AAA Spark Meeting of Regions

A Deep Dive into an AI Start-Up Company in the Pandemic

• In Event: Effective Learning Strategies Poster Session A
  In Poster Session: Room 3

Abstract

In this presentation, I will take audience on a roller-coaster ride through the second quarter of 2020, as you help a CEO of an AI start-up company to find external funding, cut costs, and prepare budget in order to weather through the COVID 19 pandemic. Based on drastically-changed business conditions, students assist the CEO to revise budget, apply for PPP loan, decide on payroll cut, and calculate cash burn and cash runway under different scenarios. Topics, including budgeting, grant revenue, cash versus accrual accounting, payroll data analytics, cash burn, cash runway, discretionary cost, variable cost, fixed costs, PPP loans, EIDL loans, company compliance are discussed in the case.
Solving real world problems often sparks students’ interest in accounting. This timely relevant case illustrates the great uncertainty faced by small businesses, the importance of PPP loan to small businesses’ survival, and how accounting information are used by a CEO to plan ahead and to make difficult but necessary HR decisions as the company changes its business model in response to the pandemic. Attendees will see how financial and managerial accounting concepts and analysis are integrated in solving an imminent problem faced by many small businesses in 2020 - survival.

Author

• Li Zhang, University of Illinois at Urbana Champaign