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Safety Products, Inc.: A case in financial analysis of a failing company

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  • Jennings, James P.
  • Henry, Eleanor G.

Abstract

Safety Products, Inc. was a small, private corporation that manufactured acrylic sheet plastic. After a massive fire, the company filed a claim against its business interruption insurance for lost income. The policy covered profits that would have been earned, based on Safety’s financial records, had the disaster not occurred. The insurance company denied the claim on the grounds that Safety Products was not a going concern, and, therefore, there were no lost earnings.

Suggested Citation

  • Jennings, James P. & Henry, Eleanor G., 2008. "Safety Products, Inc.: A case in financial analysis of a failing company," Journal of Accounting Education, Elsevier, vol. 26(1), pages 34-53.
    • Handle: RePEc:eee:joaced:v:26:y:2008:i:1:p:34-53
    DOI: 10.1016/j.jaccedu.2007.07.005
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    References listed on IDEAS

    as
    1. Edward I. Altman, 1968. "The Prediction Of Corporate Bankruptcy: A Discriminant Analysis," Journal of Finance, American Finance Association, vol. 23(1), pages 193-194, March.
    2. Beaver, Wh, 1966. "Financial Ratios As Predictors Of Failure - Reply," Journal of Accounting Research, Wiley Blackwell, vol. 4, pages 123-127.
    3. Beaver, Wh, 1966. "Financial Ratios As Predictors Of Failure," Journal of Accounting Research, Wiley Blackwell, vol. 4, pages 71-111.
    4. Edward I. Altman, 1968. "Financial Ratios, Discriminant Analysis And The Prediction Of Corporate Bankruptcy," Journal of Finance, American Finance Association, vol. 23(4), pages 589-609, September.
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    Cited by:

    1. Ayca Zeynep Suer & Ahmet Turel, 2016. "Understanding Going Concern in Auditing: Seker Poultry, Inc," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 12(1), pages 118-128, February.
    2. Abellán Martínez, Diego & Aledo Martínez, Juana & Macías Dorissa, Marta, 2023. "Aena case study: Privatization of the largest European airport group," Journal of Accounting Education, Elsevier, vol. 62(C).
    3. Kaciuba, Gail, 2012. "An instructional assignment for student engagement in auditing class: Student movies and the AICPA Core Competency Framework," Journal of Accounting Education, Elsevier, vol. 30(2), pages 248-266.

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