Professor Elam

Thursday Feb 9, 2012

Okay so I made up the number 1,186. We are studying ethics and past fraudulent accounting practices in ACCT 5308, Ethics. We have another candidate for

Who's the Worst

Yep Diamond Foods DMND CEO Michael Mendes is cleanig out his office, as Trump would say, You're Fired. 

Most accounting frauds involve shifting revenue or expenses from one period to another. That increases or decreases overall revenue for one or the other period. The object is to make th eperiod in question look better than it is. And that is the financial shenanigan that Mendes pulled. This is why end of the period cut off tests are performed in external audits. As I say in class, this all about what income and what expense goes in the bucket for the period under examination. 

And now, the does it matter moment. DMND dropped 38% – yesterday!

DMND was going to buy Pringles from Proctor and Gamble. Now I see articles specuating on the break up value of DMND itself, will the company go up for sale piece by piece? ROC at bottom is a first derivative of th eprice – Rate of Change- remember calculus?

Our solid analysis of GM and its cash per share resulted in a buy recommendation on our marketperspective.com blog at $20. Today the WSJ has an article detailing the success of the Cruze, GM's first small car success in decades. The Volt will go up for lease at $350. a month. I am still puzzled by what the California legislature plans to do if an insufficient number of their citizens do not buy electric cars to fulfill the state mandate by 2015. Does the legislature suspend all other car sales until enough Leafs and Volts are on the road?