HARNISCHFEGER CORPORATION CASE STUDY SOLUTION PDF

View Homework Help – Harnischferger Case from ACG at Florida International University. Harnischfeger Corporation 1. Describe clearly the accounting. Agenda Case Facts Strategy Analysis Accounting Analysis. Directions Read the “Harnischfeger Corp” case study and answer the following questions. Submit your completed assignment no later than the last day of Week .

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Harnischfeger Corporation – ppt video online download

The changes in accounting for depreciation were made to conform the Corporation’s 17 This document is authorized for use only by Yishan Luo in Financial Statement Analysis taught by Allen Hartt, University of New Hampshire from October to March The Deficit Reduction Act of Domestic and foreign income loss before provides for such income to become income tax effects was as follows in nontaxable effective December 31, The company expected such automated storage and retrieval systems to play an increasingly important role in the “factory of the future.

They need to stop playing with accounting methods and hiding the true story otherwise they will be in danger to not survive in a long run. Further the substantial reduction in expense regarding the retirement plan will Pension Gain and rate of return Components of Pension Expense: Underlying all the accounting changes was a reporting philosophy outlined by the then chief financial officer and the current president of the company: Also, the company continued to liberalize its financial reporting policies.

For stock prices to reflect reality in an unbiased manner, it is not necessary that everyone in the market has to process the information correctly.

The instructor should ask the class to identify the latter-type decisions among the above. I feel that the financial reporting should help rather than hinder the implementation of our operating trategy.

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Harnischfeger Corporation Report of Independent Accountants Price Waterhouse Milwaukee, Wisconsin November 29, To the Directors and Shareholders of Harnischfeger Corporation In our opinion, the financial statements, which appear on pages 18 to 34 of this report, present fairly the consolidated financial position of Harnischfeger Corporation and its subsidiaries at October 31, andand the results of their operations and the changes in their financial position for each of the three years in the period ended October 31,in conformity with generally accepted accounting principles consistently applied during the period except for the change, with which we concur, in the method of accounting for depreciation expense as described in Note 2 of this report.

They wanted to make their financial statements look pretty so that investors would buy their stocks and suppliers would continue giving credit for being able to produce product and sell.

If debt covenants are specified in terms of accounting numbers, managers have an incentive to choose accounting policies to minimize the violation of the covenants. The plan consisted of four elements: The liquidation means selling of older inventory since the current sales are higher then current purchases then the liquidation will occur and as result any inventory not sold stduy previous periods must be liquidated.

It is to determine risk from the balance sheet Presented by: Changes in accounting policies and accounting estimates have a significant impact on reported profit.

Transactions in debt and capitalized lease obligations- Long-Term debt and capitalized lease obligations: In accounting there is no such thing as absolute truth.

The financial management of the company also seems to be sound.

ACFI case Harnischfeger Corporation | Zhou Zhu –

I am not sure whether people make the adjustments or not, but either way we wish to present an optimistic version of the picture and let people figure out what to do with the numbers. During the year we began products. They argue that there are some sophisticated analysts who could stucy the analysis that was done in the class.

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Equipment Construction Equipment Cost of Sales was equal to Published by Emma Collins Modified over 3 years ago. President To improve our future operating results, we restructured our three operating divisions into January 31, two groups.

To deal effectively with the financial crisis, Henry Harnischfeger, then chairman and chief executive officer of the company, created the position stud chief operating officer.

Change in the use LIFO liquidation in inventory valuation. Registration Forgot your password? How to Write a Summary of an Article? Summarize all the accounting changes Harnischfeger made inand their effects on pre-tax profits and cash flows in How much did the pre-tax income increase as a result of the changed ratio in ? Duffy Chairman of the Board and Chief Executive of United States Gypsum Company, manufacturer of building materials and products used in industrial processes, since Harnischfeger Corporation income tax provision, if applicable, in the year depreciation policy to those used by the related asset is placed in service.

Remember me on this computer.

Harnischfeger Corporation

On the balance sheet there is a decrease of inventory, due to liquidation. The instructor can sum up the class discussion on question 2 by mentioning the views of the management described above.

Prior toaccrued interest, which approximates market the Corporation used principally accelerated value. Also, profit margin dropped corporaton 1. Consequently, of substantially less than the U. Depreciation is a method that reduces the value of capital assets over time Switch from accelerated to straight line retroactively Revenues Less: Describe these changes as clearly as you can.