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Essay / Research Paper Abstract
This 6 page paper is a financial analysis of Best Buy for the years 2007 – 2009 using ratio analysis and looking at the changes in performance over the last few years. The bibliography cites 3 sources.
Page Count:
6 pages (~225 words per page)
File: TS14_TEbestbuy09.rtf
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Unformatted sample text from the term paper:
few years have seen major changes in the market as there have been changes in the economic environment and increasing competition. Looking at the performance of the firm this
can be analysed looking at the financial results. There have been some changes with increases sales and costs and in 2008 there is a decrease in the net profit, as
seen in table 1 2007 2008 2009 Change in 2008 Change in 2009 Revenue 35,934 40,023 45,015 11.38% 12.47% Cost of goods sold 27,165 30,447 34,017 12.08% 11.73% Other
costs 33,935 37,862 43,136 11.57% 13.93% Net profit 1,999 2,161 1,879 8.10% -13.05% Ratio analyses can be very use to assess the performance in this context. For this the first
ratios considered will be the profit ratios. The first ratio is the gross profit margin, The gross margin is expressed as a percentage. This is the level of revenue that
remains when all of the direct costs for producing the goods or services are deducted form the revenue. This indicates the level at which direct costs account take up revenue.
This showed a slight increase as it was 24.4% in 2009 and 23.9% in 2008, this may be partly explained by the increasing strength of the dollar which helps to
reduce the costs of some inputs even though there were rising prices. The operating profit margin is also expressed as a percentage. This is the revenue after all
direct and indirect costs have been deducted. A well as the direct materials, there are also the indirect costs such as wages and administration, these are also known as the
overheads. In 2008 this was 5.4% and in 2009 it reduces to 4.2%, there were increased costs in the home market including transportation costs and the costs employment, which contributed
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