College kids making millions trading bitcoin and meme stocks has sparked a new interest in financial education. Finance departments have taken advantage of this situation by marketing trading as a career path. There is no reason accounting departments can’t take a similar approach to attract majors. Below is an example article I used in my introductory financial accounting course to spark student interest.
The article describes a college student, Jake Freeman, that made millions buying and selling Bed Bath & Beyond’s (BBBY) stock. It is clear from the article that Freeman came from a rich family that stressed the importance of financial education. Let’s look at what Freeman did to make his millions. We don’t all have rich parents, but we all have access to the same public information that Freeman used.
Discussion Prompt: After buying the stock, Freeman wanted to put pressure on the company to improve its financial position. He sent a letter to the company’s board of directors, warning that the retailer was “facing an existential crisis for its survival” and that it needed to “cut its cash-burn rate, drastically to improve its capital structure, and raise cash.”
Possible discussion questions (reference BBBY 2021 10k):
Who are the board of directors and what do they do?
What is BBBY’s capital structure? How could you analyze a company’s capital structure? What do you think Freeman means when he says it needs to be improved?
Why do you believe that Freeman believes that BBBY needs to raise cash?
Do you think Freeman was an expert trader, or did he get lucky? Why?
The goal is to use media to get students interested in financial statements. So often the focus of introductory financial accounting is on recording transactions. While this is an important function, artificial intelligence is making the ability to read financial statements increasingly more important. If we are going to attract majors, we need to be able to tie the concepts we teach to popular press. It’s more difficult to do this when the focus is on debits and credits.
Mark Edmonds is the author of:
Survey of Accounting
Fundamental Financial Accounting Concepts
Introductory Financial Accounting for Business
Fundamental Managerial Accounting Concepts