Tesla is “burning cash,” yet CEO Musk does not want to address questions about capital needs. What do you think you would propose to him as sources of capital, should it be required? How would you decide on the mix of debt/equity?
So some firms need cash to invest in growth so they are selling “underperforming” assets. Do you think that maybe years of using cash flow to buy back stock has put some companies in this position? Why do firms buy back stock?
Do you believe that GE’s stock price is affected by the fact that it uses multiple “pro forma” or non-GAAP earnings measures? Why or why not?
If you were CFO of Intel, what would you do? What are all your options and how would you try to make a decision about your $10 billion in overseas cash?
Nokia has its plate full on many fronts. The CFO now must also contend with potentially negative interest rates for its $4 billion in cash, making it an even worse non-performing asset. What would you advise?
How does the SEC decide which disclosures are problematic, such as those pertaining to free cash flow?
If you were part of management, what criteria would be included in your decision about share repurchases?
Facebook had an accounting change that resulted in a $900 million boost to earnings. The FASB now requires “excess tax benefits” from stock options to flow through the income statement, rather than APIC. Does the change improve financial reporting? How?
SAP’s free cash flow increased, giving the company additional financial flexibility. Why do you think the European investor base would rather SAP reduce debt than increase share buybacks? Is being “debt-free” an “optimal” position for any company? Does is matter if it is European or not?
Are share repurchases “investments” in a firm’s own stock? Are they a form of “financial engineering”? What do you think is the real reason for the surge?
If you were the CEO of a MNC doing business in the U.K., how would you rank the factors in order of importance, including the corporate income tax rate, that you would consider in whether to continue to remain in the U.K.? What factors do you think Nissan considered?
If you were CEO or CFO of a firm, what are the various factors you would consider in whether to buy back stock, pay a dividend, and/or invest in capex? Do you agree that the current trend in the market is unsustainable? What do you foresee happening? When?
Should gains on property sales for Lenovo be part of operating income (above the line) or should they be below the line? Does it matter?
What are some of the disadvantages of debt? What is meant by being too “dependent on increasingly fickle capital markets to alleviate liquidity pressures”? If you were the CFO of one the energy companies, what would you do? How would you try to determine an “optimal capital structure” in this new economic environment?
Why is Lowe’s able to extend payment terms? How does this help free cash flow? What are the downsides to pushing out payments to suppliers?
If you want to raise capital as an entrepreneur, this research suggests that you also need to watch your body language. Thoughts?
What cash flows are difficult to classify? How could one of the “misclassified” cash flows affect firm valuations?
Good ideas for working capital management are in this article. As you explore career options, does this type of work (CFO, internal accounting) appeal to you?
