Case Teaching Package
A case teaching package is available for this case. It includes strategies for case presentation, key concepts, solutions to the assignment questions in the case, and suggestions for the most effective ways to work this case into your course.

Length
This case is 6 pages in length and its case teaching package is 8 pages.

Abstract

This case is set in a "mini-conglomerate" in the last years of the "soarin' sixties" when many people still believed that conglomerate mergers added value for shareholders.

Tuck Industries is not a real company. Rather, it is a composite of many component issues and ideas, each of which is taken from real companies in the "soaring 60s." The case is an excellent vehicle for reinforcing problem recognition and for reviewing many basic financial analysis techniques. Problem recognition is emphasized in the sense that the company has a great many problems of all kinds—how many can the student see? Technique areas covered include contribution analysis, project economics, ABC, cash flow analysis, ROI analysis, ratio analysis, performance measures, capital structure, and takeover maneuvers.

Linkages to Textbooks or Journal Articles/Fit Within a Course

The case is fun for students and fun to teach. It will clearly support a full class period of discussion, or more, depending on how deeply the instructor wants to delve into each area. We see the exercise as essentially broad and shallow. That is, we try to cover as many issues as possible but don’t try to cover any of them very deeply. The case isn’t rich enough to go very deeply on any issue, but, it is broad enough to support a wide-ranging "review" class.

We use the case at or near the end of the required management accounting course. We have also used it as a final exam case, with a 3- or 4-hour time limit.

Study Questions

1. Based on the information in the case, what is your best estimate of the "gross ROA" for each of the three divisions for 1968? What inferences do you draw?
2. What inferences do you draw from a cash flow statement for 1968? Is a breakdown by divisions useful?
3. What inferences do you draw from the comparative balance sheets and income statements for 1967 and 1968?
4. What is your assessment of the new product proposal from Consumer Products? Was Hosbein wrong to reject it?
5. Why do you suppose a "corporate raider" has taken an interest in Tuck Industries? Be specific as to what Billy Bob sees and what he might do about it.
6. What approach would you suggest for assessing the performance of the three divisions on an on-going basis? Be specific for each division.
7. What other advice do you have for Mr. Richards?

The downloadable file for this case is in Microsoft® Word 7.0 for Windows®.

If you do not have Microsoft Word, you can download the free Microsoft® Word Viewer 97 right here:   For Windows 3.x   For Windows 95

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