it is plausible that the management changed the accounting policies to avoid future violations of the debt restrictions.
See Exhibit 4, Note 2, in the case.
Why do you think the management of Harnischfeger made these accounting changes? From one side that decision could help the company to rebuild the trust of customers and suppliers for continuing in business. Discussion of Question 2 The above analysis shows that most, if not all, of the reported profits of Harnischfeger in are produced by accounting changes.