Description:  Wide credit spreads and lack of competition boost profits at Goldman Sachs and JPMorgan.

Source: CNNMoney – video report
 
Date: 10/16/2009

Keys:  Stock valuation (p281), Financial environment (p27), Cash flows (p355)

Link: http://money.cnn.com/video/markets/2009/10/16/mkts_ss_banks_credit_fbr.cnnmoney/

Questions for discussion: 

• Summarize the reasons for bank success this quarter and the reasons for concern in the future?
• How does banking financial success or failure affect corporate borrowers? Explain your answers.

Description: It isn’t often that big blue gets a black eye. But on Friday IBM (IBM.N), the leading U.S. technology firm known for its conservative management, found itself entangled in the largest ever hedge fund insider-trading scheme involving Galleon Group founder Raj Rajaratnam.

Source: Reuters.com

Date: 10/16/2009

Keys: Capital budgeting decisons (p311), Stock market (p281)

Link: http://www.reuters.com/article/technologySector/idUSN1642835520091016

Questions for discussion:

• How do you think this scandal might affect these firms’s stock value in the near and long term? Explain your answer.
• Do you expect this to affect capital budgeting decisions by current or potential customers? Explain your answer.

Description: Harley-Davidson Inc., the biggest U.S. motorcycle maker, rose on plans to cut about 180 jobs, end its Buell line and sell its MV Agusta unit to save as much as $140 million in annual costs.

Source: Bloomberg.com

Date: 10/15/2009

Keys: Cash flows (p355), Stock market (p281)

Link: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aADuFuWty08s

Questions for discussion: 

• Summarize the reasons given for Harley-Davidson’s rise in stock value?
• How will financials change as a result of this decision? 
• Do you think this was a wise decision? Explain your thinking.

Description:  The economist who accurately predicted the recession says unemployment will peak between 10% and 11%.

Source: CNNMoney – video report
 
Date: 10/06/2009

Keys:  Financial environment (p27), Working capital management (p.461), Cash flows (p355)

Link: http://money.cnn.com/video/news/2009/10/06/n_ss_roubini_earnings.cnnmoney/index.html

Questions for discussion: 

• Summarize Rouini`s forecasts and explanation for business conditions in general and for the financial services industry in particular.
• How should a financial manager in the hard hit industries he mentions react to this forecast with respect to strategic plans, employment, capital budgets, etc? Explain your answer.

Description: Beset by delays, the government’s program for ridding banks of bad assets is finally poised to take off. But problems still plague the controversial program.

Source: CNNMoney.com

Date: 10/09/2009

Keys: Capital structure policy (p526), stock market (p281)

Link:  http://money.cnn.com/2009/10/09/news/companies/ppip/index.htm?postversion=2009100916

Questions for discussion:

• Summarize the problems facing the program?
• What are some possible solutions you can think of that would help?
• What are the consequences if the program fails?

Description: ConocoPhillips, the third-largest U.S. oil company, said it will sell about $10 billion of assets in the next two years and cut capital spending in 2010 to reduce debt and increase returns on capital.

Source: Bloomberg.com

Date: 10/08/2009

Keys: Evaluating project economics and capital rationing (p396), Stock market (p281)

Link: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a7WBQb3aYhUU

Questions for discussion:

• What are the advantages and disadvantages to following this strategy?
•  How will this affect the firm’s stock value in the near and long term? Explain your answer.

Description: U.S. service industries expanded in September for the first time in a year as the emerging recovery spread from housing and factories to the broader economy.

Source: Bloomberg.com

Date: 10/05/2009

Keys: Cash flows (p355), Growth (p586)

Link: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a9IZDDP21AtQ

Questions for discussion: 

• Why is the service industry index a useful measure of business growth?
• Do you believe that the economic expansion was only temporary or the start of a new business cycle?
• How will this affect financial planning over the next six months? Explain your thinking.

Description:  Turning the carbon-eating organism into crude could conserve oil and lower carbon emissions.

Source: CNNMoney – video report
 
Date: 10/02/2009

Keys:  Risk (p.209), Cash flows (p355)

Link: http://money.cnn.com/video/news/2009/10/02/n_ef_algae_oil.cnnmoney/

Questions for discussion: 

• What are the risks associated with investing in this industry?
• What are the existing infrastructures that give this concept certain advantages over other alternative energy technologies?
• Are there opportunities for smaller operators or will the energy business always be reserved for large firms?
• How would you go about preparing statements of projected cash flows?

Description: So IBM decided to drop the bomb on Google — Big Blue will offer a basic email service for $36 per seat, undercutting the latter’s $50 a head Apps pricing. A Gartner analyst called it “trouble for Google,” but I’m not so sure. I think that Google has still got some enormous advantages, and that IBM’s target may actually be another company.

Source: BNET.com

Date: 10/03/2009

Keys: Capital budgeting and Cash flows (p355)

Link: http://industry.bnet.com/technology/10003588/ibm-versus-google-youve-got-to-be-joking/

Questions for discussion:

• What are the advantages and disadvantages to using email services from IBM or another competitor? 
• How does this decision affect capital budgeting and cash flow?
•  What are the implication for HR?