Best Buy Vs. Radio Shack, Inventory Turnover Vs. Profitability

305 words - 2 pages

The gross margin percentage, expense to sales ratio, net profit margin, inventory turnover, and asset turnover differ from Radio Shack to Best Buy for numerous reasons. The operations of the two companies are different in regards to the services that are offered to customers. Best Buy offers its customers services like computer setup and repair, software ...view middle of the document...

The target customer also plays a role in affecting these different aspects of the financial statements. While Radio Shack is set up as a specialty store that offers a narrow array of products, Best Buy offers its customers everything from small electronics to high priced appliances and televisions.Best Buy has better overall financial performance than Radio Shack. Even though Radio Shack has a better return on assets Best Buy dominates the market with its size, strength and credibility. The rapid growth of Best Buy is another example of domination over its competition. Earnings per share is another great measure of a companies financial performance, and according to Bloomberg.com Best Buy achieved a growth of 2.54 over the past 12 months as opposed to Radio Shacks 0.98. Best Buy's net sales growth from 2002 to 2004 has increased by 30% as opposed to Radio Shack's 5.8%. Best Buy's net sales change over the same 2 year period was also greater (11%) than Radio Shack's (8.8%)

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