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Description: One thing the Corona virus seems to have done in Canada is that it created a building boom with Canadians assembling IKEA desks to beat the band. During the pandemic, Canadians purchased 631,800 desks, presumably to help them work at home during this time. This outfitting of home offices has been a welcome boost for the Swedish firm as overall sales are down 8.7 percent. To IKEA’s credit though, they have not laid off a single employee.

Date:  November 19, 2020

Source:  thestar.com

 Link: https://www.thestar.com/business/2020/11/19/canadians-assembled-631800-ikea-desks-and-counting-during-the-pandemic.html

Discussion points:

1) Are you familiar with IKEA furniture? Do you have any in your living quarters?

2) Have you ever assembled IKEA furniture? How did your project go?

3) Chapter 7 in Wiley’s Financial Accounting: Tools for Business Decision-Making we read of a variety of strategies for cash management. If you were an accountant working for IKEA, what strategies would you advise the company to use during this time of sales decline?

6 Responses to “Canadians Build Desks”

  1. Weiting Li, Xiaoming Li, Wenting Zhang, Naikang Chen

    1) Are you familiar with IKEA furniture? Do you have any in your living quarters?
    – Yes! We all love IKEA furnitures. Bed, lamp, table, vase and so on. They are beautifully designed and relatively cheap with good quality, so it is generally an economical choice to go to IKEA for houseware.
    2) Have you ever assembled IKEA furniture? How did your project go?
    – Everyone of us in the group has experience with assembling IKEA furniture. Some assembled table, some assembled wooden bead frame. The direction booklet are generally very clear, so It is both amusing and has a sense of achievement to assemble these furniture.
    3) Chapter 7 in Wiley’s Financial Accounting: Tools for Business Decision-Making we read of a variety of strategies for cash management. If you were an accountant working for IKEA, what strategies would you advise the company to use during this time of sales decline?
    – Our advice would be the same that was discussed in the textbook: (a) collect receivables quicker, (b) keep inventory levels low, (c) take advantage of credit periods, (d) plan the timing of major expenditures, (e) invest idle cash, and (f) prepare a cash budget. With a better management of cash, companies should have a better ability to go through the covid period.

    Reply
  2. Dylan Corkum, Chacha Dominion, Adrianna Dewar

    Data Re-entry for Data entry error as per Professor White: from ‘Now That is Nice’
    1) Our group would feel like our work was appreciated and that our team thought we are doing a good job.
    2) Yes. Our group would be interested in working in banking. Though banking is different from accounting, we feel that banking would help us develop many of the same skills and prepare us to be an accountant.
    3) Investors seem to favor TD Bank because there is a higher price-earnings ratio, meaning they are willing to pay more for the same value. The current PE ratio for TD Bank is 11.40 and CIBC’s is 10.03. TD Bank is still preferred to CIBC, but not by as much as it once was.

    Reply
  3. Emile Wold, Andrew Warner, Katherine Waller

    1)Yes, we all have a piece of furniture in our living quarter.

    2) everyone in the group have assembled an IKEA furniture, and we all enjoy making them, everything from a lamp to a desk

    3) With a high level of inventory IKEA can meet up with the demand, however due decrease in sale, Ikea can lower the inventory which eliminate the risks of not selling the inventory which reduces costs. IKEA can prepare a cash budget for the period, to understand the cash flow better in order to make the right business decisions. It is important to plan major expenditure ahead of time.

    Reply
  4. Jessie LeGrand, Tevin Lewis, Bryden MacDonald

    1. Everyone in our group were very familiar with Ikea, all possessing some type of furniture or home accessory from them. This was unsurprising to us, as Ikea does tend to carry a stigma of being “student furniture” due to its affordability and style.
    2. Most of us have assembled some kind of Ikea furniture. Those of us who haven’t had at least watched the process. Generally, Ikea furniture is very complicated to assemble (especially if you do not read the instructions); however, we feel they make it very accessible through the large number of instructions they supply you with.
    3. The two most important strategies we would suggest would be to keep inventory low and take advantage of credit periods. Watching their inventory control, they must make sure they are not purchasing excessive inventory as demand drops and avoid paying their suppliers before needed. There was some debate over whether speeding up the collection on receivables was necessary, as the purchases now being done mostly online (i.e., through credit cards) would mean a quicker and more transparent transfer of money in general (electronic receipts). Furthermore, there was also debate over whether now is the time to be investing money, as the situation around the pandemic is still unstable and volatile (no one knows what will happen next).

    Reply
  5. Nicolas Gauvin, David Elsinga, Ashley French

    1. We are all familiar with Ikea. Nicolas has a desk from there that he occasionally uses for studying.
    2. Nicolas has assembled furniture from Ikea before. The project went well however it was time consuming due to confusing instructions and multiple pieces.
    3. As per chapter 7 of the Wiley’s financial accounting textbook. We recommend that Ikea considers to keep inventory low, reconsider spending money into major investments do the volatility of the economy, and try to collect receivables quicker if possible for the company. These options could help Ikea during the pandemic.

    Reply
  6. Hugo Power Rachel Price Dylan Rhyno

    1) All of us both have Ikea furniture in our apartment as well as in our family homes.

    2) Overall, we all thought assembling Ikea furniture was pretty easy. They provide all the tools for the job as well as 24/7 assembly phone line if you have any questions.

    3) The main thing would be for Ikea to monitor their inventory. As sales drop, Ikea must lookout to not buy an excessive amount of inventory. They would also need to avoid paying their suppliers before needed.

    Reply

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