Publications

May 2015 (Revised September 2017)
Case

Generating Higher Value at IBM (A)

By: Benjamin C. Esty and E. Scott Mayfield

This case analyzes IBM's financial performance and its capital allocation decisions over a 10-year period from 2004-2013, during which IBM returned more than $140B to shareholders through a combination of dividends and share repurchases. During this time, CEO Sam... View Details

Keywords: Dividends; Share Repurchases; Earnings Guidance; Financial Statement Analysis; Financial Ratios; Payout Policy; Earnings Per Share (EPS); Earnings Management; Change Management; Leadership; Transformation; Financial Strategy

January 2015 (Revised October 2018)
Case

Dogs of the Dow

By: Malcolm Baker, Samuel G. Hanson and James Weber

This case describes the Dogs of the Dow investment strategy, value investing, and using dividend yields as a means to determine intrinsic value. It also describes exchange traded notes and a particular exchange traded note, known as the Dogs of the Dow, which tracks... View Details

Keywords: Dow Jones; Dow Jones Industrial Average; Exchange Traded Note; Exchange Traded Fund; Value Investing; Benjamin Graham; Investment Strategy; Dividend Yield; Intrinsic Value; Dividend Discount Model; Michael O'Higgins; Financial Instruments; Investment; Strategy; Financial Services Industry; United States

December 2014
Article

Market Competition, Earnings Management, and Persistence in Accounting Profitability Around the World

By: Paul M. Healy, George Serafeim, Suraj Srinivasan and Gwen Yu

We examine how cross-country differences in product, capital, and labor market competition, and earnings management affect mean reversion in accounting return on assets. Using a sample of 48,465 unique firms from 49 countries, we find that accounting returns mean... View Details

Keywords: Corporate Performance; Valuation; Equity Valuation; Persistence; Competitive Advantage; Institutions; Earnings Management; Labor Market; Capital Markets; Competition; Profit; Performance; Supply and Industry; Financial Statements; Government and Politics; Globalized Markets and Industries

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May 2014
Case

Groupon, Inc.

By: Krishna G. Palepu, Blythe J. McGarvie and James Weber

Internet coupon site "Groupon" grew revenues rapidly and went public, but struggled to impress investors or operate profitably. Did it have a sustainable business model? Groupon sold coupons called Groupons which purchasers used to acquire goods or services at... View Details

Keywords: Accounting; Corporate Governance; Entrepreneurship; Financial Management; Financial Reporting; Financial Statements; Organizational Culture; Strategy; Web Services Industry; United States

January 2014 (Revised January 2014)
Case

Showdown at Cracker Barrel

By: Suraj Srinivasan and Tim Gray

In the fall of 2011, activist investor, Sardar Biglari, has acquired nearly 10% ownership in the Cracker Barrel restaurant chain. He believes that the board and senior management have failed and the company has underperformed relative to its peers. When he is denied a... View Details

October 2013
Supplement

Alcoa's Bid for Alcan (B)

By: Paul Healy and Penelope Rossano

In spring 2007, Alcoa CEO Alain Belda was concerned about the company's market position in light of increased competition from developing markets. China's recent entry into the aluminum market was affecting both supply and demand. Furthermore, downstream and upstream... View Details

Keywords: Strategy; Acquisitions; Alcoa; Alcan; Rio Tinto; Aluminum Industry; Accounting; Financial Analysis; Consolidation; Market Participation; Financial Statements; Acquisition; Mining; Mining Industry; Canada; United States

October 2013 (Revised December 2015)
Case

Alcoa's Bid for Alcan (A)

By: Paul Healy and Penelope Rossano

In spring 2007, Alcoa CEO Alain Belda was concerned about the company's market position in light of increased competition from developing markets. China's recent entry into the aluminum market was affecting both supply and demand. Furthermore, downstream and upstream... View Details

Keywords: Acquisitions; Strategy; Aluminum; Accounting; Financials; Alcoa; Rio Tinto; Alcan; Metals and Minerals; Competition; Consolidation; Emerging Markets; Acquisition; Financial Statements; Manufacturing Industry; Canada; China; Russia

September 2013
Teaching Note

The Case of the Unidentified Industries—2013

By: Mihir A. Desai, William E. Fruhan, Jr. and Elizabeth A. Meyer

Helps students to understand how the characteristics of a business are reflected in its financial statements. This case consists of an exercise in which students are given balance sheet data in percentage form and other selected financial data for companies in 14... View Details

Keywords: Financial Management; Accounting Statements; Ratio Analysis; Financial Statements; Finance

September 2013
Case

The Case of the Unidentified Industries—2013

By: Mihir A. Desai, William E. Fruhan Jr. and Elizabeth A. Meyer

Helps students to understand how the characteristics of a business are reflected in its financial statements. This case consists of an exercise in which students are given balance sheet data in percentage form and other selected financial data for companies in 14... View Details

Keywords: Financial Management; Accounting Statements; Ratio Analysis; Financial Statements; Finance

May 2013
Teaching Note

Coca-Cola: Residual Income Valuation

By: Suraj Srinivasan and Edward J. Riedl

Teaching note for a case of the same title that introduces students to the residual income (also known as the abnormal earnings) valuation model using the firm Coca-Cola. Students are provided with the primary financial statements (through fiscal 2010) and forecast... View Details

Keywords: Valuation; United States

March 2013
Case

NovaStar Financial: A Short Seller's Battle

By: Suraj Srinivasan and Amy Kaser

The NovaStar case describes the challenges faced by short seller Marc Cohodes of hedge fund Rocker Partners as he tried to expose what he thought was widespread fraud in mortgage lender NovaStar Financial. The case is set in the time period from 2001 to 2007 and tracks... View Details

February 2013 (Revised June 2017)
Case

Project Sun Devil and Project Paris

By: Nori Gerardo Lietz

Tony Lee is preparing to present a project to the investment committee of Howard Street Capital. He will be recommending an investment in Project Sun Devil, a high-quality 225-unit student housing rental property near Tempe, Arizona. Tony Lee will compete for capital... View Details

Keywords: General Management; Financial Analysis; Return On Assets; Accounting; Performance Measurement; Financial Ratios; Return On Equity; Financial Statements; Profitability Analysis; Portfolio Investment; Portfolio Management; Real Estate; Property; Investment Portfolio; Investment Return; Real Estate Industry; United States

February 2013
Case

Diamond Foods, Inc.

By: Suraj Srinivasan and Tim Gray

The Diamonds Foods, Inc. case describes the major accounting blow up at the company in late 2011 that was triggered by a report by Off Wall Street, a prominent short selling research firm. Diamond Foods, a high flying growth company in 2011, grew from a walnut farmers'... View Details

January 2013 (Revised August 2013)
Case

First Solar: CFRA's Accounting Quality Concerns

By: Suraj Srinivasan and Ian McKown Cornell

The case relates to accounting quality analysis conducted by the leading research firm Center for Financial Research and Analysis (CFRA) on companies in the solar industry with a focus on First Solar Inc. In 2009, CFRA was concerned that First Solar, like much of the... View Details

Keywords: Accounting; Accounting Quality; Financial Accounting; Financial Statement Analysis; Accounting Fraud; Accounting Red Flags; Accounting Scandal; Risk and Uncertainty; Quality; Earnings Management; Valuation; Crime and Corruption; Financial Statements; Energy Sources; Green Technology Industry; Accounting Industry; Energy Industry

January 2013
Case

Luotang Power: Variances Explained

By: Robert Simons and Craig Chapman

The general manager of Luotang Power, a coal-fired power plant located in central China, reviews annual results before a meeting with the board of directors. He thought the company performed well during the year and both plant availability and fuel economy had improved... View Details

Keywords: China; Financial Statements; Management Accounting; Variance Analysis; Environmental Regulations; Incentives; Electric Power Generation; Contracts; Valuation; Energy Generation; Accounting; Performance Evaluation; Energy Industry; China

2013
Book

Business Analysis and Valuation: Using Financial Statements, Text and Cases

By: Krishna G. Palepu and Paul M. Healy

This book provides a framework for business analysis and has been used by business schools throughout the world. It provides a foundation for analysis using four key steps: 1) Strategy analysis: Identifying a firm's strategy and understanding sources of its competitive... View Details

Keywords: Governance; Debt Securities; Valuation; Performance Evaluation; Financial Statements; Credit; Business Ventures; Strategy; Financial Condition; Mergers and Acquisitions; Forecasting and Prediction

December 2012
Case

Coca-Cola: Residual Income Valuation

By: Suraj Srinivasan, Beiting Cheng and Edward J. Riedl

The case illustrates the use of the residual income (also known as the abnormal earnings) valuation approach. Students are asked to provide a valuation of Coca-Cola Company using the residual income valuation methodology and understand how it maps into the discounted... View Details

Keywords: Business Earnings; Valuation; Financial Statements; Equity; Food and Beverage Industry

December 2012
Case

Trouble Brewing for Green Mountain Coffee Roasters

By: Suraj Srinivasan and Michael Norris

In October 2011, noted hedge fund manager David Einhorn of Greenlight Capital delivered a presentation at an investors' conference analyzing the business and accounting quality weaknesses of Green Mountain Coffee Roasters. Until then Green Mountain had exhibited rapid... View Details

November 2012
Exercise

Coca-Cola: Residual Income Valuation Exercise

By: Suraj Srinivasan

The exercise illustrates the use of the residual income (also known as the abnormal earnings) valuation approach. Students are asked to provide a valuation of Coca-Cola Company using the residual income valuation methodology and understand how it maps into the... View Details

Keywords: Business Analysis; Valuation; Residual Income Valuation; Accounting; Financial Accounting; Financial Analysis; Financial Statement Analysis; Financial Statements; Discounted Cash Flows