Maloney, Suzanne (2015) Forge Group Ltd case study (A): the revealing nature of numbers. IMA Educational Case Journal, 8 (1).
Abstract
Forge Group Ltd, an engineering and construction company in Australia, was a healthy company that acquired two major construction contracts in 2012 through the purchase of another company. The case presents details of a corporate collapse that occurred at the beginning of 2014. Twelve months prior to the Forge Group Ltd (FGL) collapsing, the company was viewed very favorably by the market and reached a peak share price. The financial statements illustrate the danger of acquisitions, risk, and debt, as well as the need for good internal reporting.
The value to students and educators is in illustrating the importance of good fundamental financial basics. The case can be taught at the basic level by having students read, extract, and comment on financial statement information. Or it could be widened at the intermediate level by asking students to combine information from all financial statements to appraise working capital requirements. For advanced-level courses, students would conduct financial statement analysis using common techniques and make judgments. This case also can be teamed with its sister case B to explore more advanced topics, including corporate governance, management ownership, compensation, risk, and ethics.
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| Item Type: | Article (Commonwealth Reporting Category C) |
|---|---|
| Refereed: | Yes |
| Item Status: | Live Archive |
| Additional Information: | Files associated with this item cannot be displayed due to copyright restrictions. |
| Faculty/School / Institute/Centre: | Historic - Faculty of Business, Education, Law and Arts - School of Commerce (1 Jul 2013 - 17 Jan 2021) |
| Faculty/School / Institute/Centre: | Historic - Faculty of Business, Education, Law and Arts - School of Commerce (1 Jul 2013 - 17 Jan 2021) |
| Date Deposited: | 25 May 2016 05:01 |
| Last Modified: | 20 Sep 2017 00:04 |
| Uncontrolled Keywords: | financial statement analysis; working capital management |
| Fields of Research (2008): | 15 Commerce, Management, Tourism and Services > 1501 Accounting, Auditing and Accountability > 150105 Management Accounting |
| Fields of Research (2020): | 35 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 3501 Accounting, auditing and accountability > 350105 Management accounting |
| URI: | http://eprints.usq.edu.au/id/eprint/28411 |
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