Tech data:

Office Depot is considered to be one of the giant player in office supplies industry. The company facilitates with a higher range of products and services to consumers as well as businesses of all sizes. The company has been achieving its sales targets from multiple channelswhich includes retail stores, contract sales, internet websites, telephone account sales force, marketing catalogs and call centers. Considering the fierce industry competition, the company merged with a renowned company named Office Max incorporation in the year 2013. However, this merger had made noise in the industry and it has been said that this merger has acquired the whole industry.The company has been facilitating across United States and Canada,about 38 distribution centers of Office Depot have been facilitating throughout the United States and Canada.

Office Depot company exists in a very competitiveenvironment. The competition includes office supplies stores, discount clubs, online retailer, mass merchandisers, electronic superstores and direct marketing. The intensity of competition increases with prices, advertising, discounts and marketing. However, office depot is considered as one of the large-scale and highly competitive company.There are many risks that are associated with the merger of the company. Therefore, the company is not able to achieve full synthetic benefits of the merger of two giant industry leaders. These risks include the integration of merger would take longer time, higher cost than expected and would be more difficult than expectation. Moreover, restructuring of different activities may result in employee retention and disruption of business activities. Unexpectedexpenses are arriving and potential liabilities are not being ignored, thus, overall company expenses are increasing. Unanticipated changes have been occurring in market segments and industry, which are directly effecting company’s costs and profit rate. Lastly, substantial cost has been occurred due to any branding or rebranding activities for the company’s benefits.(sec, 2017).

Financial analysis

Introduction:

The above financial analysis of Office Depot’s financial statements has been done in order to measure the past, present and future performance of the company. This analysis would help the company to make economical and beneficial future decision for the company.

Office Depot-Accounting Term Paper Harvard Case Solution & Analysis

The main purpose of analysis is to evaluate the company’s past performance and to predict how the company is going to perform in the future. Moreover, it would also help the management to identify major problems and issues in specific operations of the company in order to keep focus on the identified issues and make right decisions.

Ratio analysis explanation:

In order to evaluate company’s operations, following ratios has been used as metrics. Moreover, industry average has also been used as a benchmark to measure the company’s standard of performancein the industry:

Profitability ratios:

Profitability ratios are used to evaluate the company’s level of profitability. The information of company’s income statement is compared to respective categories in order to measure the company’s ability to earn revenue on certain basis. These ratios actually show the level of earning on the company’s operations. Profitability ratios are helpful for investors in a way that they can measure company’s ability and return on investment over company’s assets and equity. Following ratios have been used to calculate company’s profitability:

1. Gross profit margin
2. Operating profit margin
3. Pre-tax margin
4. Net profit margin
5. Return on assets
6. Return on equit.
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