Presents an analysis of Harnischfeger’s quality of earnings, and the investment potential of the company’s stock in light of the company’s turnaround strategy. From Financial Note 2, we know that, in , the corporation had computed depreciation expenses on plants, machinery and equipment using straight-line. Get help on 【 Harnischfeger Corporation – Case Analysis Essay 】 on Graduateway ✅ Huge assortment of FREE essays & assignments ✅ The best writers!.

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Accounting Harnischfeger Corporation Case Essay

After a firm chooses a set of accounting policies, current accounting rules permit changes from one alternative policy to another at the discretion of the management. Also, these studies do not examine whether the stock market recognizes the recurring effects of accounting changes.

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. When the outside world compares our financial performance with that of other companies, they may or may not take the time and effort to untangle the effects of the differences in financial policies that various companies follow. The reduction in funding, and consequent increase in cash, is treated as income amortized over 10 years.

Prepaid or deferred taxes are Maintenance and repairs are charged to recorded for the difference between such taxes expense as incurred and expenditures for and taxes computed for tax returns. The plan consisted of four elements: The few students who want to invest in the company provide an interesting counterpoint of view and should be called on later in the class.


Effective fiscalthe company changed the financial year ending from July 31 to September 30 corportion certain foreign subsidiaries. The balance sheet also reflected an improvement in liquidity. Master’s or higher degree. Concurrent with the above cost reduction measures, the new management made some strategic decisions to reorient Harnischfeger’s business. Proxy advisors ISS and Glass Lewis expressed serious reservations about the plan and urged shareholders to vote against it.

This strategy is likely to help the company to move away from the mining and construction equipment business, which is a low-growth and cyclical industry, to a higher-growth and more stable business.

Harnischfeger Corporation – ppt video online download

He knew that barely three years corporaation the company had faced a severe financial crisis. Also, the company continued to liberalize its financial reporting policies. Preferred stock Essay Essay The condensed balance sheet of Cranetex, Inc.

Awards made regarding fiscal year are included in the Compensation Table above.

Harnischfeger Corp.

In order to undo the accounting distortions we concentrated our hanrischfeger on the following accounting issues: 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.

In accounting there is no such thing as absolute truth. My presentations Profile Feedback Log out. Changes in the sales calculation, by including the re-sales of products from Kobe Steel Ltd company in the Corporation sales Changes in the depreciation method mentioned before.


Do you think investors will see through these changes?

We wish to tell the truth but do not want to be overly conservative in doing so. Harnischfeger Engineers was an engineering services division engaged in design, custom software development, and project management for factory and distribution automation projects.

In my opinion, the changed accounting format highlights the effectiveness of our strategy better than the old policies do.

Ayala Corporation had evolved from a real estate company? He is customer inventories for the last three years.

Harnischfeger Corp. – Case – Harvard Business School

Palepu and Sarah Mehta. Harvard Business School Rev. Case Analysis guidelines for Ayala Corp. Evaluate Accounting Strategy Continuing the discussion of the change in depreciation method, this strategy reduced the annual depreciation expense, increasing net income. Other actuarial gains, Effective August 1,the Corporation including higher than anticipated investment terminated the existing plan and established a results, more than offset the additional new plan which is substantially identical to pension costs resulting from plan changes and the prior plan except for an improvement in interest charges on balance sheet accruals in the minimum pension benefit.