• Professor Elam

    Wed Oct 26 2016

    The cash flow statement lets us know if a company is generating sufficient cash to service its investing and financing needs.

    One has to wonder how this is going to work out for Exxon Mobil.

    Screen Shot 2016-10-26 at 7.44.30 AM

    The column at left is 6/30/16, then 3/31/16, then 12/31/15, 9/30/15

    Now just look at the famous 'bottom line'  XOM has only had one quarter when it generated cash above its needs.  Granted that quarter is more than the red ink in the other three. But notice XOM had to borrow  $4.3 billion in the financing section to generate that cash. So frankly, XOM cannot forever borrow its way to cash flow.

    The three billion in dividends is  a big draw down every quarter and something the Directors will be loathe to cut.

    Bottom line, will increased oil prices be enough for operations to outpace spending?

  • Professor Elam

    Wed Oct 26 2016

    I have had my doubts about TESLA.

    But everyone assures me that a guy who can shoot rockets into space can build electric cars.

    Gee sounds a lot like John DeLorean to me.

    That operation also stayed afloat on a sea of subsidized government money, just as TESLA does.

    Tesla's predictions of earning a buck a share back in  March are now down to negative earnings for the quarter.

    How can the firm deliver the promised $35K electric car while failing to make any GAAP earnings?

    We will look at the statements in class.

  • Professor Elam

    Wed Oct 26 2016

    The Good Housekeeping magazine also once issued its Good Housekeeping Seal of Approval. But then it finally came out that unless a company advertised in the magazine,

    one would not get approved.

    Now the Better Business Bureau appears to be doing the same thing.

    Take a look!

  • Professor Elam

    Tuesday Oct 25, 2016

    After posting the article on CAEs rising in importance I ran across this ad for a Senior Internal Auditor for USAA Real Estate.

    I thought you would find this interesting as it goes into great detail of just what the person is expected to do.

  • Professor Elam

    Tuesday Oct 25, 2016

    Former PA Atty General Kathleen Kane was sentenced to 10-23 months on nine couints.

    Perjury, obstruction of justice, leaking grand jury document5s all to embarrass a political foe and for lying about it under oath.

    Note it is the lying about it under oath that so often brings people down.

  • Professor Elam

    Tuesday Oct 25, 2016

    This article highlights the growing importance of the Chief Audit Executive.

    I have highlighted internal auditing in class as a fast growing career path in accounting. Here is more evidence that this is indeed the case.

    The article notes that a CAE who reports to management may well be stymied. The article notes that David Julian was the CAE at WFC. But he played no role in uncovering the creation

    of unwanted accounts leading to the resignation of CEO Stumpf.

  • Professor Elam

    Monday Oct 24 2016

    Here is the link to 15 photos and description of my 2009 Cobalt SS. Screen Shot 2016-10-24 at 10.10.39 AM

    I am the second owner since purchase at  10K miles

    Always run Valvoline 100% Synthetic, Engine uses no oil between changes

    250 bhp 2.0 Liter four cylinder, Turbo, Sunroof, Yokohama 235 x 40x 18, five speed, limited slip front differential, Performance Recaro type seats, leather wrapped steering wheel, minor hail damange

    This is not a car for your teenager but is a for an adult who drives responsibly to enjoy the power and handling of this

    unique offering.

    Chevy no longer makes this model

    784 2322

  • Professor Elam

    Monday Oct  24, 2016

    Here is an interesting article  on high tech in Estonia.

    Estonia is home to Skype by the way.  Screen Shot 2016-10-24 at 7.34.19 AM

    Gee who knew?

  • Professor Elam

    Weekend Oct 23, 2016

    I attempt to emphasize that the difference between passing and failing a certified accounting exam can be quite thin.

    The experience that Charlie Strong has had as the UT Austin football coach illustrates this point.

    I am a UT Austin Alum and frankly have nothing but admiration for Strong.

    Already there are rumors that he will not last as coach, this is his third season.

    Screen Shot 2016-10-23 at 11.58.32 AM

    The problem here is that only one of the three wins was against a Big 12 conference opponent.

    But if you add the total points for all seven games, UT has scored 253 while its opponents have scored 228.

    Okay there is clearly on lopsided game that is an outlier, the easy defeat of UTEP. Take that out of the equation and it is

    UT Austin 212, Opponents 221

    So  out of six games, Strong has collectively scored a total of nine points less than the six teams combined.

    Yet the loss to Cal Berkeley was a mere seven points

    the loss to OU was less than one touchdown

    Iowa State was handily beat by three touchdowns and extra points

    And finally the loss to Kansas State was by a mere three points.

    Now the sports minded among you will point out as did the press

    that Kansas St had possession of the ball during the first half for like  23 of the 30 minutes, UT was playing defense all the time. And there were unforced errors, blah blah blah

    But my point here is

    that after six games against legitimate opponents, U Texas trails by a total of 9 points for all of which may cost Strong his job.

    I'd say the UT fans are being fair weather, perhaps Strong needs an outside consultant, I am no football coach

    But I am an accounting coach

    And this is a good example that one can get close,

    and still lose the season or the Certified Accounting Exam.

    Ok State did win by three touchdowns, 18 points

     

    okay

    Yet, all the news reports are that the 'fans' are restless and Strong's job may be at stake.

  • Professor Elam

    Thursday Oct 20 2016

     

    When Johnson and Johnson discovered a very few bottles of tylenol had been poisoned, they reacted quickly. The firm removed every existing bottle in the USA.

    Expensive,no doubt but cheap in the long run. That action is widely admired in ethics texts as a prompt response to a life threatening situation.

    WFC could learn from J and J. Now the CA Atty General is investigating if WFC created identity theft by openning unrequested accounts.

    Delay only makes things worse. We reported earlier this week that a letter surfaced from 2007 regarding cross selling and its implications. Yet Stumpf claimed he knew nothing until  2013.

    Tolstedt's replacement is a former Wachovia executive.

    Gee no new perspective here!