CP 7-Eleven is a leading retail chain in Thailand. The investigation of the financial statements for the year 2011 revealed that while the earnings per share improved, the yield on equity (ROE) declined. The firm had negative working capital.
It used strong negotiating power over its suppliers and customers and had efficient inventory management. It had been amassing cash and other liquid assets throughout the past few years and it expanded in a well-planned way, with almost 500 new stores annually. However, the firm was viewed as having a large amount of "fat" on its balance sheet. It was necessary to reduce the fat and improve ROE.
The entity must emphasize on procedures for prospective growth. Sundaravaradhan Venkatesh is connected with Asian Institute of Technology and Sandhya Bhatia is associated with Indian Institute of Management, Udaipur.
PUBLICATION DATE: December 09, 2013 PRODUCT #: W13518-PDF-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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