Best Buy is struggling to thrive (and some would say it is even struggling to survive) as it competes with online giant Amazon.com. According to a recent article in Forbes, one way Best Buy is aiming to improve its financial outlook is to cut its cost of goods sold through supply chain efficiency gains. Questions […]
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How does automated technology in fast food restaurants change the cost structure, break even, and degree of operating leverage?
June 18, 2014 
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Change is rapidly occurring in the restaurant industry due to a combination of higher labor costs, increased technological capabilities, and other factors. Protesters across the world are calling for fast food restaurants to raise their wages, arguing that the current wages paid to workers are not enough to survive on. Various states and cities have […]
Continue readingIf Quiznos’ debts are discharged in bankruptcy, how do its creditors account for the effect of the bankruptcy?
June 2, 2014 0 Comments
The sandwich chain Quiznos has filed for Chapter 11 bankruptcy protection, which will allow it to continue operating while it works out a debt-restructuring plan with creditors. Senior lenders would receive equity in exchange for the debt. On the other hand, some junior creditors may not get paid the monies due to them from Quiznos. […]
Continue readingAre the costs of owning a car fixed, variable, or mixed?
May 29, 2014 0 Comments
According to a recent news article in the Wall Street Journal (“Mercedes or Ford, It Costs a Lot More Than You Think,” Wall Street Journal, Sunday Journal, March 15, 2014), the average consumer spends more than $760 a month on his/her vehicle and related expenses. Purchase price of the car Finance charges on […]
Continue readingWhat is the balance sheet impact of Delta’s improvements to its LAX Terminal 5?
May 27, 2014 0 Comments
Delta Air Lines is partnering with the City of Los Angeles and Los Angeles World Airports (LAWA) to overhaul Terminal 5 at Los Angeles International Airport (LAX) for a total estimated cost of $240 million. The project is expected to start in 2015. Delta is contributing $12 million for check-in and lounge improvements and the […]
Continue readingHow will a stock split impact Under Armour’s stockholders’ equity?
May 23, 2014 0 Comments
On March 17, 2014, Under Armour, a company selling sports clothing, shoes, and accessories, announced a two-for-one stock split (see Under Armour press release dated March 17, 2014). Here is an excerpt from the Under Armour press release: “Baltimore, MD (March 17, 2014) – Under Armour, Inc. (NYSE: UA) today announced that its Board of Directors […]
Continue readingHow will cutting 18 months off the life of its Celebrex patent impact Pfizer’s profits?
May 20, 2014 0 Comments
Pfizer, headquartered in New York City, is one of the world’s largest pharmaceutical companies (as measured by revenues.) It holds patents on many of the drugs it manufactures. One of these patents gives Pfizer the exclusive right to market the painkiller, Celebrex. (Celebrex generated $1.9 billion in revenue in 2013.) In a recent patent ruling, […]
Continue readingHow will selling more trucks than cars affect automobile manufacturers’ profits?
May 16, 2014 0 Comments
According to a recent article in USA Today (“Crossovers, trucks beating cars in sales,” Alisa Priddle, Detroit Free Press, March 16, 2014), the sales mix for automobile manufacturers such as Ford and GM has shifted to a ratio of approximately 47% cars and 53% trucks. “Trucks” includes light trucks, crossovers, and SUVs. In 1980, cars […]
Continue readingWhat are the direct and indirect costs involved with manufacturing Oscars?
May 12, 2014 0 Comments
The Academy Awards is an annual American awards ceremony honoring achievements in the film industry. Winners receive a statue officially named the “Academy Award of Merit.” However, these statues are much better known by the nickname of “Oscars.” Each Oscar statue weighs 8.5 pounds and takes three to four weeks to manufacture. The statues have […]
Continue readingWhat are the characteristics of the $2 billion in bonds that Tesla Motors is issuing?
May 7, 2014 0 Comments
Tesla Motors, Inc., is an American company that designs, manufactures, and sells electric cars and components. It is publicly traded on the NASDAQ under the symbol TSLA. Tesla has plans to build a $4 to $5 billion battery production plant beginning in 2017. To help to pay for the new manufacturing facility, Tesla is issuing […]
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