Autozone Inc.

2752 Words Apr 12th, 2013 12 Pages
Baker Adhesives
Jacqueline Lau
Stetson Strifler
Tarleton State University
FIN-403/505, Spring Semester, Sect. 010
Dr. Omar A. Esqueda
April 8, 2013

Table of Contents
Executive Summary.........................................................................................................................3
General Background of Organization..............................................................................................3
Overview of Financial Analysis Tools............................................................................................4
Stock Repurchases and the Benefits They Offer.............................................................................5
Alternative Operating Cash Flow
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Within this case analysis, we will examine Autozone's stock repurchasing program, as well as the mechanics behind it and the benefits it provides to the firm. Additionally, this report will analyze the alternative operating cash flow options Autozone should consider, detailing the benefits and costs of each option. A comprehensive examination of these operating cash flow alternatives will be presented, allowing for the determination of the most viable alternative for the use of Autozone's operating cash flows.
General Background of Organization Founded in 1979 under the name AutoShack, Autozone has grown to become the leading retailer of automotive replacement parts and accessories in the United States, employing nearly 65,000 employees with over 4,800 locations in North America. After changing their name to Autozone in 1987, the company was able to implement the first electronic auto-parts catalogue in the retail industry, helping to establish their dominant position in the market. Because the firm was able to record steady growth for years, it was taken public in 1991, allowing it to be listed on the New York Stock Exchange (NYSE) under the ticker symbol AZO. Along with heavy investments in their retail footprint, Autozone had also developed a refined hub-and-feeder inventory system, keeping in-store inventory levels low while reducing the chance of stock outages. Because of their revolutionary electronic

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