Cheap gas

Posted by & filed under Cost Accounting, Marketing & Strategy.

Description:  It’s an old story for small town entrepreneurs. The new road takes your customers into the city for better prices, better selection and you’re facing a crisis. But Dave Callahan, owner of an independent station in St. George’s Newfoundland, is striking back. As the Fred Eaglesmith song puts it, “Then they built that overpass and they stay out on the highway.” Dave is hoping to prove the song wrong.

https://www.youtube.com/watch?v=96ugqNZt8g4

Date:  April 6, 2019

Source:  cbc.ca

Discussion points:   

Link: https://www.cbc.ca/news/canada/newfoundland-labrador/dave-callahan-st-georges-1.5082657

1) What do you think of Dave’s new corporate strategy? Do you think it will work?

2) Can you think of some other strategies Dave or a similar small business owner can use to combat this type of situation?

3) Illustration 5-8 in Wiley’s Financial Accounting: Tools for Business Decision-Making explains the way to calculate a company’s gross profit margin. If Dave cuts his prices, what will happen to his gross profit margin?

Most entrepreneurial cities

Posted by & filed under Accounting Careers, Financial Reporting and Analysis.

Description:  It’s not Toronto, or Vancouver. I’m afraid to tell you that those two don’t even make the top ten list. No, according to the Canadian Federation of Independent Business (CFIB), Canada’s most entrepreneurial city is Whitehorse, closely followed by Winkler, Manitoba. There appears to be no one single factor that trumps all others in making a community more entrepreneurial. The CFIB looked at 13 factors in its survey.

Date:  April 3, 2019

Source:  financialpost.com

Link: https://business.financialpost.com/entrepreneur/heres-the-best-canadian-city-to-start-a-small-business-in-no-its-not-toronto-or-waterlooh

Discussion points:   

1) Have you noticed if your hometown or university town is in the top ten? The bottom ten? Were you surprised?

2) Do you have any plans to be an entrepreneur after graduation? What do you see as some of the key factors to consider in locating your business?

3) Chapter 14 in Wiley’s Financial Accounting: Tools for Business Decision-Making shows a wide-variety of ratios that can be used to evaluate various aspects of a business’s performance. If you were an entrepreneur, what do you think would be three key ratios you would put on your “dashboard” to quickly gauge how your business was performing?

Wow! or maybe not.

Posted by & filed under Risk management.


Description:    Wow! Cheap fairs to Europe! Or maybe not. If you are one of those who has been stranded as of Thursday because of the collapse of Wow – a discount airline headquartered in Iceland – then maybe the bloom is off of the rose. Or maybe you’ve had a ticket on Wow for a European vacation post-graduation this summer. Well, not so wow for you. This seems to be another example of an airline that expanded too fast and too soon. leaving clients in the wake.

Date:  March 27, 2019

Source:  thestar.com

Link: https://www.thestar.com/business/2019/03/28/wow-air-abruptly-shuts-down-stranding-passengers.html

Discussion points:   

1) How would feel if you were holding s Wow ticket? Have any of your classmates been caught in this mess?

2) If you were the chief financial officer at a discount airlines, what type of advice might you give management as they sought to expand?

3) Page 360 in Wiley’s Financial Accounting: Tools for Business Decision-Making talks about the subject of risk assessment as a component of a company’s internal control system. What do you think may have gone wrong with Wow’s risk assessment process?

Apple – a service company

Posted by & filed under Marketing & Strategy.


Description:    People have loved the hardware for years, with consumer after consumer gobbling up iPhones and iPads. This week, however, Apple’s latest launch had a definite services focus. A new Apple credit card, a streaming service and an Apple-news subscription that will give consumers access to 300 or so magazines, including big titles like National Geographic and Popular Science. The unique credit card will not have a number!

Date:  March 25, 2019

Source:  globalnews.ca

Link: https://globalnews.ca/news/5093375/apple-news-canada/

Discussion points:   

1) Are you interested in checking out this new Apple streaming service?

2) Why do you think Apple has chosen this new service-oriented strategy?

3) Page 485 in Wiley’s Financial Accounting: Tools for Business Decision-Making tells us that at the time the text was written, Apple was the world’s most valuable brand. Is this still the case in 2019?

McDonald’s goes tech

Posted by & filed under eCommerce.

Description:  At $300 million, restaurant chain McDonald’s is using a major tech acquisition of Dynamic Yield Ltd to jazz up its menu experience. CEO Steve Easterbrook has been promoting technology – like the new order kiosks – as a differentiator for the fast-food giant. By using Dynamic’s technology, McDonald’s will be able to update its drive through menus depending on factors like weather conditions. If the temperature is dropping, for instance, maybe the menu will promote a nice cup of hot coffee over soft drinks.

Date:  March 26, 2019

Source:  financialpost.com

Link: https://business.financialpost.com/news/retail-marketing/mcdonalds-300-million-tech-deal-is-its-largest-in-20-years

Discussion points:   

1) Have you used the McDonald’s app or a kiosk to order your food?

2) Do you think that this acquisition will help boost revenue?

3) Illustration 12-1 in Wiley’s Financial Accounting: Tools for Business Decision-Making explains the difference between a strategic investment and a non-strategic investment. Using this chart as a guide, in which category would you place McDonald’s investment in Dynamic Yield?

More money for OAGNB

Posted by & filed under Accounting Careers, Auditing.

Description:    The Canadian Taxpayers Federation usually is not in the habit of praising a government for spending more money. This past week, however, the Federation did react positively to the news that the Office of the Auditor General of New Brunswick would be receiving an extra $1 million in its budget for 2019-20. This increase seems to put New Brunswick closer to the its Atlantic counterparts in terms of funding for the legislative audit office. By the way, if you are looking for work, a quick check of CareerBeacon shows the Office is already advertising for additional staff to put those new dollars to work. https://www.careerbeacon.com/en/job/1531232/office-of-the-auditor-general-bureau-du-verificateur-general/performance-financial-auditors/fredericton

Date:  March 19, 2019

Source:  cbc.ca

Link: https://www.cbc.ca/news/canada/new-brunswick/budget-boost-1million-auditor-general-1.5063220h

Discussion points:   

1) How would feel about an auditing career with an auditor general’s office? Have you considered that as an option?

2) If you were the auditor general, how would spend this extra $1 million?

3) Chapter 14 in Wiley’s Financial Accounting: Tools for Business Decision-Making talks about the big subject of performance measurement, but is largely directed towards for-profit enterprises. How could you measure the Office’s performance or success in spending an extra $1 million in the public sector?

Taking on Airbnb

Posted by & filed under eCommerce.

Description:  An Alberta resident, David Jackel, has taken on Airbnb and won. Jackel had planned a Mexican holiday that included five weeks at a condo rented through Airbnb. But even though he had arranged the rental six months before his vacation, with just a scant three days to go before check-in, the online giant pulled the plug on the reservation. They did offer a couple of other properties, but neither were what Jackel was after. Jackel booked other lodging, leaving him about $6,400 over budget for his dream trip. After months of back and forth between the company and Mr. Jackel, Marketplace, a CBC consumer affairs program, put in a call to Airbnb on his behalf. Within a very short time, Jackel received good news that a refund was on the way.

Date:  March 22, 2019

Source:  cbc.ca

Link: https://www.cbc.ca/news/business/airbnb-last-minute-cancellations-marketplace-1.5065309

Discussion points:   

1) Have you ever faced a last-minute cancellation from Airbnb or a similar service? What happened?

2) In this situation we saw a refund shortly after the CBC Marketplace program made the inquiry. Do you think the two events are related?

3) Chapter 9 In Wiley’s Financial Accounting: Tools for Business Decision-Making talks about the value of a trademark like Airbnb. Do you think the Marketplace publicity could impact the trademark’s value?

Deficit still there

Posted by & filed under Canadian Economy, Canadian Government.

Description:    This past week our federal government introduced its budget for the next fiscal year. There were some interesting initiatives, including a possible grant to first-time home-owners from the Canada Mortgage and Housing Corporation and some early steps towards a national pharmacare program. But what wasn’t there is also quite interesting: the government is planning a deficit for this year and the next several, in contrast an earlier promise to return to surpluses before this fall’s election.

Date:  March 22, 2019

Source:  globalnews.ca

Link: https://globalnews.ca/news/5075888/federal-budget-2019-cmhc-shared-equity-mortgage/

Discussion points:   

1) Have you discussed the federal budget in any of your classes?

2) What is your opinion about deficit financing?

3) Chapter 7 in Wiley’s Financial Accounting: Tools for Business Decision-Making talks about cash budgeting and planning major expenditures. What might be some of the challenges you would have if you were planning the cash budgets for the federal government?

The college entrance scam

Posted by & filed under Ethics, Student life.

Description:   Did you hear the news this past week about the college entrance scam? About 50 people – including an Academy Award nominee – were arrested in the United States for their roles in gaming the admissions system at elite schools, all with the aid of William Rick Singer. Singer, in exchange for healthy sums of cash, helped the students get into top schools by either cheating on entrance tests like the SATs or by getting sport coaches to declare that the prospective students were athletic recruits. The parents could then claim their payments to Singer as tax deductions since the cash was funnelled through a so-called charitable foundation.

Date:  March 13, 2019

Source:  cnn.com

Link: https://www.cnn.com/2019/03/12/us/college-admissions-scheme-how-it-worked/index.html

Discussion points:   

1) How would feel if you found out your parents had gamed the admissions process to get you into college?

2) In an ethics case we often discuss “stakeholders.” Which stakeholders have been impacted adversely by this situation?

3) The feature story at the start of Chapter 4 in Wiley’s Financial Accounting: Tools for Business Decision-Making talks about the work of Controller Carter Scott at Western University in London, Ontario. Are there any controls a Canadian university could establish to prevent or detect such a fraud?

Credit card myths

Posted by & filed under Financial Reporting and Analysis.

Description:   Debt on your credit cards can be a common way to sink your financial plan. But university students are often targeted by those marketing credit cards. If you want to use this form of credit – and its pretty hard to avoid it in our time – you should know some common myths about this way of borrowing. Myth number one, as the story says: “A lender will only lend me what I can afford to repay”

Date:  March 11, 2019

Source:  theprovince.com

Link: https://theprovince.com/opinion/columnists/myths-about-debt-payments-debunked-and-explained

Discussion points:   

1) Have you picked up a credit card since you have started university?

2) Which of the “myths” surprised you the most? Why?

3) Page 413 in Wiley’s Financial Accounting: Tools for Business Decision-Making has feature story on Canadian Tire. Read through this story to determine where credit cards rank in the composition of Canadian Tire’s accounts receivable.