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Autozone Financial Case Study

479 Words2 Pages

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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