Accounting Analysis report for BEST BUY

Accounting analysis report for BEST BUY

Stakeholders of the Company

Stakeholders are actors where internal or external or economic and social partners of the firm. The activity of the company has a direct or indirect impact on these players and these players have a more or less on the company. These are complex networks of influence, relationships, partnerships, power, and interdependence. A certain extent, the company depends on each of its stakeholders for its survival, and vice versa.

The stakeholders that are interested in the information provided in the annual report of Best Buy are their customers, suppliers, lenders (banks and shareholders), employees. These are internal stakeholders whereas, external stakeholders such as residents of neighboring areas to business or interest groups. For a business, information, consultation and dialogue with stakeholders are essential, as it is the prerequisite for the legitimacy and value of the policy of sustainable development that seeks to engage (Edwards D., 1998).

They are interested in the financial health of the company as being part of the company, company every action small or big directly affects and influences their relationship. Furthermore, financial statements are an image of a financial health of the Best Buy. The financial statement used by the external investors in order to see how well a business is doing and performing and whether it is profitable to invest in this company for future growth and profit. Majority of the investors want that the company they are investing should have strong financial information in order to remove the potential risk from the investment.

The look for the following information in the financial statement:

Profitability: The internal and external stakeholder looked for the profiba6tilbity of the company as that indicates a pure structure of the Best Buy sales, COGS and expenses. According to the general accounting standard, COSG should be 75% or less of gross sales expenses, 20% or less the income, 5% of gross sales. This approach is used by the entire stakeholders so that the companies are not overpaying for COGS and other expenses listed in the income statement. The review of tax trend in also important in order to see whether sales or expenses are rising or falling over the previous periods.

Balance: This part is very essential to be review by the stakeholders as it demonstrates the worth of the company. Significant review of the assets in order to check the size of the inventories and account receivables. However, the availability of high inventory indicates slow sales or obsolete assets still owned, moreover large amounts of reforestation company indicates slow collections by the company, stopping the flow of cash. This might have a negative impact on the company reputation from the stakeholders' perspective. High level of liability indicates that a company comprises of numerous debt obligations. An especially high current liability means the company avoiding the payments of suppliers due to low cash flow in the company.

Cash flows: The most important thing seen by the stakeholder especially the suppliers and the bank, investors, ...