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Radioshack

In: Business and Management

Submitted By bryanto1
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1. Explain whether RadioShack Corporation had more sales revenue or collected more cash from customers during 2010. Why? Show computation. (Challenge)
RadioShack had $4,473M in net sales for the year of 2010. After the expenses were deducted from net sales, RadioShack had a net income of $206.1M. It collected $569.4M from cash and cash equivalents and $377.5M from accounts and notes receivable. Adding the two assets equals a total of $946.9M collected cash from its customers in 2010. The results show RadioShack had more sales revenue than the collected cash it received from its customers in 2010. 2. Investors are vitally interested in a company’s sales and profits and its trends of sales and profits over time. Consider RadioShack Corporation sales and net income (net loss) during the period from 2008 through 2010. Compute the percentage increase or decrease in net sales and also in net income (net loss) from 2008 to 2010.
2008 –Sales $4.224M, Income $189M, Percentage Revenue 4.5%
2009 – Sales $4.276M, Income $205M, percentage Revenue 4.8%
2010 – Sales $4.378M, Income $206M, Percentage Revenue 1.6%
Which item grew faster during this two-year period—net sales or net income (net loss)?
Net income had an increase of 8.4% over the two years but net sales only had an 3% increase over the two years. Net income had a sizeable 8% increase between 2008 and 2009 but slowed down between 2009 and 2010 with only a 0.4% increase. Sales had a 1% increase between 2008 and 2009 and a 2% increase from 2009 to 2010.
Can you offer a possible explanation for these changes? (Challenge)
RadioShack’s movement into wireless mobile sales is the main reason for their increase in sales and income. RadioShack also started to carry more mobile accessories and went into a sales agreement with Apple to include some of their products.

Reference
Harrison , W. T.,…...

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