BEST BUY COMPANY ANALYSIS 13
The current stock value for Best Buy based on the NYSE market is $55.02. The value
reflects a 0.16% gain in value compared to the previous period. However, the stock market
value is always changing. The current financial position of the firm confirms that the
company recovered from the poor performance experienced in 2016. Best Buy was able to
improve its profitability, efficiency, and financial leverage, thus indicating the good
performance. However, the consistent decline in the sales/revenue is a bad indicator. The
revenues of the firm have reduced steadily through the three years under consideration. This
means that the company managed to make better profits from cutting down on the costs of
operations. This is not a sustainable technique of making profits, and the firm should look for
ways to increase the revenues in the short-run and the long-run. The increased revenues can
be achieved through venturing into new international markets such as emerging nations to
increase the overall sales and support the declining revenues in the US, Mexico, and Canada.
The investors may opt to sell their stake in the firm unless the management finds a better
approach of increasing the revenues and efficiency of the company.
Success Factors and Risks
The strategic and financial priorities of a company have a significant impact on the
accounting procedures that are in place. These strategies will have a considerable impact on
the success of the company, thus boosting the overall sales. Best Buy Company is mainly
efficiency-oriented and aims at developing strategies to make the best used of the resources to
provide the best consumer experience. To achieve this goal, the company launched a strategic
plan called renew blue to handle the several issues facing the corporation. This strategy
aimed at strengthening the relationships with vendors, eliminating unnecessary costs,
revamping stores, ramping up Best Buy’s online business, and increasing same-store sales
(Bailey, 2015). This turnaround strategy allowed the firm to realize a significant reduction in
the costs incurred by 2015. These costs were reduced by an estimated $350 million by 2014.