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You Be the Detective: Pondering Financial-Reporting Conundrums and Business Actions

Author

Listed:
  • Martin Gosman

    (Department of Economics, Wesleyan University)

  • Mathius Gazi

    (Department of Economics, Wesleyan University)

  • Michael Manieri

    (Department of Economics, Wesleyan University)

Abstract

This article presents six financial-reporting conundrums and business actions for analysis. We include four instances where the relationships among a firm’s data seem to defy logic; when it appears that a firm’s charge customers pay their accounts within just a few days of their purchases, a firm’s stock plummets within two months of the firm’s posting record sales and income, a company’s “hit” to earnings from a year-end asset reduction seems to take its books out of balance, and a consistently profitable firm reports billions of negative retained earnings. On two other occasions, firms’ actions could put their businesses at risk, by delaying the purchase of merchandise urgently needed by a valued customer and taking many more days than other firms to sell its merchandise. Discussion questions enable students to become the detective and address these financial-reporting conundrums and business actions. Suggested answers and follow-up discussion points are provided for instructors in a teaching note.

Suggested Citation

  • Martin Gosman & Mathius Gazi & Michael Manieri, 2025. "You Be the Detective: Pondering Financial-Reporting Conundrums and Business Actions," Wesleyan Economics Working Papers 2025-005, Wesleyan University, Department of Economics.
    • Handle: RePEc:wes:weswpa:2025-005
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    File URL: http://repec.wesleyan.edu/pdf/mgosman/2025005_gosman.pdf
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    Keywords

    unusual financial data; business events;

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