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Autozone Financial Case Study

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A retailer and a distributor of automotive replacement parts and accessories, AutoZone, was founded by J. R. Pitt Hyde III in 1979. The company’s headquarter is located in Memphis, Tennessee and was incorporated on November 25, 1991. The company is listed on the New York Stock Exchange and the stock symbol is AZO. The current president/CEO of the company is Bill Rhodes. The company operates in two segments, which includes auto parts and others. It operates 5,069 stores in the United States including Puerto Rico, 418 in Mexico, and seven in Brazil. The company has several service marks and trademarks, which include AutoZone, ALLDATA, AutoAnything, and many others. The auto parts segment of the company includes stores that offer new and remanufactures automotive hard parts, maintenance issues, and accessories for cars, vans, and trucks. The products include A/C compressors, batteries, belts and hoses, carburetors, clutches, engines, radiators, oil, …show more content…

The company is exposed to market risks such as interest rate increase, fuel prices, and foreign exchange rates. The financial statements are materially impacted by estimates and assumptions. The company uses LIFO method to state inventories for domestic merchandise. The risk of obsolescence of inventory is minimal and excess inventory is returned to vendor for credit. Vendor allowances are usually treated as a reduction of inventory, unless they are provided as a reimbursement of specific, incremental, identifiable costs incurred by the company in selling the vendor’s products. Goodwill and intangibles are evaluated for impairment annually in the fourth quarter of each fiscal year or whenever the carrying values exceed the current fair value. The company retains a significant portion of the risks associated with workers’ compensation, employee health, property liability; and third party insurance to limit the exposure related to certain

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Operational customer supplies stock age will be inventoried monthly and replenishment upon request. A 10% inventory will be conducted monthly on all accountable items. All customer property is always safeguarded in secured in locked areas and only authorize personnel will be allowed entry into these secured locations. Warehouse Manager conducts thorough search for all missing equipment. If any of the customer property is ( lost, missing, stolen, destroyed, or misplaced) controlled equipment, an Financial Liability Investigation of Property Loss form DD form 200 is generated and maintain until completion of investigation, and then file for future

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This reason is why Publix hires licensed CDL drivers with experience to operate this type of equipment considering these 18 wheelers trucks are commercials on wheels which impacts the company reputation. The other business product that Publix used in the store is accessory equipment. Accessory equipment is capital items such as computers, furniture,

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When you have an issue with your vehicle, it can be difficult to know whom to trust to take care of your car. This is especially true when you’re relying on a shop to fix dents, dings, scratches, or other damage from a collision. While there are a lot of body shops and collision repair centers out there, finding one that offers professional service and results at a reasonable price is easier said than done. refferal-collision-body-shop Referral Collision in Shakopee, MN, is the area’s leading body shop specializing in everything from frame straightening, supplemental auto body services, paintless dent repair, auto glass replacement, and much more. The highly trained professionals at Referral Collision know what it takes to properly service vehicles, and now that winter weather is upon us and roads are more dangerous, there are a few things you should

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Collision Repair Industry Roots Similar to the cars we drive, the history of collision repair has evolved over the years. Mass production of the Model T Ford in 1908 made cars affordable to the typical individual. Back then, the most common transportation modes were foot, bicycle, train, ship or horse. The novelty of automobiles meant that only builders of the Model T Ford were qualified to service these vehicles. In the early 1900s, you relied on bike mechanics or machinists for repairs.

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Therefore, proceeding to the second step is unnecessary. However, if the carrying amount exceeds its fair value, the amount of the impairment loss will be calculated. In the calculation, the implied fair value is compared to the carrying amount of Sprint’s goodwill. Implied fair value is

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The Auto Zone’s industry provides parts for the automobiles, great prices and customer service (AutoZone,2018). They have well-off accomplishments and growth of going the additional mile for their customers and they community. AutoZone is the most influential retailer and a leading disperse of automotive replacement parts and accessories in the United States. I would not include new car dealerships or discount stores to AutoZone’s industry, they have been known for thirty-years for selling auto parts and accesories. Making a change will take away from their original strategy and can possible not work.

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The Company also generates revenues from the sale of parts that it packages for sale in bulk or under the private labels of parts manufacturers and national warehouse distributors. The Company groups its products into four classes: power-train, automotive body, chassis and hardware. The power-train product line includes intake and exhaust manifolds, cooling products, harmonic balancers, fluid lines, fluid reservoirs, connectors, four wheel drive components and axles, drain plugs, and other engine, transmission and axle components. Its line of automotive body products include door handles and hinges, window lift motors, window regulators, switches and handles, wiper components, lighting, electrical, and other interior and exterior automotive

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There are some assets that do not generate cash flows independently from those of other assets. For instance, milking machines in the milk production sector which perform tasks such as separating the cream from milk generally do not generate their independent cash flows. The cash flows ultimately come from the sale of the milk products such as custard and yoghurt. The problem lies here as AASB 136 paragraph 67 mentions that an asset’s recoverable amount cannot be determined if the asset’s value cannot be estimated to be close to its fair value less costs to sell and the asset does not create cash flows that are largely independent of those from other assets (Leo et al., 2014). Hence, the recoverable amount can only be determined for the asset’s cash generating unit and impairment tests are conducted in cash generating units.

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When discussing economic downturns the AutoZone organization is not immune. When there is a lower amount of funds present in the market place, then it is inevitable that all will suffer. Money is required to make any purchase, including parts for automobiles. It is important for all organizations including AutoZone to remain focused with its center retail operation, in order to keep up with other competitors within the industry. There are many different factors that can make an impact on how customers have to designate their spending money.

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There are millions of cars in the U.S. and abroad and people are keeping them for longer periods of time; therefore, the need for auto parts is high. AutoZone has more than 5,200 stores in the U.S., Puerto Rico, Mexico and Brazil and is the leading retailer and automotive replacement parts distributor in the U.S. (AutoZone, Inc., n.d.). While AutoZone is primarily geared toward providing parts and services to the do-it-yourself mechanic, they also offer parts distribution to professional repair shops (Parnell, 2014). AutoZone is committed to providing its customers with incomparable customer service and organizational efficiencies across their stores and throughout their supply chains (Moskowitz, 2016).

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Tesla has this unique system of ordering wherein they have eliminated the need for dealerships and maintaining an inventory , as the cars a made to order via website and shipped to the nearest showroom of the

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