Harnischfeger Corporation_Case Analysis

소개글

Harnischfeger Corporation에 대한 CASE분석 영문자료입니다.

목차

1. Accounting policy changes and accounting estimates
1-1 Changes to affect to Net Income
1.2 Some Other changes which are not sure whether to affect to NI or not.
1.3 Total effect of changes

2. The motives of Harnischfeger’s management
2.1 The motives
2.1 Investors see through these changes?

3. Company’s future prospects

본문내용

1. Identify all the accounting policy changes and accounting estimates that Harnischfeger made during 1984. Estimate, as accurately as possible, the effect of these on the company’s 1984 reported profits.

1-1 Changes to affect to Net Income
① Change in accounting principle (Depreciation methods on assets) - (Note 1)
The depreciation policy for financial reporting purposes was changed to a straight-line method from a principally accelerated method.
The impact of this change results in lower cost in earlier years and higher cost in later years.
→ NI increased $11 million


3. Assess the company’s future prospects, given your insights from questions 1 and 2 and the information in the case about the company’s turnaround strategy.
rd the future benefit. After changing accounting, if the firm makes loss, the loss would bigger and makes gain, the gain would reduced.
nd could go bankruptcy.
In the future however, the company turnaround from loss to gain, I think these accounting modifications make no problem, it just use future profit now.
In this case the company suggests 4 plans - changes in the top management, cost reductions to lower the break-even print, reorientation of the company’s business, and debt restructuring and recapitalization.

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