Case 6: the Financial Detective Essay

Finally, in order to complete a more accurate comparison between the two projects, we utilized the EANPV as the deciding factor. Under current accepted financial practice, NPV is generally considered the most accurate method of predicting the performance of a potential project. The duration of the projects is different, one lasts four years and one lasts six years. To account for the variation in time frames for the projects and to further refine our selection we calculated the EANPV to compare performance on a yearly basis.

Entertainmentnow.com is an international Internet retail Website offering an array of books, music, videos, DVDs, toys, and small electronics. The company has historically marketed and sold to individual consumers, but has recently expanded their market to serve corporate and institutional customers as well. The company purchases products from vendors, holds the products in inventory, and then fulfills customer orders directly. This business model is similar to Amazon.com’s, making them one of the company’s main competitors.

The remainder of this note discusses each of the steps in the process and then provides an exercise on the various financial measures that are useful as part of the analysis. The final section of the note demonstrates the relationship between a firm’s strategy and operating characteristics; and its financial characteristics.

In accounting there is much to be learned, about the financial aspects of a business. In the past five weeks I have learned the importance of financial reports and how they relate to the success of an establishment. These reports may include balance sheets and income statements, which help accountants and the public grasp the overall financial condition of a company. The information in these reports is really significant to, managers, owners, employees, and investors. Managers of a business can take and deduce financial

In contrast to Borders Group, Barnes & Noble which is a leading bookstore in the US recorded an 11% increase in their share value in the past year with the introduction of their e-book reader “Nook”. It is clear that Barnes & Noble were not “Myopic” in their approach and were able to retain and even grow their customers as well as profits by embracing a new product.

The bookstore chain has been decreasing in profit in the US over the past 20 years. Most of the books retailers are shutting down their operations and only a few are still operating in the country. Barnes and Noble has become the largest bookseller in the book retailers industry. The firm has integrated its business philosophy into web presence though eBook marketplace. This business strategy assisted the firm to be able to reach a large scale customers and remain as a strongest competitor in the book retailing market.

Financial performance measures, such as operating income and return on investment, indicate whether the company’s strategy

A vertical and horizontal analysis of each company's balance sheet and income statement in this particular case will be enlightening. A vertical analysis will for instance shed some light on how revenue is being used. In this case, each component of the companies' financial statements will be converted into a percentage of a key component of either the balance sheet or the income statement. A special common size balance sheet and income statement will be utilized to ease comparison. The

G is the communication equipment firm because it has the lower Profit Margin and higher Accounts Receivable.

Amazon.com and Overstock.com are the two companies that will be researched in detail. Their financials will be comb through and synopsis of their financial status will be developed. These two companies are within the same industry of selling discounted products online. This is a tough industry to do well in and competition is tough. The e-commerce marketplace is intensely and savagely competitive. Their financials tell the story and show how lean and mean these companies must run. This paper is going to touch on briefly on each company, what they do, where they are financially, ratios between the two and their industry, and look at their cashflow.

Barnes and Nobles is one of the biggest bookstores that has a brick-and-mortal store concept. In the past they were know as a “big bully” that drove small book stores to close down because of their aggressive tactics to have competetetive advantage over them. Nonetheless, with the evolving circle of technology they have had a hard time in keeping up with the E-book era. In 2014 E-books increased its reader subscription by 28% compared to 23% in 2013. This number will continue increasing because 50% off American’s have access to devices that are either an e-reader or a tablet. B&N changed its business model to adjust to this new setting before it suffered a

In this case, a summary sheet which contains 14 sets of financial data from 14 different industries is provided. The task is to match 14 different firms with 14 industries by distinguishing the differences (e.g. sources of financing, profitability, the inventory turnover and the accounts receivable collection period) in the financial structures.

This means that the price of inventories purchased by the Retail Group is increasing. A further examination revealed that the Selling, General and Administration expenses (SG&A) of the Retail Group are nearly two and half times higher than that of the Manufacturing Group.

We are providing below the assumptions and other calculations we used while computing the WACC and the cash flows.

We believe that Company I represents the Smaller Producer of printing papers and Company J represents the World’s Largest Market of Paper.