Introduction
Barnes & Noble, Inc. deals with sales a rental of trade book, which includes textbooks, magazines, educational toys, children books, gifts café products, and services. This kind of business has its clients from all the age groups, professions, and geographical locations. The books in their stores are in hand copies and others in Ebook format whereby they can be sold online to clients all over the world. The company traces its establishment back in 1873 by Charles M. Barnes in Illinois. Later on, it was acquired by Leonard Raggio who has ever since transformed giant book selling company. Today, the company’s headquarters are situated in New York City and have the largest number of books retail outlets across the United States. This essay analyzes the financial history of the company in the last three years, to gain knowledge on the financial flow which will aid a basis for a new manager in their planning.
Financial History
From the company’s income statement for the last three years (2014 -2017), it indicates that the company had unstable financial income, which dropped significantly in almost all area in 2016 and 2017 consecutively, compared to the income registered in the year 2015. For instance, the net income in 2015 stood at $35.86M, which dropped to $13.48M in 2016. This drop shows that during this year, the company went through some internal constraints which resulted in a huge margin drop of the income ( Penman, 2007). During the following year, 2017, the company registered a commendable rise in the income which hit $21.45M. The results indicate that the company had laid some good strategies in their operations to counter the previous year’s loss, although they couldn’t reach the level they had attained in the year 2015. This nature of income graph indicates that the company had not been doing well in the last two years, although they have some concrete strategies to revive their revenue channels.
Delegate your assignment to our experts and they will do the rest.
Cash Flow Statement
From the cash flow statement of the company, a huge sum of money was channeled towards into company’s activities in the first two years compared to the 3rd year. However, despite the amounts channeled into the operations in the two years, only the 2015’s income could slightly match the expected income, as there was a significant drop in income during 2016. On the other hand, 2017 received little supply though there was an improvement registered regarding the income.
From the information obtained from the balance sheet, in 2015, the company had assets that were valued at $3.73B, $3.54B in 2016 and $3.23B in 2017. The trend observed in the value of the assets owned by the company in the three years period indicates a decline in value. This change can, however, be attributed to the depreciation of some assets as time goes. The margin in difference is reasonable, indicating that the company utilized their assets in a good mannerism with commendable mentainance activities all along ( Davila, et al, 2009).
To conclude, following the financial history of Barnes & Noble, Inc obtained for the last three years, we can see that the company has had struggles in their operations. This resulted in low-income margins, which means that the company lost a significant amount of money in revenue in 2015 than any other year during the stipulated period. However, a satisfactory progress can be seen in the last year of the period,2017, improving in almost all areas. As new manager, this information will help largely in planning for the future of the company ( Almeida, et al, 2004). One should find a way to maintain the rising nature of income as witnessed in the last year while minimizing the cost to ensure that the company makes some good profit in the future.
References
Davila, G Foster, M Li, (2009) - Accounting, Organizations and Society Reasons for management control systems adoption: Insights from product development systems choice by early-stage entrepreneurial companies.
Almeida, M Campello, MS Weisbach, (2004) - The Journal of Finance, The cash flow sensitivity of cash.
Penman, ( 2007) Financial statement analysis and security valuation.
APPEDIX
Income statement
| Fiscal year is May-April. All values USD millions | 2015 | 2016 | 2017 |
| Sales/Revenue | 6.07B | 4.16B | 3.89B |
| Cost of Goods Sold (COGS) incl. D&A | 4.39B | 2.97B | 2.8B |
| Gross Income | 1.68B | 1.19B | 1.09B |
| SG&A Expense | 1.53B | 1.16B | 1.03B |
| Interest Expense | 17.95M | 8.77M | 7.51M |
| Pretax Income | 115.28M | 5.89M | 46.8M |
| Net Income | 35.86M | 13.48M | 21.45M |
Cash Flow Statement
| Activity | Fiscal year is May-April. All values USD millions. | 2015 | 2016 | 2017 |
| Operating Activities | Net Operating Cash Flow | 55.91M | 195.69M | 145.24M |
| Investing Activities | Net Investing Cash Flow | (151.97M) | (208.45M) | (96.26M) |
| Financing Activities | Net Financing Cash Flow | (169.75M) | (47.76M) | (50.83M) |
Balance sheet
Assets
| Fiscal year is May-April. All values USD millions. |
2015 |
2016 |
2017 |
||||
|---|---|---|---|---|---|---|---|
| Cash & Short Term Investments |
74.36M |
13.84M |
11.99M |
||||
| Cash Only |
74.36M |
13.84M |
11.99M |
||||
| Short-Term Investments |
- |
- |
- |
||||
| Total Accounts Receivable |
98.58M |
124.92M |
67.29M |
||||
| Accounts Receivables, Net |
73.87M |
103.04M |
43.8M |
||||
| Accounts Receivables, Gross |
73.87M |
103.04M |
47.63M |
||||
| Bad Debt/Doubtful Accounts |
- |
- |
(3.83M) |
||||
| Other Receivables |
24.7M |
21.88M |
23.49M |
||||
| Inventories |
1.35B |
933.72M |
946.91M |
||||
| Finished Goods |
1.35B |
933.72M |
946.91M |
||||
| Work in Progress |
- |
- |
- |
||||
| Raw Materials |
- |
- |
- |
||||
| Progress Payments & Other |
- |
- |
- |
||||
| Other Current Assets |
208.14M |
105.91M |
101.82M |
||||
| Miscellaneous Current Assets |
208.14M |
105.91M |
101.82M |
||||
| Total Current Assets |
1.73B |
1.18B |
1.13B |
||||
|
2015 |
2016 |
2017 |
5-year trend |
||||
|---|---|---|---|---|---|---|---|
| Net Property, Plant & Equipment |
584.91M |
490.71M |
449.29M |
298.58M |
276.12M |
||
| Property, Plant & Equipment - Gross |
3.11B |
3.17B |
3.08B |
2.62B |
2.68B |
||
| Buildings |
1.22B |
1.22B |
1.21B |
1.06B |
1.07B |
||
| Land & Improvements |
2.54M |
2.54M |
2.54M |
2.54M |
2.54M |
||
| Computer Software and Equipment |
- |
- |
- |
- |
- |
||
| Other Property, Plant & Equipment |
1.88B |
1.94B |
1.87B |
1.56B |
1.61B |
||
| Accumulated Depreciation |
2.53B |
2.67B |
2.63B |
2.32B |
2.41B |
||
| Total Investments and Advances |
- |
- |
- |
- |
- |
||
| Other Long-Term Investments |
- |
- |
- |
- |
- |
||
| Long-Term Note Receivable |
- |
- |
- |
- |
- |
||
| Intangible Assets |
1.04B |
1.02B |
1B |
522.18M |
517.59M |
||
| Net Goodwill |
495.5M |
493.19M |
489.27M |
211.28M |
207.38M |
||
| Net Other Intangibles |
547.93M |
528.58M |
513.84M |
310.9M |
310.21M |
||
| Other Assets |
57.07M |
44.53M |
47.79M |
13.63M |
11.2M |
||
| Tangible Other Assets |
57.07M |
33.64M |
42.42M |
13.63M |
4.86M |
||
| Total Assets |
3.73B |
3.54B |
3.23B |
2.19B |
2.09B |
||
Liabilities & Shareholders' Equity
|
2015 |
2016 |
2017 |
5-year trend |
|||
|---|---|---|---|---|---|---|
| ST Debt & Current Portion LT Debt |
- |
- |
- |
|||
| Short Term Debt |
- |
- |
- |
|||
| Current Portion of Long Term Debt |
- |
- |
- |
|||
| Accounts Payable |
655.06M |
480.57M |
473.69M |
|||
| Income Tax Payable |
- |
- |
- |
|||
| Other Current Liabilities |
792.2M |
713.3M |
634.58M |
|||
| Dividends Payable |
- |
- |
- |
|||
| Accrued Payroll |
- |
- |
- |
|||
| Miscellaneous Current Liabilities |
792.2M |
713.3M |
634.58M |
|||
| Total Current Liabilities |
1.45B |
1.19B |
1.11B |
|||
| Long-Term Debt |
- |
47.2M |
64.9M |
|||
| Long-Term Debt excl. Capitalized Leases |
- |
47.2M |
64.9M |
|||
| Non-Convertible Debt |
- |
47.2M |
64.9M |
|||
| Convertible Debt |
- |
- |
- |
|||
| Capitalized Lease Obligations |
- |
- |
- |
|||
| Provision for Risks & Charges |
71.37M |
13.76M |
20.19M |
|||
| Deferred Taxes |
200.53M |
54.02M |
86.13M |
|||
| Deferred Taxes - Credit |
200.53M |
230.83M |
239.98M |
|||
| Deferred Taxes - Debit |
- |
176.81M |
153.85M |
|||
| Other Liabilities |
124.93M |
100.43M |
79.12M |
|||
| Other Liabilities (excl. Deferred Income) |
29.98M |
30.42M |
79.12M |
|||
| Deferred Income |
94.95M |
70.01M |
- |
|||
| Total Liabilities |
1.84B |
1.59B |
1.51B |
|||
| Non-Equity Reserves |
- |
- |
- |
|||
| Preferred Stock (Carrying Value) |
196.06M |
- |
- |
|||
| Redeemable Preferred Stock |
196.06M |
- |
- |
|||
| Non-Redeemable Preferred Stock |
- |
- |
- |
|||
| Common Equity (Total) |
1.19B |
603.51M |
574.31M |
|||
| Common Stock Par/Carry Value |
98,000 |
112,000 |
112,000 |
|||
| Retained Earnings |
357.51M |
(24.35M) |
(46.43M) |
|||
| ESOP Debt Guarantee |
- |
- |
- |
|||
| Cumulative Translation Adjustment/Unrealized For. Exch. Gain |
- |
- |
- |
|||
| Unrealized Gain/Loss Marketable Securities |
- |
- |
- |
|||
| Revaluation Reserves |
- |
- |
- |
|||
| Treasury Stock |
(1.08B) |
(1.11B) |
(1.12B) |
|||
| Total Shareholders' Equity |
1.39B |
603.51M |
574.31M |
|||
| Accumulated Minority Interest |
- |
- |
- |
|||
| Total Equity |
1.39B |
603.51M |
574.31M |
|||
| Liabilities & Shareholders' Equity |
3.73B |
3.54B |
3.23B |
|||
