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The case can be taught in an introductory corporate finance course or to more experienced students or executives to spur a discussion about share repurchases and corporate financial strategies in general. If used in an introductory course, the case is most effective if preceded by a traditional dividend class. It follows a portfolio manager of Johnson & Associates, Mark Johnson, who is reviewing his holdings, including his position in AutoZone in early 2012. A prominent shareholder, Edward Lampert, had begun liquidating his position in AutoZone, and Johnson is concerned that Lampert's reduced position could lead the company to stop using share repurchases as a method of distributing cash flows to shareholders. The case lists a number of alternative uses for the cash flows and asks students to assume Johnson's role as an analyst and assess the likely impact of those alternatives on AutoZone's stock price.

After working through the case and assignment questions, the learning outcomes of this study are to understand the dividend policy of a company; compare different types of dividends that a company may give; assess the impact of stock splits and the issue of bonus shares (stock dividends); compare cash dividend and buy-backs as methods of cash distribution to shareholders; evaluate the methods of cash distribution that may be appropriate for the company; and assess the trade-off between long-term value creation and shareholder expectations.

This case study presents the dilemma faced by Partha DeSarkar, the executive director and global CEO of Hinduja Global Solutions (HGS) Limited, a leading business process management (BPM) company. The company would have surplus cash of about US$1.2bn from the selling of its health-care service businesses. The company planned to invest a part of this cashflow into the company’s future growth, with some of it distributed among its shareholders. This case study provides an excellent opportunity for students to determine the best method for rewarding the shareholders. It allows students to compare various cash distribution methods. Students can examine in detail the process involved, the quantum of distribution, tax implications, financial implications, fundraising flexibility and valuation impact of available options.

This case study is best suited for senior undergraduate- and graduate-level business school students in courses focusing on corporate finance, financial management, strategic management and investment banking.

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CSS: 1 Accounting and Finance

After completion of the case, students will be able to understand the following: how to understand financial statements, income statements and cash-flow statements with the help of ratios; understand the concept of shareholding pattern along with different entities, namely, non-promoters, foreign institutional investor, domestic institutional investor and others; financial ratio analysis with traditional DuPont and extended DuPont analysis; understand the differences between comparable firms; how to analysis return, risk, covariance, correlation, market risk and capital assets pricing model (CAPM) and how to suggest an appropriate investment strategy.

The case presents company background and financial statements of four companies listed under departmental stores in India, namely, Vmart retail, V2 retail, Avenue Supermarts (known as DMart) and future retail. Students are asked to determine, which company is performing better to make a recommendation for investment. Students learn the tools of financial ratio i.e. profitability, efficiency, liquidity and market-based ratio along with the traditional DuPont decomposition and the extended DuPont analysis. Students also learn how to measure stock return, standard deviation, covariance, correlation, market risk and CAPM.

This case is suitable for management accounting, financial analysis and security analysis and portfolio management courses at the post-graduate or graduate levels. The case can be used in similar courses such as in financial statement analysis courses or security analysis and portfolio management courses.

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CSS: 1 Accounting and finance.

Recognize the interest groups of the business as stakeholders and shareholders. Understand the role of strategic corporate social responsibility (CSR) in attaining competitive advantage for the firm. Apply the techniques of financial statement analysis such as common-sized financial statements and ratio analysis. Analyze the overall financial position of the company such as its liquidity, solvency and profitability position. Evaluate the appropriateness of various CSR activities given the size of the company, its business model and financial position. Create a suitable CSR policy draft incorporating the critical elements of a CSR policy that enables the firm to operationalize it and fulfill the disclosure norms.

The management of Ball Industry Limited (BIL) had overlooked the mandatory requirement of CSR policy formulation. The company had not yet spent anything on CSR since the regulation had come into force. The company’s financial position was not healthy. Still, it fell under the regulatory clause as a borderline case and must spend 2% of its average three years’ profit on CSR activities. The company had previously ignored the requirement of formally drafting a CSR policy and deciding about the actions it might want to carry out. Now that the regulator had started sending show-cause notices to several companies who had not yet begun CSR, BIL was under immense time pressure to draft its CSR policy and initiate the relevant CSR activities. Emily, the chief operating officer of BIL, was assigned the task of preparing the blueprint of the CSR policy of the company and made it available for discussion in the upcoming meeting. The task at hand was to formulate a sound CSR policy under the constrained financial state considering its strategic planning, including the SWOT analysis, competitive environment and the overall general market and economic conditions. She submitted that rather than a vanilla CSR activity, strategic CSR would support the firm to differentiate itself from competitors. She was struggling to formulate a CSR strategy that could achieve both economic and social goals.

The case will be most suitable for use in undergraduate and graduate courses.

Teaching notes are available for educators only.

CSS 1: Accounting and finance.

This case is an abridged version of UVA-F-1115. This version is intended for use with audiences requiring less source documentation than is available in the unabridged version. The teaching note, however, contains all the source documentation in an appendix.

The primary teaching objective is to discuss the capital raising efforts of a firm under financial distress. It also provides supporting data to calculate cost of capital, DuPont/modified DuPont values and Altman’s Z-Score that can appropriately be incorporated into the discussion. Case-B provides information and data of the company’s recent performance and to changes in bankruptcy law in India. Overall, this case study provides ample scope to discuss, understand and provide the solution to the following key corporate finance themes as follows: 1. Analyzing accounting statements and examine potential earnings quality issue. 2. Predicting default and bankruptcy using qualitative analysis, financial ratios, traditional and modified DuPont models and Altman’s Z score model. 3. Examining the capital raising efforts of a distressed firm, which has already defaulted on borrowings. 4. To explore the impact of changes in regulation on the turnaround efforts of the firm as well as on the promoters of the firm.

Since 2005, Amtek Auto moved at a breathtaking speed with the goal of reaching $10bn in sales, from the current level of about $1.2bn. The group had acquired more than a dozen companies spending about Rs.5,000cr. ($850m) during this period primarily through borrowed funds. However, the market and business expansion was not happening as expected. The company’s capacity utilization was just about 40% (approx.) during much of this period. The mounting fixed costs of operation and debt servicing grew to the level of unsustainability, led the firm to default on its borrowing. Now the company had to quickly recapitalize itself to run its operations and retain the premier position in auto component industry. The company and its promoters were considering various methods of debt restructuring, asset sale and further equity infusion.

Introductory and elective level corporate finance.

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CSS 1: Accounting and Finance.

Supply chain management and particularly the significance of vendors as a strategic decision making tool.

The case is suitable for use in the following courses: MBA programs with specialisation in operations management where it can be used to teach students the significance of vendor selection and vendor rating in supply chain management (SCM); marketing research in management where it can be used to highlight the concept of multi attribute utility theory (MAUT) and its application; advanced statistics for multi criteria decision making (MCDM); and MBA/post graduate programs in management in strategic management where it can be used to introduce the concept of SWOT analysis and Porter's five forces model. An understanding of business process improvement will enable students get a comprehensive view about the case.

This case showcases the concepts of MCDM and SCM in manufacturing industry. The company wanted to select vendors and rate them in each category of raw materials in order to have a competitive advantage over competitors. Since there are multiple attributes (often contradictory in nature) based on which the vendors would be selected Kaul, Vice-President, Commercial uses multi-attribute utility theory (MAUT) to help solve the problem. The case has implications for manufacturing industry in selecting vendors to meet a raw materials need.

The case can be used to understand management concepts such as market research, supply chain management and multi criteria decision making. It can be used to: teach complexities involved in identifying attributes for vendor selection and vendor rating; help understand supply chain management in business process improvement; help students understand the application of MCDM; and help MBA students studying marketing research. The case will also be useful to students in understanding the application of MCDM in operations management. Some knowledge about cigarette manufacturing will help students to realize the depth of the case.

Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.