General Motors (GM) is considering a $37-million expansion to one of its Michigan assembly plants. The Buick Enclave, Chevrolet Traverse, and GMC Acadia crossovers are built at the Lansing Delta Township plant. GM officials have not announced what the $37-million expansion will include but they have applied for tax incentives from the City of Lansing […]
Continue readingHow does outfitting AMC movie theaters with recliners affect the company’s break even point and operating leverage?
July 18, 2014 
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AMC Entertainment Holdings Inc. is spending millions of dollars to install recliner-seating in its theaters. AMC Entertainment Holdings Inc. is outfitting about 1,800 of its nearly 3,000 auditoriums with recliners for a total cost of about $600 million. The recliners will remove up to two-thirds of the seating capacity in each theater, due to […]
Continue readingWhat is the impact on American Apparel’s current ratio of the loan it received from Standard General?
July 10, 2014 0 Comments
American Apparel has been in the news in recent weeks. Its board fired CEO Dov Charney amid several reports of his misdeeds. The company has also lost $270 million over the past three years. Last week, one of American Apparel’s creditors, Lion Capital, called a $10 million loan it had made to American Apparel. (“Calling” […]
Continue readingWhat are implications of Casella Waste Systems changing its year end from April 30 to December 31?
July 2, 2014 0 Comments
Casella Waste Systems, Inc., is a solid waste services company operating primarily in the eastern United States. Its fiscal year end has historically been April 30. In recent years, the region has experienced severe weather in the spring. The severe weather would drive down earnings for Casella in the last few months of its fiscal […]
Continue readingHow does cost cutting at Best Buy impact its ROI?
June 28, 2014 0 Comments
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 […]
Continue readingHow does automated technology in fast food restaurants change the cost structure, break even, and degree of operating leverage?
June 18, 2014 0 Comments
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 […]
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Accounting in the Headlines 