BATTLE OF

THE BLUES

A PRESENTATION BY B+ CONSULTANTS
Do the financial statements reflect these
differences?

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 WALMART TIFFANY
ACCOUNTING RATIOS
2002 2001 2002 2001

Return on Equity 19% 20% 17% 21%

Both these businesses seem to be doing well

So, let’s drill deeper

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 WALMART TIFFANY
ACCOUNTING RATIOS
2002 2001 2002 2001

Profit Margin 3% 3% 11% 11%

Walmart operates in a market with low margins

Tiffany deals in high involvement products

(with high profit margins)
 WALMART TIFFANY
ACCOUNTING RATIOS
2002 2001 2002 2001

Asset Turnover 263% 247% 99% 106%

Walmart has high volume of sales in comparison to

assets

Tiffany has high value of sales in comparison to

assets
In fact…

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 WALMART TIFFANY
ACCOUNTING RATIOS
2002 2001 2002 2001

Inventory Days 48.11 52.09 336.70 330.55

Walmart holds inventory for about 48 days

as compared to Tiffany’s 337 days
 WALMART TIFFANY
ACCOUNTING RATIOS
2002 2001 2002 2001

Leverage 238% 249% 157% 169%

Walmart mitigates debt risk through large sales

volume and large amount of Fixed Assets

Tiffany mitigates debt risk through high value

inventory and very liquid current assets
So, who’s winning?

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…

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 WALMART TIFFANY
ACCOUNTING RATIOS
2002 2001 2002 2001

Debt Equity 45% 40% 17% 26%

Tiffany seems to be managing their

long term liabilities better
 WALMART TIFFANY
ACCOUNTING RATIOS
2002 2001 2002 2001

Current Ratio 103% 92% 280% 298%

Tiffany has more resources to meet their short

term liabilities
But these 2 data points don’t give us
conclusive evidence

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So, what else can we infer?

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Low Barrier to Relationship Requires
Entry with Suppliers Economies of
E-Commerce Can leverage existing Scale
relationships
Bulk orders to drop prices
Price Sensitive Create economies of scale
Audience Investment in logistics and
for Juice business as well
distribution network

Capital Intensive
 Liquid and High Barrier Requires
Appreciating to Entry Expertise
Inventory moves slowly.
Inventory is liquid and Requires warehousing.
Requires expertise in the
appreciating jewellery industry
Requires process expertise
including manufacturing

Brand conscious audience

So, what would we recommend?

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THANK YOU