Description: 3G Capital Management, the Brazilian firm that purchased Tim Hortons, is now turning its attention to Burger King. 3G has prided itself in seeking improvements in other operations such as Kraft Foods, Tim Hortons and Heinz. Now it is turning its attention to helping Burger King’s performance in Canada catch up with rivals McDonalds, A&W, Wendy’s and Dairy Queen.
Date: November 8, 2016; update November 9, 2016
1) Were you surprised to see where Burger King ranked among its competitors in Canada?
2) What might be some strategy moves 3G could make to grow Burger King’s presence in Canada?
3) The article mentioned 3G’s cost cutting focus. What might be some managerial accounting tools that a restaurant chain could use to better control costs?
Description: With worldwide business interests that could be impacted by his policy choices, Donald Trump’s presidency raises a broad range of potential conflicts of interest. Some suggest it’s an ethical minefield. And, perhaps surprisingly, there is no law preventing a sitting president from maintaining all of these outside business interests while sitting in the White House.
Date: November 9, 2016
1) What surprised you most about this article?
2) Do you think there should be a law dealing with how a president handles their own business interests while in office? If so, what would such a law say?
3) Wiley’s Auditing: A Practical Approach discusses how auditors use the five threats to independence to evaluate their own independence prior to each engagement. Which of these threats might be most applicable to the President-elect’s conflicts of interest?
Description: Canadian Tire is cutting its capital expenditures for 2017 as it shifts its strategic focus to online sales and away from bricks and mortar. Part of this strategy will see Canadian Tire placing increased reliance on private label brands like its Mastercraft tools. Meanwhile, investors seem to like Canadian Tire’s performance as earnings per share beat the estimates of the analysts.
Date: November 10, 2016
1) What do you think of Canadian Tire’s plans to emphasize e-commerce?
2) Chapter 8 of Wiley’s Financial Accounting: Tools for Business Decision Making discusses Canadian Tire’s management of its accounts receivable. What do you think might change about its receivables as it moves towards more e-commerce?
3) Where in Wiley’s Financial Accounting: Tools for Business Decision Making can you learn about earnings per share? What does this ratio indicate?
Description: Coffee chain Second Cup may be looking for a buyer. It is revising its strategic plan in which it had targeted opening up to 85 new stores by 2018. With sales down 1.2 per cent this year, Second Cup might have trouble meeting an upcoming debt payment. But there are a couple of potential buyers who may Second Cup it as an attractive option despite these weaknesses.
Date: October 31, 2016
1) What strategies might Second Cup look at in addition to seeking a buyer?
2) Wiley’s Financial Accounting: Tools for Business Decision Making discusses Tim Horton’s in the opening vignette of Chapter 11. How do the results of Tim Horton’s discussed in the vignette compare to those of Second Cup?
3) What would be some of the key accounting issues that a company acquiring Second Cup would have to deal with?
Description: Despite increasing competition from newer low fare airlines such as NewLeaf Travel Co. Inc. and Canada Jetlines Ltd., Westjet Airlines reported third quarter earnings of $116 million this week. Westjet intends to continue its strategy of being a low cost provider in the face of this competition. The airline also noted it is looking to acquire more wide-body jets to support its new routes between Canada and Europe.
Date: November 1, 2016
1) What did you learn about the airline industry from this article?
2) Chapter 9 of Wiley’s Financial Accounting: Tools for Business Decision Making discusses Westjet’s strategy for the airplanes in its fleet. What are the the two methods it uses?
3) What are some of the key costs that the airline industry has to control in order to be successful?
Description: Last week’s Wiley Weekly Accounting Updates featured a story on job churn: a concept voiced by the Finance Minister Bill Morneau to discuss the world of vanishing permanent jobs. And certainly one cause of job churn has been the so-called gig economy, where businesses like Uber maintain tall those drivers picking up passengers under the Uber app are independent contractors. A tribunal in London though isn’t buying Uber’s story. In ruling that Uber drivers are indeed employees, the tribunal said “The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our minds faintly ridiculous.”
Date: November 3, 2016
1) Have you ever used Uber? Do you know any Uber drivers?
2) What is your opinion of this decision made by the tribunal?
3) What do you think about the author’s suggestion that the gig economy should be called the puppet economy?
Description: What do you really need to know about job churn? This concept of job churn sounds a bit unpleasant – and indeed it is. Young Canadians are facing increased job insecurity, with jobs offering any sense of permanency fading from the scene. Part time work and jobs with no benefits are a new normal. About 40 percent of Canadians between ages 21 and 29 are still living with parents, up from 27 percent 30 years ago.
Date: October 28, 2016
1) Have you heard of this concept of job churn? Are you concerned about it?
2) What does the future look like for the graduating class at your university?
3) Why do we have job churn and uncertain futures for our educated youth in a rich democracy like Canada?
Description: How about those co-op placements? Universities and community colleges have been offering them in various forms as the discussion of experiential learning enters the common vocabulary. Everything isn’t always rosy with co-op placements though. Unpaid service and uncertain legal status may be some of the downsides on these attempts to provide students with practical experience.
Date: October 27, 2016
1) Have you ever had a co-op experience? What was it like?
2) Do you think a co-op placement is an effective way to gain experience towards an accounting career?
3) What do you think that colleges and universities could do to improve co-op placements?
Description: Cooperation between governments is a good thing. And in Atlantic Canada, the four provinces have cooperated for years as shareholders in one gambling organization, the Atlantic Lottery Corporation (ALC). This week, however, an audit report issued by the four auditors general of the Atlantic provinces concluded that the four provinces need to do a better job in governing ALC. One symptom of this weak governance has been very healthy increases in executive salaries without shareholder oversight.
Date: October 26, 2016
Extended radio interview portion @:
1) What were your impressions from reading this story or listening to the two interviews on the ethics of the giveaways?
2) How do you think the four provinces could work together to improve the way the organization is governed?
3) What might be some of the challenges four different audit offices would face in working together to carry out one audit?
Description: Bombardier announced this week that it’s cutting about 10% of its workforce. This is around 7,500 jobs in total, with about 2,000 or so of those at home here in Canada. CEO Alain Bellemare cited competitive pressures as prompting these cuts. Two-thirds of this latest round of layoffs will hit Bombardier’s rail division.
Date: October 21, 2016
1) What role do you think the chief financial officer at Bombardier would have played in the CEO’s decision to cut staff?
2) How would Bombardier account for the costs associated with terminating this large group of employees?
3) The article notes that Mr. Bellemare wants to improve Bombardier’s cash flow. What are some of the ways an organization can use to better manage its cash? (Hint: See Chapter 7 of Wiley’s Financial Accounting: Tools for Business Decision Making)