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

Martin Gosman (), Mathius Gazi () and Michael Manieri ()
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Martin Gosman: Department of Economics, Wesleyan University
Mathius Gazi: Department of Economics, Wesleyan University
Michael Manieri: Department of Economics, Wesleyan University

No 2025-005, Wesleyan Economics Working Papers from Wesleyan University, Department of Economics

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.

Keywords: unusual financial data; business events (search for similar items in EconPapers)
Pages: 9 pages
Date: 2025-05
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