Product details

Shanghai Refrigerator Compressor Company, the largest manufacturer of compressors for air conditioners, refrigerators and dehumidifiers in China, announced that it would reduce its holdings with Shanghai Senlin Electrical Appliances Co Ltd, one of its joint ventures. Even though the Shanghai Refrigerator Compressor Company''s other joint ventures have been performing well, the company''s share price had seriously affected due to the unsatisfactory results of this joint venture. An MBA student was trying to assess the impact of the company''s recent announcement on its share price in order to offer investment advice to his father, a large investor in Shanghai Refrigerator Compressor Company. He was especially interested in determining the difference between the accounting methods used for long-term intercorporate investments and the impact on reported performance and eventually on the market price of his father''s investment in the company.