Description: There has been considerable protest over the current federal government’s proposal to close tax loopholes for private corporations. Small business owners and professionals have been using various forms of ‘income sprinkling’ to lower their tax burden. One Liberal MP, Wayne Long, has broken ranks with his government colleagues, expressing his concern about the impact of the planned reforms on entrepreneurs. Meanwhile Michael Wolfson of the University of Ottawa maintains his research indicates the impact of the changes will be minimal.
Date: September 14, 2017
1) Do you know any entrepreneurs or professionals who have been discussing how these pending tax changes will impact them? What have they been saying about the matter?
2) Which argument do you find the most convincing, that of Professor Wilson or that of Mr. Long?
3) MP Wayne Long has taken the unusual step of publicly disagreeing with his own government. What might be some of the implications for his political career?
Description: And if the Equifax breach wasn’t bad enough, this past week we found out what a terrible job Equifax did in handling the crisis. First, we learned the company waited six weeks to tell us about the breach, leaving consumers uninformed their data was in peril. Second, we now know at least three Equifax executives dumped shares a few days after the breach, well before the business press and analysts knew enough to punish the company’s share price. Ed Zitron of media company EZPR was quoted in the CNN piece as saying “All they’ve done is terrify people more.”
Date: September 13, 2017
1) What does this additional information on the Equifax breach say to you? What is your opinion on the company’s response?
2) Why do you think Equifax executives sold their shares within a few days of the crash? Do you regard this as ethical?
3) Watch the brief video on how some companies have done a very bad job handling a crisis. Why do you think these bad choices occur?
Description: Canadians owe more. That is, for every dollar of income, Canadians owed $1.678, up from the amount owed in the prior quarter. With interest rates now on the way up following years of low rates, economists worry that this rising debt load poses an economic risk.
Date: September 15, 2017
1) Why do you think debt levels are rising?
2) Wiley’s Kimmel, Financial Accounting: Tools for Business Decision-Making, Seventh Canadian Edition, often discusses the importance of financial information for decision making. Where do you find information in your personal financial life to help you decide whether or not to take on new debt?
3) Where in Wiley’s Financial Accounting: Tools for Business Decision-Making, Seventh Canadian Edition, can you find information on ratios that will help you determine changes in a company’s debt load?
Description: Welcome back to another academic year of Wiley’s Weekly Accounting Updates. And if you are at Dalhousie University (or King’s College) in Halifax, you might find your welcome back to campus has been accompanied by the presence of the Halifax police. A police program in force since 2004 sees enhanced patrols around the two schools to provide education, prevention, and – where required – enforcement. There’s a rather unique cost-sharing arrangement in place for this operation Fall-Back, with the police force providing the assets (the police cruisers) and Dalhousie picking up the cost of the force supplying the police officers. No mention was made in the story of the costs of fuel and other operating expenses.
Date: September 5, 2017
1) What are the first few days around your campus like? Do you think an enhanced police presence would be useful?
2) What is your opinion of the cost sharing arrangement between Dalhousie University and the police force?
3) The story says “the university will pay for officers to patrol the area during peak times and dates throughout the year.” Put yourself in the position of an accountant working for the police force. What would you include as the costs for the officers patrolling the area if you were preparing to invoice Dalhousie University?
Description: After years of cuts and restraint on interest rates, on Wednesday the Bank of Canada raised interest rates for the second time in three months. The Bank’s move sparked a rally in the loonie, with the Canadian dollar rising to its highest level in two years versus the United States dollar. The Bank appears to be optimistic that Canada’s economy is bouncing back after having endured some shocks from the collapse of oil prices a couple of years ago.
Date: September 7, 2017
1) What do you think about a rise in interest rates? How does it affect you as a student?
2) Can you find a reference to interest in Wiley’s Kimmel, Financial Accounting: Tools for Business Decision-Making, Seventh Canadian Edition? Where?
3) What items in a company’s financial statements may be impacted by a rise in interest rates? Take a look at the financial statements featured in Chapter One of Wiley’s Financial Accounting: Tools for Business Decision-Making, Seventh Canadian Edition. Perhaps divide your class into teams and see which team can find the most items impacted by interest in five minutes.
Description: And here comes another online security breach. Thursday Equifax, a credit rating agency, announced that a data breach has affected over 140 million consumers. While most of these live in the United States, a number of British and Canadian consumers may also have had their sensitive data compromised. One thing Equifax has offered is a free year of credit monitoring and identity theft insurance protection. Wired magazine says “take it.”
Date: September 7, 2017
1) What does a credit score mean? Why do businesses use credit scores?
2) Why do you think hackers have targeted Equifax?
3) Have you ever had your online data compromised?
Description: Netflix‘s earnings per share exceeded the analysts’ estimates in its recent report on the first quarter. Conversely, the number of new subscribers was below what analysts had predicted. Overall, Netflix seems profitable with net income up to $178 million, an increase of about $150 million. The stock has been doing quite nicely, with the share price up close to 20% in 2017.
Date: April 17, 2017
1) Are you a Netflix subscriber? Why?
2) What can you find out about earnings per share and the price-earnings ratio in Wiley’s Kimmel, Financial Accounting: Tools for Business Decision-Making, Sixth Canadian Edition?
3) Why is the Earnings per Share ratio a tricky one to use in evaluating a company’s ratios?
Description: It’s probably news that Canadian dairy farmers did not want to hear. While visiting Wisconsin, U.S. President Donald Trump promised he would stand up for dairy farmers in that dairy state, criticizing current trade rules as unfair. Meanwhile, the dairy sector in Australia, New Zealand and Mexico welcomed the thought of attacking the Canadian dairy industry through the World Trade Organization.
Date: April 19, 2017
1) The article speaks about a deal that prices the ingredients for cheese-making below cost. Why would industry price ingredients below cost? Doesn’t that seem like a way to go out of business?
2) If you were providing financial advice to a Canadian dairy farmer, what might be some strategies you would recommend to help compete with the farmers from other nations?
3) Do you think that the threats from the U.S. and other nations will end up in big changes for Canadian dairy farmers?
Description: You’ve probably seen that viral video of the passenger being dragged off of the United Airlines flight. United has been taking more than a few shots in social media on this one, and perhaps the impact will be felt on its bottom line. And in the past week or so, we have seen discussion in Canada about Air Canada having disappointed passengers through the so-called bumping practice, including the bumping of a PEI family on a long-planned trip to Costa Rica. Federal Transport Minister Marc Garneau has said changes are coming to better protect Canadian air travelers.
Date: April 17, 2017
1) Have you ever found yourself the victim of overbooking on an airline flight? What happened?
2) Do you think the practice of bumping is ethical? Why or why not?
3) Do you think the recent overbooking stories will have a financial impact on the airlines involved?
Description: In the battle of the two giants, ride service Lyft raised $600 million to help it continue the market share struggle against the bigger Uber. Both of these taxi-supplanters are continuing to grow. Uber, however, is facing a few incidents of bad publicity, including the release of a video showing an executive in an unfavourable light.
Date: April 11, 2017
1) Have you or any of your classmates used both Lyft and Uber? How do they compare?
2) Which of these two companies do you think will emerge as the dominant one in the industry?
3) The article mentions that pension funds and sovereign wealth funds are now looking to private companies such as Lyft rather than public companies. Why do you think they are making these investments?