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The learning outcomes are as follows: to be able to evaluate early warning signs/red flags through financial statement analysis; to be able to analyse company’s credit or debt servicing using a thorough process of fundamental analysis; to be able to analyse and decode the financial health of an organization through different financial tools applicable according to the industry such as default probability and financial ratios; and to be able to synthesize credit rating framework and role of credit rating agencies in the bond market.

In late January 2019, the allegation by an online investigative portal about the misuse of the Dewan Housing Finance Corporation Ltd. (DHFL) money by its promoter for buying asset abroad was the start of the fall of the non-banking finance company giant. This was followed by a series of downgrade by credit rating agencies on its debt and eventual default on its interest payment on 4 June 2019 which upset multiple portfolio investors and the regulators. Investors became sceptical about the regulator’s policy and inefficiencies of credit rating agencies in predicting the default along with asset management houses which were expected to guard investors’ interest. One investor, Shikhar Pachori, decided to scrutinize all hidden information on DHFL to investigate if DHFL crisis arises because of unknown factors which was not in control of management or if it a clear negligence on the part of all involved parties. The case tries to emphasize the aspect of Asset-Liability Management and process of credit analysis while looking for red flags which aids in identifying any stress in company’s financial or any potential default by company.

This case can be used in the advance level of post-graduate finance course or MBA program for elective/specialization courses such as Financial Statement Analysis, Financial Institutions and Market and Fixed Income.

Teaching notes are available for educators only.

CSS 1: Accounting and Finance

Fixed Income markets, Financial Markets and Institutions.

This case can be used in a postgraduate finance course such as an MBA and executive program for courses such as Fixed Income Markets and Financial Markets and Institutions.

In late August 2015, the sudden downgrade and eventual default of Amtek AUTO Ltd (Amtek) on its debentures upset mutual fund investors and regulators. Questions were raised about the credit rating agencies and their lack of timely action as well as about the independent credit analysis followed by fund houses to protect the interests of investors. One such investor, Suresh Nair, decided to gather all possible available information on Amtek to determine whether it was sheer negligence on the part of all parties involved or if Amtek was in fact in a situation of sudden distress. The case seeks to highlight the credit analysis process, while looking out for red flags to identify potential default or financial stress in a company.

To understand the credit analysis process through a fundamental analysis process. To analyze and interpret the financial position of the company through various financial ratios. Identifying “red flags” while evaluating a potential credit that pose as “risks” to credit assessment. Understanding the role and relevance of credit rating agencies in the bond market.

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CSS 1: Accounting and Finance

This case involves a real-life Ponzi scheme perpetrated by Sir Allen Stanford, a man who bribed Antiguan regulators and a certified public accountant firm to perpetuate his scam. The case includes the process of making victims whole, which involves a court-initiated clawback process: taking back payouts to investors or charities to redistribute the funds to other fraud victims who did not receive their fair payout. Students apply theory learned in an upper-level fraud or forensic accounting course. Finally, the case addresses the aftermath of a fraud scheme.

Ponzi schemes – one of the most common types of investment fraud – have caused investors to lose billions of dollars. Because of the prevalence of Ponzi schemes and the ramifications to investors, it is important for business students to understand the nature of these schemes and to learn how to recognize them. As future business professionals, students will be charged with recognizing a Ponzi scheme early and uncovering it before investors lose their investments.

This case is designed for upper-level undergraduate students or graduate students taking a fraud or forensic accounting course, which is best introduced after professors cover Ponzi schemes and also these concepts: fraud triangle, fraud diamond and fraud red flags.

We obtained information on China Gerui from secondary published sources, including annual reports downloaded from the Securities and Exchange Commission’s (SEC) EDGAR database, news sites and newspapers, the company’s website and journal articles. One of the authors visited the China Gerui plant in Henan, China.

China Gerui, a Chinese metal fabrication company, enjoyed exponential growth because of its location, product innovation and ability to move up the value chain. At the height of its success, the company listed on the Nasdaq and had plans to raise capital to fund ambitious expansion plans. Unfortunately, four years after listing on Nasdaq, the company received a letter from the listing qualifications department notifying China Gerui that they were not in compliance with Nasdaq’s filing requirements because it had not filed its Form 20-F. Now, the company had only five days to decide whether to request an appeal of the letter.

This case is best suited for higher-level undergraduate accounting and finance courses such as intermediate accounting, auditing, international accounting, financial statement analysis, corporate finance and investments analysis. It is especially appropriate for graduate-level global accounting and advanced financial statement analysis courses. In these courses, the best placement is after coverage of SEC regulations and requirements for financial statement reporting and disclosure. Moreover, the case may be used as a tool to demonstrate the step-by-step process for searching and retrieving information from a public company’s filings through the SEC’s EDGAR database.

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

The case concerns a real $25 million program consisting of nine concurrent projects to deliver and implement a custom-built in-store customer relationship management (CRM) system and a new point-of-sale system in 400 stores of a national retail chain. The name of the company has been disguised for confidentiality reasons. Once deployed, the new system should give Clothes ‘R’ Us a significant strategic advantage over competitors in the marketplace; it will increase in-store manager productivity, cut costs, and ultimately drive increased sales for the retail chain. The program is in crisis, however, because the product managers have just left to join a competitor. The explicit details of the program are given, including examples of best practice program governance and the real activity network diagram for the program. Detailed Excel spreadsheets are also provided with the actual earned value data for the program. Students analyze the spreadsheets and the data given in the case to diagnose the impact of the most recent risk event and past risk events that occurred in the program. Ultimately students must answer the essential executive questions: What is wrong with the program? How should it be fixed, and what is the impact in time and money to the program? In addition, qualitative warning signs are given throughout the case—these warning signs are red flags to executives for early proactive intervention in troubled projects.

The goal of the case is to teach complex program oversight. Students analyze actual earned value data for a real $25 million program consisting of nine concurrent programs and assess the impact of risk events as they occur in the program. A key takeaway of the case is that relatively simple tools (Excel spreadsheets and time tracking) combined with good project planning can be used to effectively control very complex projects. Students also learn the qualitative warning signs within programs that can serve as early indicators of problems.

After completion of the case study, the students will be able to understand the calculation of cost of individual sources of funds and cost of capital, examine various tools such as economic value added and cash value added analyses which help determining whether a company has added value to its shareholders or not and explore the application of Benford’s law and the Beneish M-score in detecting manipulation of numbers in financial statements.

Nimmy Jacob, a newly recruited research analyst with an equity research firm, was entrusted with tracking the “auto ancillary industry”, specifically “Minda Corporation Ltd” (MIL). MIL was a leading diversified auto components manufacturing companies in India. The company’s share price meteorically rose during February 2021–2022 (Figure 1). The company’s turnover over the past few years had grown at a compounded annual growth rate of 15% during the three preceding years. The company had in the recent past bought a 15% stake in another competitor, Pricol Ltd, for a consideration of INR 400 crores and previously had used joint ventures and acquisitions to scale up its operations. Jacob, apart from the conventional financial analysis, had to ascertain whether all the strategic decisions were adding value to the shareholders’ investments by exploring the various tools available for the same and also calculate the minimum expected rate of return for MIL. Jacob was apprehensive about the financial statements, although the numbers for the company were good. Jacob was skeptical about a high-growth company having the incentive to manipulate its earnings. Manipulations could be in the form of abnormal increase in accruals, inconsistency in expenses and high days of receivables. Therefore, Jacobs used certain analytics/statistical tools to detect any manipulation of numbers in the financial statements of the company and to ascertain apt findings about the company.

This case study is intended for discussion in corporate finance, financial reporting and analysis and financial analytics at Master of Business Administration/undergraduate level.

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CSS1: Accounting and finance

The learning outcomes of this paper are as follows: to understand the language of accounting, to interpret financial statements to understand beyond what’s reported and to predict the financial health of a company before it is too late.

The case revolves around the Indian coffee retail giant - Café Coffee Day (hereafter, CCD). Coffee Day Global Limited of which CCD is a part, is the largest producer of Arabica beans in India. The case goes on to discuss the life and profile of VG Siddhartha (hereafter, VGS), whose leadership and farsightedness made coffee a household name in India, traditionally a tea-drinking country. Within just a year or two after its Initial Public Offering in November 2015, the company’s financial and legal troubles began to surface. The worst blow came when VGS, the 60-year-old founder and CEO committed suicide on July 29, 2019. His group’s mounting debt and impending doom had propelled him to take his own life. Today, the future of CCD remains hanging in the balance, with creditors ready and willing to take the firm into bankruptcy.

Under-graduates and above.

Teaching notes are available for educators only.

CSS 1: Accounting and Finance.

The case can be used in the subject areas of finance and in particular investments, corporate governance, ESG, or responsible investments. It is suitable for students from all financial backgrounds, from a novice in the financial markets to an expert in finance. It is, however, expected that the class should have a sound fundamental grounding in financial analysis and valuations. The purpose of this case is to prepare students for future investments they would make in whatever capacity – whether in private or listed companies – and to prepare them for future roles on boards of directors. The examples of real-life events in this case study are used to prepare students for future similar situations in which they might find themselves.

This teaching case is aimed at postgraduate students pursuing an MBA or a specialist Masters in a finance programme. This case can be used as a master class in corporate governance, investments, or responsible investments. This case is also suited for an executive education class in management. It is particularly relevant to a module that focusses on investments, corporate governance, ESG, or responsible investments.

The case study chronicles meetings held on 8 November 2017 at a fictional South African asset manager, Active Investment Management (AIM). These meetings discuss the firm's investment in JSE-listed Steinhoff International Holdings. The case deals with the questions that active fund managers need to address when balancing financial analysis; environmental, social, and governance (ESG) analysis; portfolio management; and the need to comply with their fiduciary duty to clients. It also looks at the need for responsible investing in decision-making.

The understanding of the assessment around the complexities of asset management when it comes to responsible investment.

To determine why institutional investors should apply responsible investment principles when making investment decisions.

An understanding of the evaluation of the unique roles of the three pillars of corporate governance, namely asset managers, auditors, and the board of directors.

The ability to assess how to integrate financial analysis and ESG principles in making investment recommendations.

This case illustrates the tax implications of a movie produced in a foreign country that resulted in a loss. Teaching opportunities include the application of tax rules to a Schedule C business loss and a resulting net operating loss (NOL) deduction, the consideration of hobby and passive activity losses, the tax treatment of funds received in a divorce settlement, and how an individual might handle a possible IRS examination. Students are asked to prepare a revised Form 1040 for the movie business loss and the individual NOL deduction based on evidence provided in the case. Sufficient information is provided in the case to identify audit “red flags” in a tax return. Using the tale of an actual movie production in a foreign country and its consequent tax implications can provide an attractive alternative to teaching tax accounting rules that are often considered by students as “dry”.