Description: Giant retailer Toys “R” Us announced this week that it is seeking to reorganize under the protection of bankruptcy regulations in both the United States and Canada. Like many a bricks and mortar retail establishment, part of the problem is the rise of online vendors, particularly Amazon. The company intends to remain open over the lucrative holiday season as it struggles with $5 billion in debt.
Date: September 19, 2017
1) Were you surprised to hear this news? Why or why not?
2) The CEO says the majority of the individual stores are profitable. How then could the corporation as a whole be in financial trouble?
3) In chapter two of Wiley’s Financial Accounting: Tools for Business Decision-Making, we read of an important assumption about accounting that can be called into question when a business is threatened with failure. What is that assumption?