Compared Analyze between Best Buy and Circuit City

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Presentation transcript:

Compared Analyze between Best Buy and Circuit City Presented by: Jodie Darnell Heidi Elmore Shaun Shauh Ivan Lee

Circuit City 10 year Income Best Buy 10 year Income

Income Statement Income Statement Best Buy’s Circuit City’s Income Statement Income Statement 1999 2000 2001 2002 1999 2000 2001 2002 Rev 10,077.9 12,494 15,326.6 19,597 10,804.5 12,614.4 12,959 12,791.5 COGS 8,250.1 10,100.6 12,267.5 15,167 8,359.4 9,751.8 10,135.4 10,049.8 --------------------------------------------------------------------------------------------------------------------- GP 1,827.8 2,393.4 3,059.1 4,430 2,445 2,862.6 2,823.7 2,741.7 2003 2004 2005 2006 2003 2004 2005 2006 Rev 20,946 24,547 27,433 30,848 9,953.5 9,745.5 10,472.4 11,597.7 COGS 15,710 18,350 20,938 23,122 7,603.2 7,518.1 7,903.6 8,766.8 GP 5,236 6,197 6,495 7,726 2,350.3 2,227.3 2,568.7 2,830.9 2007 2008 TTM 2007 2008 TTM Rev 35,934 40,023 42,137 12,439.8 11,743.7 11,306.7 COGS 27,165 30,477 32,108 9,501.4 9,318.2 8,999.7 GP 8,769 9,546 10,029 2,928.3 2,425.5 2,307

Best Buy’s Inventory based on the Balance Sheet 1999 2000 2001 2002 2003 2004 2005 Inventory 1,046.4 1,183.7 1,766.9 2,258 2,046 2,607 2,815 2006 2007 2008 Latest Qtr Inventory 3,338 4,028 4,708 6,105 Circuit City’s Inventory based on the Balance Sheet 1999 2000 2001 2002 2003 2004 2005 Inventory 1,517.7 1,689.2 1.757.7 1,633.3 1,409.7 1,517.3 1,459.5 2006 2007 2008 Latest Qtr Inventory 1,698 1,636.5 1,573.6 1,508.9

Best Buy’s Debts based on the Balance Sheet (amount in millions) 1999 2000 2001 2002 2003 2004 2005 2006 Short-Term 30.1 15.8 114.9 7 1 368 72 418 2007 2008 Latest Qtr 68 189 1,554 Long-Term 61.5 114.3 118 813 828 482 528 178 2007 2008 Latest Qtr 590 1,465 1,136 Circuit City’s Debts based on the Balance Sheet (amount in millions) Short-Term 10.7 180.4 133.6 112.3 1.4 1.1 0.9 850.4 922.2 912.1 --- Long-Term 426.6 249.2 116.1 14.1 11.3 22.7 11.5 52 50.5 57.1 52.6

Main Facts Circuit City filed for bankruptcy on Nov. 10 Bad Economy to blame Circuit City lost $239 million in late September Laid off highest-paid hourly employees, but CEO of Circuit City received $7 million in compensation

Why Best Buy Succeed? Why Circuit City Failed? * Leader in electronic research * Net margin never space seceded over 2 % * Increase market share and bargaining * In bad locations power for suppliers * Poor employee * Management has approved training to be affective

Advantages Best Buy has over Circuit City Geek Squad Invest in training for employees Give customers value and not only in low prices.

Disadvantages Circuit City has over Best Buy Focused on discounts and cost-cutting Selling site only Do not focus as much on the customers as they do lowering their prices