What does it mean to “manufacture” earnings growth via share repurchases? What is your assessment of earnings growth that is denominator driven rather than numerator driven?
Do stock repurchases and a stock splits give different signals about a firm’s future? Do either of these change the underlying economics of the firm? If so, how?
Why do stock prices jump even when a firm (such as Telsa) reports a loss? What role does “expectation” play in stock prices? Do you think the market reacts more to GAAP results or non-GAAP results? If you think the latter, what does this suggest about the relevance of GAAP?
What is your opinion about corporate insiders selling their firms’ stock before a bankruptcy filing? Should there be changes in laws governing insider sales?
Do you agree that the “relevance of accounting information is decreasing”? Are the new financial metrics to measure firm performance an indicator of market participants’ impatience with the FASB addressing lack of relevance? Will the FASB lose its own relevance?
JC Penney’s sales declined dramatically and may decline further. Are firms required to let investors know about such trends? If so, where do they disclose the information? What are auditors’ responsibilities with respect to such disclosures, if any?
Suntech (a Chinese manufacturer of solar panels) is going into bankruptcy. Who will have first claims on any remaining assets? Why are the creditors not treated equally? What are the implications for foreign investors?
What do cuts in dividends suggest about a firm’s future? Why do you think AT&T may be considering selling “non core” assets? In your opinion, is this a good idea? What are the potential legal consequences for firms who divulge potential market-moving information at nonpublic “dinner meetings”?
Do you believe that the measures used to identify the “25 best companies” are appropriate? Why or why not? How were the measures developed? Who developed them? Are these stakeholders appropriate for deciding the “best companies”?
HP’s net income fell 16% (and revenue fell 6%) for the most recent year. So, why did its stock rise? What do you think Ms. Lesjak (the CFO) said in her 45 minute speech to managers about the importance of cash flow?
Are the the information needs for private company stakeholders different from those of public companies, such that the accounting standards should be different?
Google’s Schmidt is selling 42% of his shares. Do you think it matters for investors whether he sells or not? Why do you think it might matter more if the current CEO or CFO were to sell such a large stake?
What is the purpose of the P/E ratio? Critique the ratio. When would you use trailing earnings in the ratio? Forecasted earnings? Normalized earnings?
Can you describe why the managers may have wanted to overproduce vehicle inventory? Can you describe some of the negative consequences of doing so? Can you suggest an incentive system that would lead to a more optimal outcome? Should cash flows be “more important” than earnings in this context?
Apple cut the orders for iPhone 5 screens at its suppliers. How was this information determined or obtained? Is it a disclosure that Apple is required to make under accounting standards or under SEC regulations? If you were an investor in Apple, would you find the disclosure relevant? Why?
Should the SEC require corporations to provide details of political donations? Why or why not? If you say yes, what is the downside, if any, of making corporations provide the disclosures?
Should the amount of disclosure in financial statements be reduced? Can you give an example of superfluous disclosure? What are some criteria you would use to decide which disclosures should be cut, which ones should be maintained, which ones enhanced?
The Best Buy big box business model has been under threat for several years. What ratios indicate a problem? If you were the CEO, what would you do? If you were on the Board of Directors, how would you structure compensation to motivate the CEO to act?
HP’s “marriage” to Autonomy apparently isn’t working, but it seems Autonomy may have been hiding something. Who do you think bears the blame? Whitman? Apotheker? Lynch? the auditors? Investment bankers? Others? If true that sales of hardware were booked as sales of software, why does this matter if bottom line (net income) was unaffected? Where was COGS reported?
What’s the threshold that banks need their ROE to hit? Why do analysts and investors claim this is “the magic number”? What are ways to hit this magic number? Do banks have incentives to do so?
