Which Takeovers are Profitable: Strategic or Financial?

Paul M. Healy; Krishna G. Palepu; Richard S. Ruback

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Article | MIT Sloan Management Review | summer 1997

Which Takeovers are Profitable: Strategic or Financial?

by Paul M. Healy, Krishna G. Palepu and Richard S. Ruback

Keywords: Integration; Profit; Strategy; Finance;

Format: Print

13 pages

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Citation:

Healy, Paul M., Krishna G. Palepu, and Richard S. Ruback. "Which Takeovers are Profitable: Strategic or Financial?" MIT Sloan Management Review 38, no. 4 (summer 1997): 45–57.

About the Authors

Paul M. Healy

James R. Williston Professor of Business Administration

Accounting and Management

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Krishna G. Palepu

Ross Graham Walker Professor of Business Administration

Accounting and Management

General Management

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Richard S. Ruback

Willard Prescott Smith Professor of Corporate Finance

Finance

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More from these Authors

Supplement | HBS Case Collection | March 2019

Baskits

Richard S. Ruback and Royce Yudkoff

Citation:
Ruback, Richard S., and Royce Yudkoff. "Baskits." Harvard Business School Multimedia/Video Supplement 219-709, March 2019. View Details

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Teaching Note | HBS Case Collection | March 2019

PCAOB Efforts to Improve Audit Quality (A) and (B)

Aiyesha Dey and Paul Healy

Citation:
Dey, Aiyesha, and Paul Healy. "PCAOB Efforts to Improve Audit Quality (A) and (B)." Harvard Business School Teaching Note 119-017, July 2018. View Details

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Case | HBS Case Collection | August 2018 (Revised February 2019)

Revenue Recognition at HBP

Paul Healy and Siko Sikochi

In early 2014, Paul Bills, CFO of Harvard Business Publishing (HBP), sat down with David Wan, the company’s CEO, to discuss budget preparations for the coming year. Bills noted that the performance of Corporate Learning, one of HBP’s three business units, would be affected by a business model change for its largest product that required a change in the timing of revenue recognition. Corporate Learning was in the process of revamping its flagship product, Harvard Manage-Mentor (HMM) from version 11.0 (HMM11) to version 12.0 (HMM12). The revamped software would be hosted exclusively on HBP’s server rather than on its clients’ servers, allowing updates to take place continuously. Given the change, accounting standards required HBP to change the recognition of revenue from the date of software delivery (for HMM11) to ratable recognition over its contract life (for HMM12). As Bills and Wan discussed the accounting change, they recognized that its impact on Corporate Learning’s and HBP’s performance could be material and would have to be reflected in the budget. In addition, they wondered how the new accounting would affect the company’s policy for awarding sales incentive compensation on HMM, as well as how they communicated with employees and the firm’s sole shareholder, the Harvard Business School.

Keywords: Accrual Accounting; Budgets and Budgeting; Revenue Recognition; Financial Reporting; Publishing Industry; Education Industry; United States;

Citation:
Healy, Paul, and Siko Sikochi. "Revenue Recognition at HBP." Harvard Business School Case 119-029, August 2018. (Revised February 2019.) View Details

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Which Takeovers are Profitable: Strategic or Financial?

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