sunbeam case

1a.  AdjustSunbeam’s1997Earningbefore interest andtaxesforone–time eventsandapparent(e.g.,doubtful accounts,depreciationexpense,andetc.)changesinaccounting policy. Becarefultoadjust forthings donein1996thathada carry–over effecton1997.Youmaywanttocomputesomecomparative ratiostofacilitateyouranalysis.Besuretoprovidethedetails ofandclearlylabelanycomputations.

 

1b.  Utilizingyouradjusted numbersfrom(above)re–compute Sunbeam’soperatingcashflowsfor1997 (i.e.,computeanewcashflowsamount basedonyouradjustmentsto the     original  data).  Clearly  label  the  components  of  your computations.

 

Summarizeyourfindingsin1)a.and 1)b.(above),payingparticular attentiontoanyevidenceoffraud (becarefulnottolet20–20hindsight–i.e.,informationthatyou areawareof,butisnotincludedinthiscase–influence your conclusions).

 

2 YoureadaboutinyourtextandassessedintheStrategicAnalysisportionof yourproject,thefactorsthatMichaelPorteridentifiesasinfluencingand directingcompetitivestrategy.

 

Required:

a)Identifyeachofthosespecificfactors

b)Providespecificexamplesofaccounting informationthatmightbeusefulforassessingeachfactor.Besureto explain(briefly)howeachexamplemightbeused