Annual Report Project
Summary and Conclusions
1. Company’s Performance:
(Gross Margin, Profit Margin, Return on assets, Return on shareholder’s equity, Return on Market Equity)
* In recent years , Best Buy Co., Inc. has seen revenues shrink from $50705M USD to $45085 USD, and the company‘s net income from $1317USD to -441M USD.
* Poor Inventory Management
* Total assets turnover is 2.99 in 2013, total assets management of the company is seems higher than Store competitors Radioshack, hhgregg , Aaron’s, Inc.
* Inventory Turnover is turn down year to year 7.19 to 6.08
* Low Account Receivable Turnover ratio implies, the ...view middle of the document...
* Best Buy must master in at least one of these value streams Operational Excellence, Customer Intimacy or Product Leadership.
4. How company is doing in relation to the industry averages
5. Overall Assessment of the Company’s Operations and Outlook
* Company size and extensive (domestic and global) distribution network
* Core competency in technology services through Geek Squad
* Well-known brand
* Strong past performance
* Robust internet presence and online infrastructure
Major governance Issues
Recent senior leadership turnover in the midst of a crisis (governance, market shift)
(in 2012, Best Buy pulled out of the UK ,removed the founder and chairman of the board, closed many stores, reshuffled management and is trying to deal with its own governance issues
In addition, BB is facing a significant market paradigm shift towards online e-commerce, mobility, cloud computing, internet taxation, music and video streaming.
Weakening financial situation
Too many brands; CinemaNow, Geek Squad, MagnoliaAudio Video, MindShift and Pacific Sales
Poor inventory management
Poor Capital Structure
Declining sales revenues