Help make Barnes and Noble successful Essay Example | Topics and Well Written Essays - 1500 words

Help make Barnes and Noble successful - Essay Example The report will include several parts including a company background, financial analysis, and an in-depth analysis of the change initiatives that the firm must implement to adapt to the market challenges of the 21st century. Company Background Barnes & Nobles was acquired by Leonardo Riggio in the 1970s. The first Barnes and Nobles stored operated by Riggio was located in Manhattan. The stored was transformed by its new owners into the largest bookstore in the world. The firm has always been at the forefront of innovation. â€Å"In 1974, Barnes & Noble was the first bookseller in America to advertise on television† (Barnesandnobleinc, 2013). Barnes & Noble throughout its history has always adapted well to market changes and it has increased its market share in the book industry. The company in its early years expanded its sales by selling books through catalogs. The firm began to sell books online in the late 1980s. A key acquisition for the company was buying Sterling publish ing in 2003. Sterling publishing has over 5,000 titles in print including educational resources, children’s picture books, puzzles and games, adult fiction, craft and photography, cookbooks, self-help and classics (Barnesandnoblesinc, 2013). The firm became the world’s largest publisher of digital books in 2009. ... The previous year the firm achieved a net income of $36.67 million. One of the reasons for the bad performance of the company is the fact that cost of good sold and occupancy increased by 26%. The net margin of the firm was -1.06%. The earnings per share (EPS) of the firm in 2011 was -$1.31. Barnes & Noble paid dividends per share of $0.75. At the end of 2011 the firm had total assets of $3.60 billion. The total assets of the firm in 2011 went down by 3.03%. The current ratio shows the ability of a company to pay off its current debt. A good current ratio is above 1.0. In 2011 the current ratio of Barnes & Nobles was 1.01. The company is in a good position to pay off its current debt. The return on assets (ROA) of the organization in 2011 was 2.06%. This ratio shows how effective a company has been at generating revenues from its total assets. The return on equity (ROE) of Barnes & Noble in 2011 was 9.02%. â€Å"When compared to the return on total assets, measures the extent to whi ch financial leverage is working for or against common stockholders (Garrison, Noreen, 2003, pg.784). The inventory turnover ratio shows how many times the company has sold its inventory during the year. Barnes & Noble had an inventory turnover ratio of 3.78 in 2011. Change Initiatives The company must implement changes in its corporate strategies to achieve the sales expectations of its shareholder. The goal of the company should be to maximize shareholders wealth. A new strategic approach for the company is to change its strategy to expand its retail sales from the domestic marketplace into the international landscape. The firm has an expertise in how to run bookstores in college marketplace. The company should seek a similar strategy