Description: We are used to hitting Dollarama with a couple of bucks in our pocket to plop down at the cash register while we pick up some low-priced merchandise. It hardly seems to bring to mind images of e-commerce. But now the discount retailer is planning on selling merchandise in bulk via the web, at least on a trial basis. The move from bricks and mortar to the e-world should be an interesting one.
Date: March 29, 2018
1) What do you think of this decision by Dollarama to expand into e-commerce?
2) What might be some of the financial accounting changes that Dollarama would implement to track the success of this new e-commerce decision?
3) On page 304 of Wiley’s Financial Accounting: Tools for Business Decision Making, you can how the Dollarama transitioned from a manual to an electronic inventory system in 2012. What would have been some of the challenges it would have faced prior to switching to an electronic system?
Description: In the light of the controversy surrounding Cambridge Analytics’ use of Facebook user data during the 2016 U.S. election, users are dumping Facebook in a #DeleteFacebook movement. One organization benefiting from the #DeleteFacebook trend is Mastadon. Mastadon – https://mastodon.social/about – is a decentralized social network, meaning its users, in effect, operate the network. And its code is open-source, meaning anyone can see the magician behind the curtain. Mastadon added over 5,000 new users on Monday and Tuesday as the Facebook bad news broke. But Mastadon’s user base, at slightly over a million, is a long way from Facebook’s two billion users.
Date: March 23, 2018
1) Were you aware of the Facebook/Cambridge Analytics controversy?
2) Would the risk over the disclosure of your personal data prompt you to consider a switch to Mastadon or to just simply delete your Facebook account?
3) On page 597 of Wiley’s Financial Accounting: Tools for Business Decision Making, you can read about what type of payoff investors are looking for when they buy Facebook shares. Does this help explain the decline in Facebook’s share price this week?
Description: For 2017, the first time since 2011, combined sales of CDs and vinyl albums outpaced digital downloads of music. Meanwhile, music streaming services such as Spotify continue to grow, and in 2017 streaming accounted for roughly 2/3 of industry revenues. Vinyl, at only $400 million or so of an industry close to $9 billion, is another growth area. After a hiatus of close to 30 years, Sony opened a vinyl pressing plant this past year.
Date: March 24, 2018
1) When you go to a party or social gathering where music is being played, what medium are students using?
2) If you were a cost accountant at Sony, what might be some of the calculations you would be asked perform to support the decision to open a vinyl LP pressing plant?
3) Why do you think vinyl has seen this resurgence of sorts? What business opportunities does this offer?
Description: Two sixth-grade students from Calgary have gotten lots of attention for their online petition to encourage Starbucks to switch to fully-recyclable beverage cups. Mya Chau and Eve Helman have had over 300,000 signatures on their petition on Change.org. Environmental groups have supported the two young environmentalists by funding them to travel to the Starbucks annual shareholders meeting in Seattle. Mya and Eve were unsure though if they would be allowed to present their petition to the meeting.
Date: March 19, 2018
1) Have you ever wondered about whether beverage cups are recyclable? Does it impact your buying decisions?
2) The article states that some time ago Starbucks promised to develop a solution to the problem of the cups by 2015, but that the company – and we might say its competitors – have obviously not met this target. Why do you think the company has failed to meet this target?
3) In Wiley’s Auditing: A Practical Approach, you can read about audits of corporate social responsibility. If you were responsible for preparing a corporate social responsibility report for Starbucks, how might you disclose the recyclable cup story?
Description: Apple is taking steps to advance its role in media content through its purchase of Texture. Texture, originally known as Next Issue, allows subscribers to access content from over 200 magazines for a subscription fee of $9.99 per month. We don’t seem to know at this point what amount Apple paid for this media entity, but it seems like an interesting strategic move in this era of shifting media fortunes.
Date: March 13, 2018
1) Have you or any of your classmates accessed Texture? Would you pay $9.99 for this service?
2) The article notes that Texture never revealed its subscriber statistics before as it was a private company. What are some of the reporting differences between a public company and a private company?
3) On page 485 of Wiley’s Financial Accounting: Tools for Business Decision Making, you can read about the company Interbrand and its role in assigning value to the trademarks for various large companies, including Apple. Search the latest rankings to see if Apple is still in the number one position.
Description: Many of us recall the Equifax data hack last year. Approximately 150 million consumers may have had their private data fall into the hands of the hackers. And many were shocked to hear last year that Equifax waited a number of weeks before revealing the security breach to the public. Now we are finding out that an insider is facing both criminal and civil charges for using information about the breach to dump his Equifax shares prior to Equifax informing the public about the matter. Reportedly, this helped the employee avoid a loss of over $100,000 on his shares. But perhaps he is now reconsidering the value of this trade.
Date: March 15, 2018
1) Do you know anyone who had their information compromised in the Equifax breach?
2) What are some of the ethical issues involved with insider trading like this?
3) On page 430 of Wiley’s Financial Accounting: Tools for Business Decision Making, you can read about the important role Equifax and similar agencies perform in helping companies measure risk associated with default by customers. Do you think this case of insider trading will impact Equifax’s business?
Description: It’s one of the more widely anticipated Initial Public Offerings (IPO) of 2018: the IPO for cloud storage company Dropbox. Going public does appear to have changed the valuation of Dropbox. Whereas Dropbox was valued at $10 billion in a round of private funding 4 years ago, it is closer to $7.5 billion in this planned IPO. Perhaps the venture capital folks were more optimistic about tech companies then than the public markets are now.
Date: March 12, 2018
1) Are you or any of your classmates Dropbox users? Do you use the free service only or are you paying for additional cloud storage?
2) What could be the reasons for the big drop in valuation from $10 billion to $7.5 billion?
3) Where can you read about IPOs in Wiley’s Financial Accounting: Tools for Business Decision Making?
Description: Rogers and Bell are raising rates. This Monday, March 12, Rogers is cranking up the rates on most of its internet plans by $8 a month. Then, starting April 1, Bell will follow suit with increases up to $5 per month in certain areas. Needless to say, customers are not happy. Telus, the other large player, has not announced any increase.
Date: March 9, 2018
1) Are you a client of either Rogers or Bell? How will this increase impact your budget as a student?
2) If you were an executive of Telus, what strategic moves could you make with the other two major providers raising their rates?
3) You can read about Bell Canada Enterprises dividend paying ratios on page 609 of Wiley’s Financial Accounting: Tools for Business Decision Making, Do you think that the dividend ratios may have influenced any decision to raise the prices for internet plans?
Description: Millennials have been tagged with the disruptor term for their influence over such things shopping trends. The latest casualty in this trend may be the credit card. About only one third of millennials are holding credit cards. Some of this may be due to legislation impacting credit card recruiters on campus. Another influence may be rising student debt loads for the millennial and the impact of the Great Recession on career plans.
Date: February 27, 2018; corrected February 28, 2018
1) Do you carry a credit card? Why or why not?
2) What could be the impact of this trend on credit card companies? How could they respond strategically?
3) On page 413 of Wiley’s Financial Accounting: Tools for Business Decision Making, you can read about Canadian Tire’s credit card program. When would a company classify a credit card sale as an accounts receivable and when would it consider it cash?
Description: At one time, the e-education company Knowledge House was a well-respected leader in Nova Scotia’s tech sector. But that, as they say, was some time ago. With over 100 employees in the late 1990s, Knowledge House imploded in 2001 when its share price collapsed. On Friday, two key players from the company’s executive suite were convicted of stock price manipulation in the 18 months prior to the collapse. During that period, approximately $11 million was used to buy 50% of the Knowledge House shares trading on the TSX.
Date: March 9, 2018
1) What interests you about this story?
2) What could a company’s accounting staff or auditors do to help detect or prevent this type of behaviour by senior managers?
3) In this story, we can see how long this case took to bring the offenders to Justice. In fact, the article points out that there are still outstanding legal matters before the courts. What impacts might these long timelines have on ethical choices people make in the marketplace?