Harnischfeger Corporation Case Study Solution Pdf Writer

Case | HBS Case Collection | March 2017 (Revised January 2018)

Ant Financial (A)

Feng Zhu, Ying Zhang, Krishna G. Palepu, Anthony K. Woo and Nancy Hua Dai

Headquartered in Hangzhou (China), Ant Financial has grown into a fintech “Unicorn.” The fintech empire that the company established spanned verticals such as mobile and online payment (Alipay), money market fund (Yu’e Bao), wealth management (Ant Fortune), digital-only banking (MYbank), credit scoring (Zhima Credit), and consumer credit portal (Ant Credit Pay) among others. After another sales record during the 2016 11.11 Global Shopping Festival along with Alibaba, Long Chen, chief strategy officer of Ant Financial, was contemplating the various opportunities and challenges associated with the firm’s international expansion, inclusive finance in rural regions, and regulatory uncertainties.

Keywords: Growth and Development Strategy; Global Strategy; Finance; Opportunities; Financial Services Industry; Technology Industry;

Citation:

Zhu, Feng, Ying Zhang, Krishna G. Palepu, Anthony K. Woo, and Nancy Hua Dai. "Ant Financial (A)." Harvard Business School Case 617-060, March 2017. (Revised January 2018.)  View Details

Harnischfeger Corporation 1. Describe clearly the accounting changes Harnischfeger made in 1984 as stated in Note 2 of its financial statements. The company added products that they purchased from Kobe Steel, Ltd and sold by the corporation to reflect more effectively the nature of the corporation’s transaction with Kobe (Papelu, 1985). Harnischfeger included financial statements of certain foreign subsidiaries. For financial purposes, Harnischfeger Corporation changed the way they compute the depreciation method - going from accelerated method to straight line method. The company changed the depreciation life on plants, and the residual values on certain machinery. This resulted in increased net income for 1984 by $3.2 million or $2.7 per share (Papelu, 1985). 2. What is the effect of the depreciation accounting method change on the reported income in 1984? How will this change affect profits in future years? After the changed the depreciation accounting method, the company’s reported income increased by $11 million (Papelu, 1985). Also with the change in the depreciation accounting method, the company’s net income in 1984 was $15.2 million (Papelu, 1985). The change in the depreciation accounting method will have an effect on future earnings in the future years. The reason is because the depreciation expenses will spread out in the future years under the straight line method expenses will continue to depreciate in the same amount with their remaining assets. 3. What is the effect of the depreciation lives change? How will this change affect future reported profits? The financial numbers are likely to improve. With the effect of the depreciation lives change, the company increased its net income by $3.2 million (Papelu, 1985). The change will also cause the future reported profit to increase because the depreciation live (i.e. plants, equipments, machinery) will cause the company to spend less money annually on depreciation expenses. 4. The depreciation accounting changes assume that Harnischfeger’s plant and machinery will last longer and will lose their value more slowly. Given the business conditions Harnischfeger was facing in its primary industries in 1984, are these economic assumptions justified? Yes, I believe that the economic assumptions were justified for the 1984 fiscal year because the

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