Save Hard; Then Splurge

Posted by & filed under Marketing & Strategy, Student life.

Description: Jennifer Anchan drives a 2001 Honda Accord that she bought for $1,700 cash; she also purchases used items off Kiiji, and shops more often at dollar stores these days. But she is willing to spend big for travel and concert tickets, savouring experiences with friends over acquiring new things. Recent data from the Royal Bank of Canada (RBC) shows Canadians are cutting back spending on restaurants and clothing, and focusing discretionary dollars on flights and hotel rooms instead. Queen’s University marketing professor Tandy Thomas is calling this phenomenon “revenge spending,” a not-so-surprising outlet for having missed vacations and concerts during the earlier stages of the pandemic.

Date:  April 15, 2023

Source:  cbc.ca

 Link: https://www.cbc.ca/radio/costofliving/scrimp-and-save-rbc-spending-tracker-1.6810036

Discussion points:

1) How many of your fellow students are planning a travel vacation after school finishes this term?

2) Have you adopted the strategy to scrimp and save, then spend that “little pot of gold?”

3) On page 6-18 of Wiley’s Managerial Accounting: Tools for Business Decision-Making we see that Air Canada has a higher contribution margin on its first-class tickets than it earns on economy-class sales. Given the revenge spending trend, what might Air Canada do to increase its sales of first-class tickets?

Meteorite Money

Posted by & filed under Accounting Careers, Financial Accounting.

Description: Sonic booms and a bright fireball that could be seen in broad daylight marked the crashing meteor that left a trail somewhere near the Maine-New Brunswick border last Saturday. And now, all you have to do is find a one kilogram piece of the space rock in the woods to earn yourself a $25,000 fee from the Maine Mineral and Gem Museum. Of course, there’s no guarantee that anyone will find a one kg fragment, but the museum advises the searchers to familiarize themselves with what a chunk of a meteorite might look like before embarking on the treasure hunt.

Date:  April 12, 2023

Source:  ctvnews.ca

 Link: https://www.ctvnews.ca/sci-tech/maine-museum-offers-us-25k-reward-for-meteorites-recovered-near-canadian-border-1.6352567

Discussion points:

1) Have you ever witnessed a meteor crashing to earth or found a meteor fragment?

2) How do you think an organization would go about setting a price for a rare object like this?

3) Chapter nine of Wiley’s Financial Accounting: Tools for Business Decision-Making includes the concept of depreciation of long-lived assets. If you were an accountant at an institution like the Maine Mineral and Gem Museum, would you apply depreciation to their special collection of unique items for exhibits?

Nice Raise, If You Can Get It

Posted by & filed under Managerial Accounting.

Description: Fresh off his appearance with other grocery chain executives in front of a parliamentary committee examining food prices, comes news that Loblaw’s Galen Weston received $8.4 million in remuneration of various types in 2022. While this is up from $5.4 million in 2021, Catherine Thomas, speaking for Loblaws in defense of the move, noted that the increased amount “reflects the fact that in 2021 he transitioned back to Loblaw full-time mid-year.” It could be fascinating to see if the raise gains any traction with Canadian consumers fed up with the rising costs of food in this inflationary cycle.

Date:  April 5, 2023

Source:  cbc.ca

 Link: https://www.cbc.ca/news/business/grocery-executive-compensation-1.6802091

Discussion points:

1) How do you respond when your hear about CEO pay?

2) Have you ever had a class where you had some discussion about setting pay for CEOs? If so, how did the discussion go?

3) On page 2-5 of Wiley’s Managerial Accounting: Tools for Business Decision-Making we learn about the differences between product costs and period costs. In which of these categories would you place a CEO’s compensation?

A Tough End to the School Year

Posted by & filed under Accounting Careers, Internal control, Student life.

Description: In my small university town, Sackville, New Brunswick, Friday saw a tough end to the university year as a major fire not only left several Mount Allison University students and a university staff member homeless, it also wiped out a major social landmark by destroying Joey’s Pizza and Pasta, a restaurant favoured by students, faculty, staff, and town residents. The day started a bit surreal for me. I looked out my apartment window at breakfast time to watch the first few firefighters arrive and enter the upstairs apartment with hoses. It wasn’t long before they began waging war on the smoke and flames from outside, crashing down walls in the process. With all the normal stresses of end of term, this group of students has moved to a different level, though they have noted how a well-organized emergency response by the university helped right away to meet their needs.

Date:  April 8, 2023

Source:  ctvnews.ca

 Link: https://atlantic.ctvnews.ca/popular-restaurant-apartment-buildings-destroyed-in-sackville-n-b-fire-1.6347855

Discussion points:

1) Has your university ever suffered a similar crisis for students during your time at school?

2) What tips do you and your classmates have for dealing with exam stress at this time of year?

3) On page 7-3 of Wiley’s Financial Accounting: Tools for Business Decision-Making we see that risk assessment is one of the five components of a company’s system of internal control. If you were a financial officer at a chain of restaurants, what might be some of the key risks you would see?

Falsifying Business Records

Posted by & filed under Ethics, Financial Reporting and Analysis.

Description: One of the biggest news items this past week had to be the indictment of former US president Donald Trump in a New York City courtroom. Though there was lots of debate about the event, from an accounting perspective, the interesting notion is that the charges revolve around the falsification of business records. One key element of this type of crime is that it’s not just the act of making the wrong entry onto a document: in addition, the crime requires some intent to deceive in search of a benefit. Examples include companies falsifying financial reports to fool creditors or understating income on tax forms to reduce the amount of tax paid.

Date:  April 7, 2023

Source:  cbc.ca

 Link: https://abcnews.go.com/US/donald-trump-indictment-falsifying-business-records/story?id=98377002

Discussion points:

1) Did you and your classmates follow the news around this first indictment of a former US president?

2) Have you ever been the victim of false statements on a business document or some other important document?

3) On page 10-7 of Wiley’s Understanding Financial Accounting you will find an inset box dealing with ethics related to debt covenants. What might be some types of false statements users of financial statements need to be wary of when the company faces a debt covenant?

WestJet Strike?

Posted by & filed under Marketing & Strategy, Student life.

Description: It’s probably not the news you wanted to hear as you wind down the winter term at university and get ready to travel back home for the summer break: WestJet’s pilots’ union is set for a strike vote. Bernard Lewall, a union representative, is frustrated by the results of the last six months of negotiations, noting that “WestJet used to be a place where young pilots wanted to come and work. That’s not the case anymore.” It is not clear exactly when a strike could begin, but the plus for students is that it appears there may be no interruption of travel until around the long weekend in May.

Date:  March 31, 2023

Source:  cbc.ca

 Link: https://www.cbc.ca/news/canada/calgary/westjet-pilot-union-alberta-1.6797805

Discussion points:

1) What are your end-of-term travel plans?

2) Have you ever had your travel plans affected by a strike?

3) On page 9-1 of Wiley’s Financial Accounting: Tools for Business Decision-Making we see a vignette that discusses WestJet’s launch of a discount carrier known as Swoop, something that is also mentioned in the accompanying article. What are the strengths and the weaknesses of starting up Swoop while also running a regular airline carrier like WestJet?

Good Times at Dollarama

Posted by & filed under Financial Reporting and Analysis, Student life.

Description: Inflationary times have been good times for Dollarama. The rising cost of living has driven customers Dollarama’s way in a search of savings, pushing sales figures about 17 percent higher than in the previous fiscal year. Profits are also up, prompting the discount retailer to pump up the quarterly dividend to its shareholders.

Date:  March 29, 2023

Source:  cbc.ca

 Link: https://www.cbc.ca/news/business/dollarama-retail-earnings-1.6794474

Discussion points:

1) Do you or your classmates rely on Dollarama in your search for savings while at school?

2) Does your school have an investment club or a course where you actually trade stocks? If so, how important is dividend history to your trading choices?

3) Wiley’s Understanding Financial Accounting opens on its first page with a discussion of Dollarama’s growth and how that growth relates to its corporate financial reporting. What do you find interests you most about this vignette?

Rogers-Shaw Merger Approved

Posted by & filed under Canadian Government, Marketing & Strategy, Student life.

Description: The Government of Canada has approved Rogers takeover of Shaw. The move grants Rogers an even greater share of Canada’s cable and media business. But Rogers mobile phone business will see only limited gains as it picks up the smaller prize, Shaw Mobile, which operates primarily in Alberta and BC. The larger portion of Shaw’s cellular operations, Freedom Mobile, has to be sold to Quebec-based Videotron to satisfy the federal government’s mandate to protect consumers against too much corporate concentration.

Date:  March 31, 2023

Source:  cbc.ca

 Link: https://www.cbc.ca/news/business/rogers-shaw-approval-1.6797175

Discussion points:

1) What do you think of the cellular rates you are paying?

2) How do you think Rogers’ purchase of Shaw will impact the wireless market in Canada?

3) On page 13-4 of Wiley’s Managerial Accounting: Tools for Business Decision-Making we read about Rogers Communications capital expenditures in 2019. How much did the company expend in this category in its most recent fiscal year?

Blackberry Sells Patents

Posted by & filed under Financial Accounting, Student life.

Description: Blackberry, that Canadian company once known for its namesake phones, is now rebranded as a software and messaging security organization. Consistent with this outlook, Blackberry has sold-off patents it no longer considers part of its core business for the tidy sum of $900 million. Part of the compensation is based on future royalties of up to $700 million.

Date:  March 21, 2023

Source:  thestar.com

 Link: https://www.thestar.com/business/2023/03/21/blackberry-strikes-new-deal-to-sell-portfolio-of-non-core-patents.html?source=newsletter&utm_email=760BE779956395955CFBBA5C497D22A3

Discussion points:

1) Have you ever used a Blackberry handset?

2) What is your opinion of how this Canadian company has transformed itself in the face of the collapse of its once-famous cellular device?

3) Page 8-29 of Wiley’s Understanding Financial Accounting discusses patents. How long does patent protection last in Canada?

Here Comes Shake Shack

Posted by & filed under Marketing & Strategy, Student life.

Description: Canada will be getting its first Shake Shack in 2024. The American burger joint has targeted Toronto for its entry into our Canadian market, but it has said it plans to have 35 stores here by 2035. The fast food market in Canada reports growing sales, with the number up 9% in 2022 and 11% in 2021.

Date:  March 22, 2023

Source:  cbc.ca

 Link: https://www.cbc.ca/news/business/shake-shack-expansion-1.6786716

Discussion points:

1) Have you or any of your classmates ever dined at Shake Shack? How does it stack up against the competition?

2) Have you ever thought about opening a restaurant franchise after you graduate?

3) On page 13-66 of Wiley’s Financial Accounting: Tools for Business Decision-Making we see a problem that compares data between two burger giants, McDonald’s and Wendy’s. Do a bit of research to see if you can determine the top five burger competitors Shake Shack will have to face in our market.