Grocery Checkout - Financial Analysis

Financial Analysis:

After incorporation, GCO earned about $300 thousands in sales from selling to 800 customers. By 2008 the company had generated over $1million in sales, and by 2009 it had registered almost 3,500 customers. This proves the company was growing steadily. A DuPont analysis shows that it has grown from 0.22 in 2008 to 0.31 in 2009. The ROA increased from 4.68% in 2008 to 9.25% in 2009, a positive increase that benefits the company. The ROE also increased from 0.27 in 2008 to 0.54 in 2009, another successful increase. However the financial leverage of the company went from 4.78 to in 2008 to 3.30 in 2009.

| 2008 | 2009 |

Net Working Capital | $72420 -$38198 = $34222 | $91302-$38706 = $52596 |

Current Ratio | $72420/$38198 = 1.9 | $91302/$38706 = 2.36 |

Acid Test Ratio | 1.41 | 1.47 |

| 2008 | 2009 |

ROA | $13661/$291758 = 4.68% | $26854/$290290 = 9.25% |

ROE | $13661/$50000 = 0.27 | $26854/$50000 = 0.54 |

Financial leverage | $291758/$61047 = 4.78 | $290290/$87902 = 3.30 |

| 2008 | 2009 |

Net Income / Sales | $13661/$697955 = 0.0196 | $26854/$1056724 = 0.0254 |

Sales / Assets | $697955/$291758 = 2.39 | $1056724/$290290 = 3.64 |

Assets / Equity | $291758/$61047 = 4.78 | $290290/$87902 = 3.30 |

DuPont Analysis | 0.22 | 0.31 |

Value Chain Analysis: From the very beginning GCO developed partnership with the local suppliers who were fresh produce local distributors, butchers, bakers and local grocery stores. The customers of GCO had the privilege of choosing the best, freshest products online. GCO who were the ‘Shoppers’ of those suppliers collected the product which were ordered online, from the local suppliers. The collected products were then brought in to a centralized warehouse where GCO bagged the groceries and packed the perishable products in bins. Afterwards they were loaded in to a three climate delivery trucks which could hold goods in the dry section, a fridge, or freezer as needed. Then the products were delivered to...