Case studies

The learning outcomes of this study are to examine the financial performance of Bangalore Metro Rail Corporation Ltd. (BMRCL) during past five years, to compare the financial performance with the initial projections, to identify the causes of deviations in the performance, to recommend the measures to improve financial performance and to apply the learning from the BMRCL project to other similar upcoming projects in India.

BMRCL has been struggling to perform as per projections made in the initial detailed project report. The situation has further worsened because of the COVID-19 pandemic and its post-impact on the overall economic level of activity. Ramana Rao, the consultant for infrastructure projects, was worried after reading a news article which deemed the project a white elephant. Various articles published in the newspaper also reported that BMRCL was incurring a loss of Rs 45 lakhs every day. The consultant worried about the sustainability of the project. He wanted new ideas and plans which could turn around these losses and convert them into profitable ones. He, however, does not have any immediate plans to execute and is therefore in a dilemma about how a project that was launched with so much fanfare could be made profitable. Because of COVID-19 pandemic, BMRCL’s financial situation, which although improving, had taken a significant hit. It looked like the corporation might need government assistance to cover its losses. The transport utility suffered a loss of Rs 170 crore, as a result of a decline in ridership as well as other revenue sources including parking fees and leasing revenues. This amounted to a daily loss of Rs 1 crore. The pressure on revenues was putting the officials in a tight spot about meeting the company’s debt obligations and market borrowings.

The case study aims to enable participants to understand financial performance and viability of large-scale projects such as metro rail in India.

Teaching notes are available for educators only.

CSS 1: Accounting and Finance

The case has the following learning objectives:

1. understand the various types of comparisons that are possible between groups over time and across space;

2. evaluate a policy intervention using relevant data and different methods; and

3. understand the meaning of the phrase “controlling for other relevant factors” in regression and non-regression contexts.

The difference-in-differences (DID) approach is a useful tool for making meaningful comparisons. This case tries to provide a non-technical introduction to the approach using a basic comparison of crime rates among districts in Punjab (Pakistan's largest province). Being the most populous region of the country, Punjab faces many governance challenges, and street crime is one of them. (Exhibit 5 provides additional information about the geographical and administrative setting used in this case study.) In 2016, Chief Minister Shahbaz Sharif established the Dolphin (police) Force in different locations to improve urban patrolling and reduce street crime. There were debates about the effectiveness of the Dolphin Force (DF).

Those who are skeptical of DF point to various situations that were handled incorrectly by DF personnel, as well as other administrative and operational problems in the initiative. Optimists believe it is beneficial and want it to be expanded to other districts and regions. The threat of street crime claims many lives and, according to optimists, necessitates the formation of a special force. Whether the huge resources invested in the DF worth their lot or not can be known through sound statistical analysis that can identify the difference in the rate of crime because of the DF. In this instance, the case provides information to answer the following question:

Is there a significant difference in crime rates between areas where the DF is operating and districts where it has not yet been installed?

In quantitative/statistical analysis classes, the case can be used to teach the DID technique to MBA/MS Applied Statistics/Applied Data Analysis students. It can also be used in undergraduate Econometrics classes.

Teaching notes are available for educators only.

CSS 7: Management Science.

Macro-Economics.

Undergraduate and MBA.

The COVID 19 pandemic-related restrictions devastated South Africa’s economy in 2020 and although the restrictions were generally less damaging than in 2020, the government had to budget for vaccinations and rebuild the economy. Public service unions had just announced that they were demanding an increase of 4% above inflation for their members and that they were preparing for a strike. They were bitter about the fact that the South African Government had withdrawn from the last year of a three-year wage agreement in February 2020 and their members had not received an increase for the two years. These demands and Finance Minister Mboweni’s response to them had to consider the structural and cyclical impact on the fiscus and economy.

The learning outcomes are as follows: understand the general objectives of fiscal policy and stakeholders’ interests; understand the tradeoffs in fiscal policy and the implications of taking a position; and make recommendations based on reasoned judgements about those recommendations.

Undergraduate and MBA level courses on Macro Economics.

Teaching notes are available for educators only.

CSS 10: Public Sector Management.

The case explores Ayesha’s reasoning, who is also a financial expert, regarding how she approaches the question of Riba (interest) so that she can maximize her financial returns and remain true to her religious identity. The discussion in the case revolves around alternate rationalizations as to why Riba (interest) continues to remain important for many Islamic investors.

Historically, the prohibition of Riba (interest) prevented the exploitation of the poor borrower who was charged exorbitant interest rates by wealthy lenders. In the modern day, a banking system which operates in a regulated setup and charges market-based interest rates, the rationale regarding the exploitation of the poor seems less compelling. Furthermore, other economic realities such as inflation and currency fluctuations further lend support to protecting one’s investments through prudent financial decisions. In this case the authors approach this decision regarding the prohibition of Riba (interest) in Islam from the point of view of the protagonist, Ayesha Bhatti, who is religiously conscious and is faced with certain personal investment choices.

The case focuses on one of the core issues of Islamic finance (IF), that of the prohibition of charging Riba (interest) on debt and the reasons behind this ruling. The relevance of this prohibition to modern day financial markets is essential to understand IF.

Teaching notes are available for educators only.

CSS 1: Accounting and Finance.

The learning outcomes are as follows: How to establish credibility of data sources; measurement scales of data; the importance of descriptive statistics and generating the following based on the type of data: mean, median and standard deviation; graphical methods; and test for differences: t-test and analysis of variance.

The case is set during the COVID-19 pandemic and the South African Government’s response to the pandemic. A brief timeline is provided as part of the introduction to the case study, with the following being a timeline of the events: 14 March 2020, 114 South African citizens were repatriated from Wuhan the epicentre of the COVID-19 outbreak; 15 March 2020, South Africa’s President, Cyril Ramaphosa declares a National State of Disaster, and this includes various measures to protect against the spread of COVID-19, while the health-care system is geared up to deal with the pandemic. Among the measures implemented, travel bans from high-risk countries and closing of air-traffic, closing of land ports and banning of gatherings of more than 100 people; 23 March 2020, President Cyril Ramaphosa announced a national lockdown beginning on 27 March 2020 for three weeks; 9 April 2020, President Ramaphosa extends the national lockdown by a further two weeks. The World Health Organisation (WHO) had commended South Africa on the swift action taken to curb the spread of the virus. Individuals and organisational leaders are grappling to make sense of the spread of the virus, and the barrage of the information that is being communicated through multiple channels, formal and informal. To make sense of the information, the case is premised on getting access to the raw data and conducting the analysis based on the publicly available data. The central requirement of the case is to compare the number of positive cases per million, based on the population data contained in the data set, of South Africa to a comparable country.

Post-graduate students learning statistics as part of a degree programme. The case assumes no prior statistics knowledge and therefore is aimed at teaching the importance of the basics of statistical analysis and then progressing to tests for differences.

CSS 7: Management Science

Teaching Notes are available for educators only.

The learning outcome is to understand the difference between correlation and causation.

The case is set during the period of the COVID-19 pandemic, globally a search for effective treatments were underway. An initial forerunner that was being considered was Bacille Calmette-Guerin (BCG), given its effectiveness in the treatment of tuberculosis and other pulmonary-related infections. While there were a lack of randomised controlled trials, initial data from publicly related secondary data sources indicated that, in countries with BCG inoculation policies, the severity of the spread and mortality of COVID-19 was muted. The case is centered around the available information on BCG and COVID-19.

Post-graduate students learning statistics as part of a degree programme. The case assumes no prior statistics knowledge and therefore is aimed at teaching the difference between correlation and causation.

CSS 7: Management Science

Teaching Notes are available for educators only.

The case describes the fall of Eskom, which in 2001 was named the Financial Times’ Power Company of the Year, but by 2019 was suffering from “systemic corruption, malfeasance, fraud and state capture” that had “compromised the credibility of the organisation and eroded investor confidence”. Eskom’s incompetent management lays the ground for reasonable doubt as to whether the force majeure notice was indeed irresistible. The case suggests several methods available in financial markets to hedge risk – but to what extent are these relevant and appropriate? The main objective of the case, however, is to examine and assess the criteria required to claim force majeure. Two aspects are questionable: Was the virus unforeseeable and was it irresistible? Eskom is “bleeding” R².5m per month because of significantly reduced electricity demand, and while it clearly benefits Eskom to break their supply contract, the consequences for Exxaro are far more dire. And, if carried to conclusion, how would such actions impact the entire economy?

In April 2020 South Africa’s stated-owned electricity utility Eskom sent a pre-cautionary force-majeure notification to Exxaro Limited’s Grootegeluk Coal Mine. The notification, citing COVID-19 as an unforeseeable, external and irresistible event, would have disastrous consequences for the mine’s 25 m tonnes pa coal contract to supply Eskom’s Medupi power station. Not only was the legality of the force-majeure questionable, it was unethical, and not in the spirit of President Ramaposa’s call to businesses to continue paying contractors. The case briefly describes Eskom’s troubled history following South Africa’s 1994 democratic election. It examines the force majeure clause common in contracts, and questions whether COVID-19 meets the criteria of an “unforeseeable, external and irresistible” event.

MBA and Executive Education

Teaching Notes are available for educators only.

CSS 7: Management Science.

The case describes the origins of money, touching on the gold standard, the Fed’s 1942 purchase of US debt to fund the “war effort”, Bretton Woods (1944), Nixon’s 1971 pulling the currency peg and descent of money from gold to fiat. It also touches on theories of inflation and deflation, quantitative easing (QE) post the 2008 crisis and the “swamp” of (unorthodox) modern monetary theory (MMT). Aside from providing a brief history of monetary policy and economics, the case study seeks to widen students’ understanding of key economic issues including: fiat money, QE, government funding mechanisms, taxation, economic stimulation, inflation/deflation – and of course, the need for an ombudsman to limit excess.

In May 2020, South Africa’s deputy finance minister David Masondo announced that he would support the South African Reserve Bank’s lending to the government. This statement followed President Ramaposa’s earlier announcement of a R500bn COVID-19 stimulus package. The case explores the economic history of money, from barter to gold to cryptos. The case examines the origins of central banks’ printing of money, initially to support the Second World War effort and more recently the 2008 global financial crisis and now the COVID-19 crisis. In particular, the case raises the question of central bank independence – “democratically elected governments always need money, is it appropriate for central banks provide it? And are there limits?”

MBA and Executive Education

Teaching Notes are available for educators only.

CSS: 1 Accounting and Finance.

Learning outcomes of this paper are to analyse, record and classify financial transactions; prepare unadjusted trial balance; record the adjustment and closing entries and prepare post-closing trial balance; and prepare financial statements.

The case aims to induce users to draw up financial statements from the details provided. The complete accounting process is covered through solving the case. The case follows a start-up company from its first set of financial transactions to preparing the first set of financial statements. The case will help in application of accounting concepts, principles and the processes for recording transactions and preparation of financial statements.

The case is best suited for senior undergraduate- and graduate-level students of management/business schools in the courses of introductory financial accounting, intermediate accounting and financial reporting.

Teaching notes are available for educators only.

CSS 1: accounting and finance.

The purpose of this paper is to understand the situation of Accurate and then to consider possible options for Accurate to face competition in future. Several opportunities are also linked with certain drawbacks and hence by studying the entire mechanism, the decision makers of Accurate may decide on its future direction and how to go about it.

Accurate Weld Arc was established in New Delhi in 1993, his son. The company focused on manufacturing wire drawings and selling to niche customer segment. Due to this, they were operating at a modest turnover. At this juncture, the organization took two critical decisions, first, to enter the welding electrodes market which had a bigger target segment, and second, to hire a Marketing Head who conducted an extensive marketing research to recognize the need of customers and to identify differentiating factors for the organization. Later, the company made further investment in middle-gauge welding electrodes and its turnover climbed in the first year. After that, the company had set up a manufacturing unit in Raipur, Chattisgarh which generated huge profit and is now looking forward to spread its wings in other parts of the country.

This case may be used for postgraduate students, who are doing their specialization in finance and accounting.

Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CSS 1: Accounting and Finance