Staples Full Analysis Of Staples For 2012 Essay

Staples Full Analysis of Staples for 2012

Throughout 2012, Staples has been in the process of going through a major restructuring. This is because the firm is experiencing challenges associated with the fiscal cliff, intense competition from rivals and stagnant consumer spending in key markets (most notably: North America, Australia and Europe). ("Staples Inc.") This is illustrating how the company has been dealing with major challenges that are hurting their business model.

Valuation Analysis

The valuation analysis reveals that, the company is unstable. This is because they are having trouble adjusting with the difficult economic environment. It has an average PE ratio of 10.25. On the surface, this appears to be undervalued. However, the company has been lowering guidance citing difficult conditions in North America, Australia and Europe. As a result, Value Line has the stock listed as underperform for 2013. ("Staples Inc.") ("Staples Inc. Data")

Capital Structure and...

...

The long-term liabilities have risen dramatically since 2008 with these numbers going from $3.38 billion (in 2008) to $6.4 billion (in 2012). While the shareholders return on equity is 11.50%. ("Staples Inc.") ("Staples Inc. Data") ("Capital Structure")
This is showing how the capital structure of the company is adversely impacting the levels of debt. These shifts are occurring through challenges affecting the firm's business model and their strategy. This means that it is becoming weaker over the course of time. In the future, this will hurt the overall return on equity. As it could, make it harder for the firm to finance its operations and growth. ("Staples Inc.") ("Staples Inc. Data") ("Capital Structure")

International Presence and Impacts

Staples, is facing challenges from their presence in Europe and Australia. This is because the financial…

Sources Used in Documents:

Works Cited

"Capital Structure." Business Dictionary, 2013. Web. 5 Mar. 2013 <http://www.businessdictionary.com/definition/capital-structure.html>

"Staples Inc." Value Line. New York: McGraw Hill, 2012. Print.

"Staples Inc. 10 K." SEC, 2012. Web. 4 Mar. 2013. <http://www.sec.gov/Archives/edgar/data/791519/000079151912000003/a201110k.htm>

"Staples Inc. Data." 2012.
Matthews, Christopher. "Office Depot / Office Max Merger." Time, 2013. Web. 4 Mar. 2013. <http://business.time.com/2013/02/21/office-depotofficemax-merger-another-nail-in-the-coffin-of-traditional-retail/>


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