Group Exercises

12-1. Your group should obtain a copy of your college or university's most recent results of financial operations, and a copy of the budget document for the same fiscal period.

Each person in your group should answer one or more of the following questions:

1. Was the budget prepared centrally or were the principles of decentralization followed in its preparation? Was the assistance of the various segments, departments, or colleges sought? What problems- (legal, etc.) might stand in the way of a totally decentralized budget preparation for an educational institution - particularly if it is publicly supported.
2. (Several persons should work on b.) Does the financial report of actual operations allow a reader to determine the profitability of the various segments (colleges, departments etc.)

If report shows a segment breakdown - is the information provided meaningful to a decision on how the various parts of the college are performing financially.? If the report does not allow such analysis, try and reconstruct a financial report that would allow such a determination of profitability (or loss). Determine the number of students in each school or college, make estimates of the revenue per each student, and if costs per college are not available, apply college wide averages. Take account of the fact that some departments require more expensive technology than others do. If some segments are successful at attracting outside support take this into account, particularly if the support is continuing. Limit the expense categories to about ten (10).

1. Assemble data on the number of students enrolled in each segment - track these numbers over time. Determine if a decline in total student revenue for a segment has resulted in a decline in costs for the segment.
2. Your group should assemble the data. Discuss what you learned from this exercise. What was the most surprising thing you learned.?

12-2. Each member of your group should choose two companies traded on the Toronto Stock Exchange.

1. Prepare an overview of the businesses and/or activities in which each corporation is engaged.
2. Prepare a list of the differing segments which each business is involved in.
3. Give your opinion as to the profitability and revenue growth of each segment over the past several years. (Your research will be somewhat limited. Generalizations will be appropriate.)
4. For one of your corporations obtain a copy of their annual report. Determine if there is segment financial information. If so, does the relative profitability of the segments (or lack of profitability) surprise you.
5. Your group should meet and discuss your results.

12-3. For each of the following industries, select a corporation (give the name) in each industry, and prepare a list of the segments. Each person should select two choices.

1. Local bank
2. International bank
3. Real Estate Investment Trust
4. Corporation which constructs single family homes over a wide geographic area.
5. Car Manufacturer (such as General Motors- include various other activities the manufacturer is engaged in)
6. Automotive parts supplier for the retail market (such as Magna International)
7. Public Utility Corporation-such as Ontario Hydro
8. Oil Corporation- such as PetroCanada