Assignment 1 F&A Research Paper Example | Topics and Well Written Essays - 500 words

Assignment 1 F&A - Research Paper Example Nonetheless, the executive are predicting low consumer confidence and high unemployment rate as two most important factors that will hinder the recovery of the retail industry. (KPMG, 2012) (Farfan, 2011) Note 1 to the financial statements provides a complete description of the RadioShack Corporation’s business. The company deals in electronic items and services through 4,395 retail stores under its brand name in the US. The company also operates in Puerto Rico, Virgin Islands and Mexico. In 2009, the company launched ‘Target Mobile Centers’ to increase their sales and revenue. However, due to its failure, the company has decided to wind up these centers by the first quarter of 2013. It is very important to understand this note because its helps to identify and comprehend the business operations of the company and its future plans of discontinuation of any product line. (RadioShack Corp. Annual Report, 2012) Best Buy and Wal-Mart are two of the important competitors of RadioShack Corporation because they tend to have the same business as well as operate in the same environment. This will allow us to compare their financial and non financial metrics against each other such as profitability, efficiency, leverage and earning potential. Similarly, through a survey, the position of the RadioShack can be compared against its competitors in the consumers’ minds. Compared to the industry average debt to total assets ratio of 0.72, RadioShack Corporation has a better financial position. The company’s 61% of the assets are financed by debt. However, RadioShack Corporation is highly leveraged company as compared to industry benchmarks. The company has raise $1.58 of debt for every $1 of equity in the company as compared to $1.2 raised by the industry. This signifies an increased riskiness in the company and a poor rating amongst the external stakeholders. (Bloomberg Businessweek,