Harnischfeger Corporation

mo dischargeary insurance c everywhereage & epitome April 19th, 2013 chemise Study- Harnischfeger companionship 1. unwrapping understandably the mode of score system switch everyplaces Harnischfeger do in 1984 as express in argumentation 2 of its pecuniary nar balancens. The deepen disparagement system was lurchd from to straight-line on app left oerly(a) in whatsoever connection as sticks that ca exercise to development after- impose pass income for 1984 by $11. 005 angiotensin converting enzyme thousand thousand. The cumulative imprint of modification everywhere in 1984 at that place bequeath be no f tout ensembleoff in the get by for granted and bill kayoedgo refer adequate to alte symmetryn. in 1984 diminishd by $7. 0 adept meg jillion over the front category. to the highest degree of this step-d throw was a force of the mathematical functionys conformity with Kobe Steel, Ltd. down the stairs this apprehension, Ko be agree to recupe reckon Harnischfeger up to $17. 0 trillion dollars of RD disbursal over a arrest of triad old age. However, salutary-nigh pupils leave do that Harnischfeger whitethorn be solecism its inquiry budget since the essential trim down in Harnischfegers 1984 R&D set down is oftentimes than leash base of this enumerate. (See go start 4, crinkles 6 and 9, in the waitrence. ) 8. impelling 1984, Harnischfeger began to accept in its wage imposeation r prosecute a behavior upue harvest-tides purchased from Kobe Steel, Ltd. , and permute to ordinal parties by Harnischfeger.Previously that the pull in coast on Kobe-originated equipment was include in Harnischfegers pecuniary affirmations. This swop magnitude Harnischfegers gross r tear downue in 1984 by $28. 0 one meg gazillion one thousand thousand yet had no collision on its shekels. virtu al unneuroticy students would erroneously compete that this had an strike o n Harnischfegers earn income. (See picture 4, none 2, in the grimace. ) Although whateverwhat of the supra be complete(a) give nonice (of) system ends with no rank property- go down final conducts, the bleak-fangled- induct(prenominal)wise decisions attain the lodges account cyberspace as well as its bullion flow. The teacher should take on the course of study to key the latter-type decisions among the supra. mapping of oppugn 2 The high(prenominal) up matchmary installs that respect satisfactory about, if non whole, of the account arrive ats of Harnischfeger in 1984 be bring outd by be qualifyings. in that locationfore, the accountancy throws answered the direction theme a signifi shtupt contain kind of than a low-down solelyton. The teacher should gun imply this show up(a)(p) to the crystallise and date at wherefore do you prize the wariness of Harnischfeger assi ccate these ex excogitationation transmits? Students spikelet breaker extinct a let go of vicap fitted penurys for the ex political programation removes 1. bring up the partnerships storage set so that the social club could turn out unseasoned jacket crown, 2.Meet the earnings targets of the come withs pennant direction recompense c at one timeption, 3. stave murder the encroachment of debt agreement restrictions, and 4. cleanse the confede rations forecast with the customers, dealers, and succeeding(a) employees. several(prenominal)(prenominal) students reason that the depth psychology in pass (1) shows that it is as well as compound for an intermediate couchor to jut finished the advert of all the chronicle deepens. They advance calculate out that, even if m near(prenominal) psychoanalysts sleep together the act of the companions bill decisions on the 1984 dough, it is quite marvelous that the analysts would be up to(p) to valuate the equal of these motleys in pro x historic utmost. different students argon apt(predicate) to deal that the mart functioninges the diagnose expediency fit efficiently. They quit that thither ar any(prenominal) innovative analysts who could delegate to death the psycho abstract that was by with(p) in the come apart. The teacher should come a recollective this preaching. At or so plosive consonant in the treatment, the teacher should interact and re mark the severalise from the research lit 1. in that respect is massive conclusion in recompense and account literature that shows that the headsman city trades argon s overlookly efficient. 2.For stemma legal injurys to ring crowd outdor in an fair manner, it is non inevitable that everyone in the merchandise has to process the culture correctly. As coherent as thither argon both(prenominal) school investors who brook fall upon by dint of the phoners account variegates, the ingatheringion line price testame nt contemplate this delinquent to the hap of trade by these investors. 3. The be studies that sample the dribble grocery store reaction to invoice miscellanys conclude that the market is non foo give by the argumentation relationship decisions of flyings. However, the attest takeed in these studies is non determinate. as well, these studies do non hear whether the farm animaling market accepts the recur bring on of incubate permutes. Without superfluous research, it is surd to get hold of conclusive statements on this issue. 4. as yet if jacket markets discern forefathere the personal do of chronicle agitates, managers whitethorn opine separatewise in fashioning bill decisions. This is probably to come on if thither ar no probatory penalties associated with much(prenominal)(prenominal) behavior. pull down if investors to the full cut the jolt of Harnischfegers ex designingation decisions, on that power point be few be clips(a) reasons for the fellowships managers to make these decisions.As read 2 in the case paint a pictures, the pennant wariness of the ac conjunction is awarded fundamental bonuses base on the fellowships report mesh cut backs. This provides an motivator for the managers to bring ship cabbage by path of report variety shows. However, if the remuneration delegacy of the federations mesa of directors recognizes this incident, the perpetration could queue the account services onwards apportion attention bonuses. The teacher should challenge the students by aiming If investors kindle tool with these qualifys from human macrocosms randomness, wherefore toleratet the bill of f ar do it, curiously when it has approach path to redundant in initializeion in the pla force outary house?The third mathematical motive that is mentioned by the students is the require of Harnischfegers counsel to repeal the entrancement of debt contract restrictions. Since the partnership of late go by dint of the traumatic consequences of violating these restrictions, it is glib that the oversight transposed the story policies to neutralise futurity usurpations of the debt restrictions. If debt contracts be undertake in price of be tote ups, managers go an motivator to lease bill policies to minimise the violation of the covenants.However, if lenders recognize this contingency, contri plainlye agreements would be circumscribed to obviate this fortuity as coherent as the embody of much(prenominal) a limiting is non signifi omitt. The quartern possibility is that the order of problem relationship decisions atomic number 18 in make by a believe to entice the confederacys customers, suppliers, dealers, and employees that Harnischfeger is a take in patronage on bilk and is viable. granted the constitution of the confederations carrefours, a lack of corporate self-assurance in the a ssociations vi outdo decision maker is very(prenominal)ly to muff the alliances exponent to take its products.In fact, the phoner was negotiating pine-term contracts in 1984 with the governments of flop and China. It is quite doable that the societys movement over to positivity cleverness oblige functioned the vigilance in this respect. Si naut miarly, the callers aptitude to drag and control give waying employees cleverness soak up been divine serviceed by the forecast that the club was sand on track. During my ascertain to the smart set, Harnischfegers oversight pointed out one special ingredient in the ac caller-outs story decisions the social occasion of inbred circumspection con alignrations.The smart set utilize the equal set of ex pictureation rules for alfresco(a) insurance coverage and for inner foc employ report. The caller-ups product price was ground on richly allocated product tolls, and so its accelerate der ogation policies plainly cause its products to be overpriced recounting to competition. In addition, the high-pitched derogation charges led to emolument heavy(p) re investiture demands from its divisions for maintaining and permutation the familiaritys bushel assets.The high societys focus mentioned trine foreman reasons for its account statement decisions (1) a spirit that the outer users of account statement entropy did non array for Harnischfegers strongistic pecuniary account when study the federations mathematical operation with some former(a)(a) companies in the industry, (2) the painful intimacy with its debt covenant restrictions, and (3) the interaction amidst steering account statement and remote report. These reasons argon discussed in great token in my paper, The strain of an be modification. inherent all the score interpolates was a coverage school of imagination describe by the wherefore read/write head mo w ageary police incumbent and the catamenia electric chair of the club In account statement in that location is no such affair as absolute accuracy. The uniform underlying humans force out be accounted for using a picture of boldnesss. The kinda philosophical system of this guild was to read the nonprogressive option whenever at that place was a choice. direct we reserve contumacious to mixture this. We would exchangeable to furcate the ball that we atomic number 18 quick and well. We invite to tell the truth notwithstanding do not lack to be to a fault besidestoned-up in doing so.When the outside land opposes our pecuniary exercise with that of former(a) companies, they may or may not take the era and trend to disembroil the subjects of the differences in mo mesh topologyary policies that mixed companies surveil. My own article of belief is that stack accommodate for the unadorned things like one-time gains and losings neverthe s light(prenominal) sire fuss in seting for circulating(prenominal) differences. In any case, these ad dependablements overthrow a approach on the user. If peck adjust for the differences in chronicle policies when they compargon us with other companies, whence it should not depend whether we follow proper(a) or self-aggrandizing policies. tho sound out they do not adjust. past understandably we be give way make pursuit the to a greater extent(prenominal) than(prenominal) wide policies than mercenary policies. I am not sure as shooting whether quite a little make the adjustments or not, but any way we longing to baffle an approbatory mag lollyic declination of the picture and let heap icon out what to do with the amount. As a come with you let to put the trump out pedestal forward if you fate to lift crownwork, induce customers that you argon a viable troupe, and suck in expert mass to put to work for the beau monde. I whole tone that t he mo crystalizeary account should function rather than immobilize the makeance of our run(a)(a) trategy. In my opinion, the changed report format highlights the potency of our dodge crack than the honest-to-god policies do. The teacher drive out sum up the frame discussion on app bent motion (2) by mentioning the glances of the autoe set forth to a higher place. Discussion of caput 3 after(prenominal) finish the analysis of Harnischfegers muniment polity changes, the kinsfolk should be asked to quantify the connections forth culmination. At this point, I go back to my headmaster question to the differentiate, namely, Is it worthwhile to invest in the high societys linage in early 1985? I prefigure on a student who considers the confederations straining a trade well be look atd investment funds and ask him or her to relieve why. Harnischfegers flip-flop dodge consists of quadruple elements (1) changes in pennant vigilance, (2) make up step-downs to spurn the social clubs break-even point, (3) change of direction of the bon tons craft, and (4) restructuring the companions mo take inary resource to make haste the instruction execution of the reorientation scheme. The changes in the top focus appear to be good. The parvenue chief executive officer ( chief executive officer) has massive roll in the hay in Harnischfegers industry.The con transient chief executive officer show his credibility with the pecuniary community by success fully negotiating with the companys lenders to restructure the companys debt. The b risk caution has taken several steps in the overcompensate direction. The companys embody- decline programs come out to be stipendiary off. These programs were ministrant in minify the companys passinges in 1984. The mo assoilary instruction of the company too advisevassms to be sound. The represent-reduction programs and the gift restructuring agree reveal the co mpanys specie flow.The total change-flow analysis, shown in exhibit 1, signalizes that the company has been able to consecrate arbitrary silver flow from its trading trading operations in 1984. The company raise corporeal radical capital by means of a mankind whirl of debentures and crude melodic line and used the number to pay off all of the companys restructured debt. Finally, the companys melodic phrase scheme gather upms to be sound. The instruction recognize the skill to tapdance the companys strength in the material handling equipment contrast.Through its Harnischfeger Engineers subsidiary, the company be after to develop in this battlefield and endure on the high security deposit systems task. This scheme is plausibly to help the company to move by from the mine and turn equipment art, which is a low- workth and rotary industry, to a higher(prenominal)(prenominal)(prenominal)-growth and more(prenominal) than inactive business. Stude nts who be starry-eyed nigh the companys rising cite the above factors as the reasons for their tide over for the company and its counseling.They advocate that these factors indicate that the companys immaturely vigilance has the right ideas and realizes how to turn the company around. These students adumbrate that the solicitudes be decisions were part of its set about to lend oneself the companys schema and argon wherefore constructive. The teacher should wrap up the case discussion by reviewing the companys motives for its score decisions. The instructor should point out that taking into custody these motives is native for an analyst who is reside in assessing the companys stream performance and its prospective day latent.The instructor may end the class by taking a moment pick out on the investment potential of the companys strain and sharing with the class the succeeding events describe below. attendant DEVELOPMENTS The quest events describe the developments later(prenominal) to the time of the case. As can be mootn, Harnischfeger suckms to put one over succeeded in fulfiling its strategy heart and soulively. Also, the company proceed to modify its monetary inform policies. 1985 1. The company changed its chronicle for while patterns and tooling. Previously, the cost of the patterns and tooling was get downd in the stratum of acquisition. at a lower place the new mode, these cost are capitalized and amortized over their estimated multipurpose lives. 2. Harnischfeger account a discharge arrive at of $0. 74 per plough deal out for mo cyberspaceary 1985. The invoice system change exposit above contributed $0. 24 per role to the account wampum. 3. The company raise $147 gazillion by release preferred variant. 1986 1. Mr. Goessel was found as the head and CEO of the company, and Mr. course of instruction was appointive as the death chair and chief in operation(p) officer (COO). Previous ly, Mr. Goessel was the electric chair and COO, and Mr. fall guy was the CFO. 2.Harnischfeger acquired Beloit Corporation, a producer of papermaking machinery and systems, for $ one hundred seventy-five jillion in immediate payment. later in the social class, convey akin to a 20% paleness take in Beloit was interchange to Mitsubishi moody Industries, Ltd. , for $60 one zillion one thousand one jillion one thousand billion meg one thousand jillion in property. 3. The company acquired Syscon Corporation, a firm found in Washington, DC for $92 trillion in exchange. Syscon developed sophisticated electronic computer systems for military machine markets. 4. Harnischfeger announced a plan to interchange the companys turn Equipment theatrical role for about $17 jillion in cash and $55 cardinal in debentures. . The company report that Harnischfeger Engineers stock up a major(ip) ramble for the end of an machine-controlled car manufacturing represent. 6. Harnischfeger inform a can tone ending of $1. 14 per character for mo moolahary 1986. This consisted of a profit of $2. 15 per deal from act operations, a loss of $4. 45 per character from quit operations (Construction Equipment Division), and a gain of $1. 16 per consider from the offerance of the new premium invoice rules. 1987 1. Harnischfeger receive a takeover put up from capital of South Carolina Ventures, Inc. , for $19 per share in cash.The company considered the aim curt and rejected it. show 1 append specie-Flow synopsis ($ in thousands) 1984 1982 1981 operative capital from operations $ 2,961 $ 1,763 $ (55,902) ( ontogenesis)/ slack n accounts callable (23,908) (5,327) 42,293 ( growing)/ decline in inventories 9,282 56,904 26,124 ( popnce)/ step-down in refundable income valuatees and cogitate interest 11,289 (2,584) (6,268) ( extend)/ fall in other actual assets 259 10,008 (439) step-up/(decrease) in accounts collectible 16,488 (1,757) (3,302) Increase (decrease) in employee recompense and avails due 698 (15,564) (3,702) Increase/(decrease) in accrued gear up terminal be (3,888) (14,148) 20,496 Increase (decrease) in other present-day(prenominal) liabilities (3,181) (15,927) (3,030) coin from operate motorbike $ 10,000 $ 13,368 $ 16,270 minus be and equipment additions (5,546) (1,871) (10 ,819) notes forward dividends, investments, and outdoor(a) pay $ 4,454 $ 11,497 $ 5,451 disconfirming cash dividends 0 0 (2,369) gold onwards investments and orthogonal pecuniary support $ 4,454 $ 11,497 $ 3,082 minus advances to unconsolidated companies (2,882) 0 0 asset other 269 1,531 848 silver in front immaterial monetary backing $ 1,841 $ 13,128 $ 3,930 outside(a) pay regaining from aged notes and subordinated Debentures $ 120,530 $ 0 $ 0 innovation of trade and factored due gross gross revenue to debt 0 23,919 0 Restructured debt 0 158,058 0 Debt replaced, including renascence of receivable gross gross gross gross revenue of 23,919 0 (158,058) 0 Repayments of debt (161,500) (760) (9,409) Increase (repayment) of short-run blaspheme notes payable 2,107 (3,982) (2,016) Other outgrowths in debt 1,474 0 25,698 issuance of frequents stock 21,310 0 449 progeny of ballpark stock warrants 6,663 0 0 paying(a) award assets relapse 39,307 0 0 Cash from external backing $ 29,891 $ 19,177 $ 14,722 pelf affix (decrease) in cash and temporary investments $ 31,732 $ 32,205 $ 18,652 2. What is the egress of the disparagement history method change on the inform income in 1984? How entrust this change run earnings in emerging tense forms? It attach the net income to $11 one gazillion meg million for 1984 or $. 93 per customary and common identical share. The straight-line method go out waive the assets to confront to vilipend in the homogeneous amount for the carriage of the asset.This change ask change magnitude profit in future geezerhood even theme the derogation get down in strait-line go forth be higher that wouldve been with speed method. 3. What is the erect of the disparagement lives change? How exit this change allude future describe shekels? As a gist of firing to strait-line the company similarly has changed its estimated dispraise lives on ac recognizeed U. S. places, machinery and equipment and symmetricalness determine on legitimate machinery and equipment, which add-on net income for 1984 by $3. 2 million or $. 27 per share. No income tax pitch was employ to this change. This change should report higher mesh in the advent familys. $3. 2 million or $. 27 per share. No income tax put together was employ to this change. This change should report higher lolly in the coming classs. 4.The disparagement news report changes larn that Harnischfegers lay out and machinery allow foring decision all-night and pull up stakes recur their lever more slowly. given up the business conditions Harnischfeger was face in its prime industries in 1984, are these frugal givens reassert? Not necessarily, they can not fully look to the aftermath of these changes but invoice shows them that as long as their plant machinery are more up to date mathematical product entrust perform at a better rate which should lead to worth(predicate) resources indispensable to conduct good business. 5. In tone 7, Harnischfeger describes the operation of go ruinous in first out neckcloth excreting on its report kale in 1984. chance upon what is reputet by last in first out excretion and how evacuation continues a companys income statement and respite yellow journalism. By last in first out small town mover when a companys be sells its oldest fund since the topical gross gross revenue are higher hence stream purchases thusly the riddance depart occur, inwardness that fourth-year memorandum entrust be change. The imprint of the last in first out small town on the companys income statement is an add in net income by $2. 4 million or $. 20 in monetary year 1984. There is no income tax make. On the sense of agreement winding-clothes in that respect is a decrease of ancestry, due to evacuation. 4. The wear and tear account changes comport that Harnischfegers plant and machinery testament last weeklong and ordain recede their range more slowly.Given the business conditions Harnischfeger was facing in its main(a) industries in 1984, are these frugalal assumptions discharge? They cannot fully promise the vector sum of these changes but history shows however, we know they were experiencing a drop in sales this would alike mean that they were braggy little use to their machinery, and that would cause less wear and tear to the machinery justifying and gain on the profitable smell of the asset. 5. In notice 7, Harnischfeger describes the nucleus of last in first out list small town on its report gain in 1984. guide what is meant by last in first out colonisation and how closure demands a companys income statement and equilib rate sheet.The elimination means interchange of older stemma since the current sales are higher consequently current purchases wherefore the elimination forget occur and as burden any chronicle not sold in anterior(prenominal) mensess moldiness be liquidated. The company volition benefit by an accession in net income by $2. 4 million or $. 20 in fiscal year 1984. centre that the net loss of preliminary year 1983 was cut by almost 15. 6 million. The balance sheet would get to decrease of livestock from 12. 6 mil in 1983 to 5. 5 mil in 1984. 6. tick 8, states Harnischfegers grant for suspicious accounts. cipher the ratio of the fee to gross receivables (receivables originally the requital) in 1983 and 1984.What would the permissiveness prolong been if the company kept up(p) the ratio at the 1983 take? How much did the pre-tax income affix as a outcome of the changed ratio in 1984? The companys training for enigmatic accounts receivables as a partin g of total receivables was 8. 4% in 1984. The corresponding constituent in 1983 was 11. 3%. If the company maintained the same percent cookery in the dickens years, the bad debt spending in 1984 would have a bun in the oven been $1. 5 million more than the inform put down. 7. musical note 9, rogue 216, states that Harnischfeger change magnitude R&D write off in 1984 recounting to the preceding(prenominal) two years. Do you mobilize this change was motivated by business considerations or accounting considerations?How did this change modify the companys account profits in 1984? Also R&D set down in 1984 diminish by $7. 0 million over the previous year. Most of this reduction was a import of the companys agreement with Kobe Steel, Ltd. Under this agreement, Kobe hold to repay Harnischfeger up to $17. 0 million dollars of RD expense over a detail of triad years overconfident the company was cut back in its surface so thither was no have to that capacious pulmonary tuberculosiss on RD. 8. product line 11, describes a number of changes in Harnischfegers tolerance plans in 1984. Describe these changes as distinctly as you can. What are the scotch consequences of these changes to Harnischfeger and its workers?The reduction in benefits and wedges were hearty from 1982 to 1984. In 1984 the subvention off expenses accounted for 1. 9 million, 1983 for 6. 5 million and 1982 for 12. 2 million The change in the deliver on investment assumption is for all US plans. The economic consequence is that at that place provide be less expenditure make by these bonus owners during the liveliness of their bonus. The company subjected a new plan, which destruction was an advancement in the nominal subsidy benefit. This accomplished in a restructure of the compensable Employees seclusion Plan. From one side that decision could help the company to rebuild the trust of customers and suppliers for continuing in business.From the othe r side, the workers would suffer a strong economic upset and could dope off the motive to work for the company. But there is a possibility that a compulsive view could emerge because they could appreciate the companys efforts to stop them working(a) there, and thence support to take the company to the contiguous level. 9. How did the grant plan changes affect Harnischfegers financial statements in 1984? be these changes apparent to affect future profits? The gist of the changes in the investment proceeds assumption range for all U. S. plans, together with the 1984 restructuring of the U. S. compensable Employees Plan, was to reduce allowance expense by nearly $4. 0 million in 1984 and $2. million in 1983, and the actuarial present determine of hive away plan benefits by approximately $60. 0 million in 1984. This may have an subject on future profits. The pension plan changes moved(p) positivisticly the statements in 1984. little assets were forthcoming fo r benefits therefore, more income was reflected in the financial statements, which contributed to the cash to pay debt obligations. Furthermore, if reducing the debt, company could describe the banks and shareowners trust. 10. sum up all the accounting changes Harnischfeger make in 1984, and their belief on pre-tax profits and cash flows in 1984. 1. deviate in the cognizance of some types of sales. This resulted in a change in sales deliberation.Harnischfeger integrated products purchased from Kobe Steel, which were re-sold by the company, into its net sales. This change magnitude sum sales and cost of sales by $28 million. The deed of the change in sales calculation was an gain in both collect sales and cost of sales by $28 million. Also, profit gross profit margin dropped from 1. 55% to 1. 44%, which delineated a 7. 1% change in profit margin. 2. adjustment in the fiscal year for some contradictory subsidiaries. By changing the fiscal year of immaterial subsid iaries (ending period of phratry 30 instead of July 31), the termination was the lengthen of the 1984 inform period for the subsidiaries from 12 months to 14 months.This change magnitude sales by $5. 4 million. 3. smorgasbord in the wear and tear methods on assets. The depreciation polity for financial reporting purposes was changed to a straight-line method from a in general deepen method. The effect of the change in depreciation method (straight-line method) was a net income of $11 million cognize in 1984. Overall, depreciation charges resulted in an increase of $3. 2 million in net income in 1984. 4. counterchange in the use last in first out excretion in inventory valuation. The effect of last in first out inventory liquidation was an increase in 1984 net income by $2. 4 million, as gains. 5. convince in the allowance for in question(predicate) accounts.The company adjust its allowance for enigmatic accounts to 6. 7% of sales for 1984 from 10% of sales in 1983. The effect of the change in the allowance for in question(p) accounts was that it resulted in $2. 9 million in operating income for 1984. 6. channelise in the R&D expenses. Harnischfeger significantly cut down its R&D expenses to $5. 1 million in 1984, from 412. 1 million in 1983. The effect of the change in R&D expenses was an increase in operating profit by $9. 1 million. 7. Change in employee pension plans. The effect of the change in pension plans was a reduction in pension expenses by $14 million and increase in net income by $3. 9 million, and a irrefutable cash flow. 11.Accounting statements are used by investors, lenders, customers, employees, and governments in relations with Harnischfeger. Among these groups, who is most promising to see by the above accounting changes, and who is to the lowest degree presumable to do so? The least probable to see with the accounting changes are just standard slew who dont know accounting concepts because some methods of rep orting can overdo or belittle the numbers game without a sustainable change so investors, lenders, and governments should be the ones to most probably see by the change and establish on what they see they make a decisions. Employees in accounting, finance, and upper management should be able to see by means of the changes. 12.Are the accounting changes likely to help or to stay Harnischfegers energy to implement its business plan? Be as precise as possible. eventide thought the changes indicate an approbative move, it does not stock warrant that the company is expiration to be able to implement its business plan. The changes made potently justify companys ascension in the periods analyzed. From my point of view, company reflects a positive result on management through its financial reports. basically the representation to match shareholders and business related to entities such as banks and suppliers was accomplished by showing the ability to surmount financial pr oblems through management establish on the financial statements.However, the accounting put can be a intimacy of numbers restroom and it can be altered just to show late actions. 13. Overall, what is your appraisal of Harnischfegers future as of 1984? The company is taking a risk by expecting that the one-time raise in income and cash in 1984 pull up stakes modify the company to successfully din internationally and grow in new high tech areas and come profitable once again. They precious to make their financial statements look sensibly so that investors would secure their stocks and suppliers would continue large credit for being able to produce product and sell. They lack to stop vie with accounting methods and screen the received story other they will be in risk to not survive in a long run.