Financial Statement Analysis. Business & Marketing Research Paper

Financial Statement Analysis
Name
Institutional Affiliation
Financial Statement Analysis
Barnes & Noble Inc (BKS)
Company Overview
Charles Barnes, William Barnes, and Clifford Noble established the Barnes & Noble Company (BKS) on November 19, 1886. BKS operates as a bookseller and also deals with both content management and other commercial activities. In its content management department, BKS offers business books through its Barnes & Noble Retail Division. In addition, BKS also sells the books through the NOOKsection (Reuters, n.d.). Other products that the Corporation sells include the science fiction books, love affairs, and the kids' books. Furthermore, the firm sells eBooks and magazines, and provides the cyber cafe services that also include physical goods. On the online platform, the Barnes & Noble Corporation provides toys and games that children use for learning purposes. There are also educational cinemas and songs that clients of the firm download from its website. Another noble service the Corporation provides is the renting of textbooks. Currently, BKS operates about 630 bookstores and also maintains an e-business website.
There is the emerging competition in the e-commerce, which is a potential threat to the future of BKS. The financial performance of BKS has not been good, bearing in mind that there are many competitors in the market today. Investors are shifting to companies with a high profitability and this is a threat to the future of BKS.
Selected 3-Year Financial Trend of BKS
Table SEQ Table \* ARABIC 1. BKS three-year Financial Performance
BKS Revenue (Y/Y Growth %)

2018

2017

2016

IV Quarter

April

-4.28 %

28.78 %

-67.48 %

III Quarter

January

-5.31 %

-7.99 %

-16.23 %

II Quarter

October

-7.85 %

-4.04 %

-27.64 %

I Quarter

July

-6.63 %

-24.94 %

-7.9 %

Source (CSImarket.com, 2018)
Highlights from Financial Trend
BKS is currently having a poor financial performance record for the past three years. In the last quarter of 2018, Barnes & Noble experienced a bottom-line of $ -0.29, while in the same period of the preceding year the company reported it at $ -0.19. Although the specialty retail business dropped by around -31%, the retail segment went up by more than 45%. The whole market generally performed better by about 21%. Barnes & Noble Inc. grew less than the market.
BKS operations
Barnes and Nobles is the U.S’s top bookseller brand with 630 retail locations in America. The bookstores of the firm carry a variety of selections on books as well as magazines, music, DVDs, toys, and games for kids. BKS is also the topmost internet bookseller in America and has several books available for its clients for online reading and borrowing at a fee (BKS Inc., 2018). The BKS website provides tools for customers to search within the huge selection to find precisely the books they are looking for.Other features on the website have developed Barnesandnoble.com into a location for book lovers to share their passion and experience the best of the publishing industry.Barnes and Noble has a publishing program that was first started for the purpose of publishing out-of-print titles. The company has converted the publishing program and it now publishes its own books.Barnes and Noble currently publishes titles that are non-copyrighted in addition to titles that it purchases from other publishers. In 2013, Barnes and Noble expanded its publishing operation with the purchase of Sparknotes and Sterling Publishers. Between the website and retail shops, the company retails more than 180 million books annually to the U.S.customers.
BKS has started the biggest eBook market in the world with over 700,000 titles. These titles are available for download to many different devices, including the iPhone, blackberry, and the Nook – Barnes and Noble’s own ebook reader. There are also over 600 college stores for post-secondary learners both online and in retail stores supporting students and lecturers. These bookstores cater to over 4 million students and over a quarter of a million professors. According to Barnes and Noble (n.d.), BKS is at position two in the selling of magazines in the United States of America. The store carries approximately 1,000 newspaper titles and more than 5,000 magazine titles. The company holds roughly 100,000 community events yearly.
BKS Strategy
The booksellers market is one of the most unpredictable markets in the business world because it is impossible for the company to predict how the readers’ behavior will evolve.BKS is sensitive to these challenges and it has set up measures and strategies to compete with others while at the same time remaining relevant to consumers.One of the strategies used by Barnes & Noble Inc. is to stay versatile in the market by focusing on the existing consumers and moving with them through every step (Wunker, 2011).BKS has identified specific consumers of its products in the market and does everything to push the products to the consumers.The presence of the internet has made it possible for the company to interact with the consumers over the internet and provide essential services to market to present and potential consumers. BKS has also decided to stay humble about what can be known and does not complicate the reading or accessibility of its contents and materials. One of the ways it has accomplished this is to stick to the common reading formats and the emerging trends in the market. When hardcover books were the main books available, BKS remained focused on the provision of hardcover books.
The Barnes & Noble Inc. has changed its commercial activities from a store to a multi-channel model based on its merchandising stores and online business. The firm's approach is to use its well-known trademark to appeal to many consumers who use its multi-channel platform.The company plans to increase its channels of supply by partnering with other strategic companies that deal with both hardware and software. Barnes & Noble manages its content through the website, which helps them to distribute the digital content to clients. Currently there is a market for ebooks and BKS has decided to move with the technological innovations so that it does not lose its customers to its competitors like Amazon and Borders.
Experimentation and risk taking is one of the strategies that BKS has employed to remain relevant in the market. As a traditional company with a long history, BKS tries to do things differently and changes its strategies depending on the feedbacks from customers. It is also challenging for a company operating on physical goods to make a successful shift to virtual goods. BKS made a successful transition from physical books to virtual books. The company is also selling games and toys today. BKS wants to diversify in every sector and it is determined to keep operating amid the challenges in the market and stiff competition from other companies.
BKS Management
Barnes & Noble Inc. was founded by William Barnes, Clifford Noble, and Charles Barnes in 1886. Ever since, the company has evolved to become one of the most effective booksellers in the market moving from one management team to another. The current Chairman of BKS is Mr. Leonard Riggio.Leonard has managed to transform BKS from a physical business platform to digital platform. Barnes and Noble College was also founded under Riggio’s management and it is serving millions of campus students in the United States.He has served on various not-for-profit boards including the Dia Art Foundation. Riggio has honorary doctorate degrees from several Colleges including Bentley and Tusculum Colleges.
Currently,Demos Parnerosis the Chief Executive Officerof BKS. According to Barnes and Noble (n.d.), Demosbecame the C.E.Oof the company in April 2017.He was the firm’s Chief Operating Officer since 2016.  The CEO was formerlythe President of North American Stores & Online, for Staples, Inc. Demos Parneroshas more than 25years’ experience in retail management leadership.Demos graduated from New York University with a Bachelor of Science in Management and began his career at Staples. He started as General Manager in Staples’ New York City shop in 1987 and rose through the ranks to become the President of the company.
Peter Herpich is the Vice President, Corporate Controller & Principal Accounting Officer of the organization. The company hired him in October 2013 as Vice President and Corporate Controller. A month later, Peter Herpich became the Accounting Officer. Mr. Herpich served as the Vice President and Assistant Controller of the company for four years from 2010 to 2013. He was the Director of Financial Reporting for the Corporation from 2004 to 2010. Previously, Peter Herpich,who is a Certified Public Accountantheld manyother positions in the company from 1995 to 2004.
The success of BKS in navigating challenges in the market is because the company is working as a team.The main duties of the CEO is to makekey decisions of the company andmanageits overall processes.In addition, the Chief Executive Officermanages the resources of thefirm.The CEO is the main communication’s reference point that the management board and company operations consult and is a member of the board of management.
BKS Markets
Barnes and Noble Inc. depend on the domestic market in the United States for sale of its products. The company operates more than 630 stores in every state in the United States. All the stores are owned by the company and it does not have plans to franchise.Online presence allows the company to channel its products to consumers through eBooks or physical deliveries for hardcover books at a reasonable fee.The company has delivery points in all states of the United States. The firm sellsmost of its eBooks throughitsvarious agents.
Market segmentation is one of the strategies used by BKS to retain current consumers and access potential customers in the market. BKS has more than 630 stores in the whole of the United States. BKS has also identified active readers of its contents such as students and passive readers who are onlyactive during ...