Best Buy: Financial Analysis
Best Buy: Financial Analysis
Consisting of both Domestic and International operations, Best Buy has been able to successfully maintain as a multinational merchant of products from appliances, software and electronics. Although there are several brands under Best Buy, the organization continues to expand and offer a multitude of products to consumers.
With a return on assets of 7.3% in the past 12 months, Best Buy has directed the way towards advancement product selection and multimedia campaigns (Forbes). It was in May of 2009, for example when Best Buy was proclaimed as the primary electronics store which was escalated after Circuit City went out of business. The average Gross Profit Margin for the past 5 years for the company has been at 26% which means that it has a little over a quarter of the revenue minus the related expenses that occurred is what Best Buy has at the end of the day (Forbes).
The Gross Profit Margin helps foresee how it will pay additional costs and future savings. The leverage ratio for the past 12 months is at 2.8 which is also known as the debt-to-equity ratio (Direct Finance). Such ratio helps illustrate how much debt per equity in the company is calculated and how Best Buy is meeting its financial obligations.
With its fixed costs and following its reach at the breakeven point, Best Buys financial trend it so increase its operating revenue while the output is improved in comparison to its competitors who may possess higher variable costs (Forbes). Although the asset turnover occurring in the past 12 months is at 2.9, the costs have already incurred, so every sale Best Buy makes following the breakeven point, it then would transfer over to the income for operations (Forbes). Based on the ratio of asset, the future of the company has evolved from the previous 5 years of trying to steer away from increasing its ratio high variable costs but making a goal to increase the return on equity which can be escalated by the operating
Consisting of both Domestic and International operations, Best Buy has been able to successfully maintain as a multinational merchant of products from appliances, software and electronics. Although there are several brands under Best Buy, the organization continues to expand and offer a multitude of products to consumers.
With a return on assets of 7.3% in the past 12 months, Best Buy has directed the way towards advancement product selection and multimedia campaigns (Forbes). It was in May of 2009, for example when Best Buy was proclaimed as the primary electronics store which was escalated after Circuit City went out of business. The average Gross Profit Margin for the past 5 years for the company has been at 26% which means that it has a little over a quarter of the revenue minus the related expenses that occurred is what Best Buy has at the end of the day (Forbes).
The Gross Profit Margin helps foresee how it will pay additional costs and future savings. The leverage ratio for the past 12 months is at 2.8 which is also known as the debt-to-equity ratio (Direct Finance). Such ratio helps illustrate how much debt per equity in the company is calculated and how Best Buy is meeting its financial obligations.
With its fixed costs and following its reach at the breakeven point, Best Buys financial trend it so increase its operating revenue while the output is improved in comparison to its competitors who may possess higher variable costs (Forbes). Although the asset turnover occurring in the past 12 months is at 2.9, the costs have already incurred, so every sale Best Buy makes following the breakeven point, it then would transfer over to the income for operations (Forbes). Based on the ratio of asset, the future of the company has evolved from the previous 5 years of trying to steer away from increasing its ratio high variable costs but making a goal to increase the return on equity which can be escalated by the operating
References: Direct Finance. BEST BUY INC Financial Overview. Source found on website as Financial Analysis. AOL Inc., 4 August, 2010. http://www.dailyfinance.com/financials/best-buy-incorporated/bby/nys Forbes. BEST BUY CO INC (NYSE:BBY ). Ratios & Returns. Source found on website as Financial Profile. Forbes, 6 August, 2010. http://finapps.forbes.com/finapps/jsp/finance/compinfo/Ratios.jsp?tkr=BBY