Bed Bath & Beyond (BBBY) Case Study
Rajib L. Mishra & Sukumar Haldar
Corporate Finance (K4115)
Description: The Bed, Bath, and Beyond case requires that students assess the future growth of a company by using financial statement analysis. This is a team project and should be completed in groups of four students. The case questions below are meant to guide you through the analysis. Questions:
1. Assess Bed, Bath & Beyond’s (BBBY) business, operating, and expansion strategies. Are these strategies consistent with one another? What, if any, changes would you make to these strategies? 2. Assess BBBY’s current performance. Evaluate the keys to its current success. How have the important performance measures changed over time? How does BBBY compare to its competitors? What is driving BBBY’s superior ROE? How sustainable are BBBY’s ROE and growth rate? Bed Bath & Beyond (BBBY) Case Study
|Strengths |Weaknesses | |Increase in gross profit margin indicates increase in profitability |Decrease in inventory turnover is a bit concern and slower growth | |and better management. |(Table 1). | |Net working capital increases from FY 1992 to 1993 is an indication |Increase in debt ratio is a concern, which means the firm is | |of good operating performance. |financing more of its assets on debt. | | |Decrease in net profit margin shows signs of increase interest | | |payments meaning more debt. | |...