Making Accounting Connect with Students: Look at Publicly Traded Companies


Bennet Tchaikovsky, CPA, Esq. is of our guest authors who shares his instruction successes with our professors. This is a four part article series on to how to make accounting more personal to students.

I love to teach accounting and constantly try to make accounting courses more personal to students. The continual challenge I have found with most textbooks is the textbook’s natural inability to immediately create a direct connection with students. I am hoping that this series of articles can be used as a starting point for accounting instructors and others to share their experiences so that we can collectively attract more students into the accounting profession.

In part 1 of this series, “Making Accounting Connect with Students”, I’ll talk about starting up the Smartsheet and visiting frequently (just don’t hack it)! 

Use Smartsheet, Google Sheets or other collaborative documents in the classroom

My handwriting qualifies me to be a physician. Initially, I used Microsoft Excel spreadsheets in class (all of your students should be taking this course- it’s on the CPA Exam starting in 2018) to walk through problems. However, since that time, I’ve used Smartsheet and Google Sheets in the classroom for student collaboration.

Interactive spreadsheets enable students to look at the spreadsheets in real time on their laptops and create a study guide. These tools are generally free for academics and students and more importantly, by using these collaborative sheets now, you are having students use what most employers are now using for project management in the workplace.

Your greatest resource is You will have an immediate connection with students. 

When I introduce financial statements, I “freestyle”. I ask students to give me a publicly traded company to review their financial statements. By taking direction from the students, I have empowered students to start the in-class conversation. I review the financial statements, going over balance sheet categories and income statement categories for the company they selected, and they’re immediately hooked.

For example, when Apple, Inc. is selected, students are amazed as to their total assets (also the rare accounting humor in stating that Apple has approximately $345,200 in total assets….a quick pause reveals that the numbers reported are in millions: $345.2 billion in total assets). Similarly, Amazon’s financial enables students to visualize how Amazon now accounts for 43% of total online U.S. retail sales.

Reviewing financial statements also reveals to the students that no two companies are alike in terms of financial statements and greater differences exist depending on the industry the company operates within. Also, you will be surprised to see the reaction from the parents of students. After showing financial statements for large publicly traded companies, students generally share this with their parents outside of the classroom, who are somewhat shocked that their son/daughter learned about 10-Q’s and 10-K’s in class. Students also understand that is a great resource to learn about a company if they are applying for a position there. 

By reviewing publicly traded companies financial statements in class, your students will understand the limitations of financial reporting.

When reviewing the financial statements of Macy’s, Macy’s looks troubled. Macy’s has goodwill and intangible assets on their books that if removed would cause the company’s assets to roughly equal its liabilities. Given the state of the retail sector, removing goodwill and other intangibles does not seem unreasonable.

However, Macy’s has real estate. The real estate (including a square block in Manhattan) was purchased a very long time ago and is being reported at the historical cost. Under U.S. GAAP, the current value of Macy’s real estate will not be reflected until there is a sale (not at Macy’s) or other transaction. Therefore, Macy’s illustrates to students that the financial statements are a starting point and may not accurately reflect the true value of a business (some analysts estimate Macy’s real estate holdings to be at 21 billion). 

Business practices will come to life when looking at publicly traded company financial statements.

When teaching Accounts Receivable, I strongly emphasize that businesses need to perform extensive credit checks on clients as it’s cheaper to do your due diligence up front than to hire attorneys to collect later.

A few years ago, I was reviewing The Home Depot, Inc. and Lowe’s Companies, Inc. (“Lowe’s”) financial statements. After creating common sized financial statements, we reviewed the current ratio and quick ratio. For Lowe’s, the quick ratio is very low (cash and short term investments relative to current liabilities). I joked that as a vendor, you may want to be careful to not be paid in doors or lighting fixtures.

Then a student brought the situation to light: her husband worked for a carpet installation company outsourced by Lowe’s that had not been paid in 120 days and in turn created a very stressful situation for the company. I do not know if this is true and to be fair to Lowe’s, I did not ask them for their side of the story, but given Lowe’s level of payables to their cash and short term investments, Lowe’s serves as a cautionary tale prior to dealing with companies. As a side note, Lowe’s recently filed a shelf registration to raise additional capital. 

Use publicly traded companies to illustrate challenging concepts.

For my intermediate course, I use links to publicly traded company financial statements to illustrate certain situations so that the students can better visualize complex accounting concepts. For example, companies used to illustrate: 

How discontinued operations are presented, CBIZ
A variety of income statement categories, Alphabet (Google)
Complex corporate structures, Cheniere

Did I work as the CFO for any of these companies? No. Rather, using google search, I was able to locate companies with discontinued operations, etc. 

Expose students now to the auditor’s final product.

By reviewing publicly traded companies’ financial reports, students will understand the end product management creates, and what attorneys review and external auditors review or audit. By exposing students now to and teaching them how to research filings, students will be better able to understand filing types and how to research companies.

Additionally, when an internal accountant is asked to draft a footnote for the financial statements, ultimately they will start by using another company’s footnote as a starting point. 

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