This week's written assignment will be a continuation of your week 1 written assignment, so it should include your work from last week with any edits based on your feedback. This week you will build onto it.
Review the common-size financial statements of at least two businesses within your industry. Provide copies of balance sheets and income statements of each of these businesses and discuss the information you can derive from those financial statements and how you can apply that to your business. The review of the financial statements should be specific to those statements provided, and not a generalized discussion of what financial statements are.
Legal Structure of a Business4 LEGAL STRUCTURE OF A BUSINESS Table of Contents Introduction3 Analysis3 Conclusion4 References5 Introduction The business I choose to edifice is a small departmental store in Canada. The departmental store is a retail industry which will offer several types of households and grocery products to the people of Canada. Further, there is tremendous growth opportunity by setting up departmental stores. It can also be expanded in various parts of Canada along with other parts of the world. This will help to generate huge revenue, profitability and enhance the brand of the departmental stores globally. Analysis There was a huge growth in the retail industry with respect to the general merchandise stores in Canada. The rate of increase was approximately 30%. It was the apparel retailers in the departmental stores in Canada which earned the most. There are over 500 departmental stores in Canada with Winners, Hudson Bay and Nordstrom to name a few (Smith, 2022). My departmental store will be located in Toronto, Canada and will sell various households such as apparels, grocery products and home decors. The NAICS code for my departmental store will be 452210 and will fall in the category of Departmental Stores expect discount departmental stores (NIACS, 2017). The legal structure of the departmental store will be a sole proprietorship business where I will be sole liable person with respect to the liabilities and profits of the company. There will be initial expenses which needs to be incurred prior to commencement of the business such as state and federal taxes, lease of business equipment and office spaces, banking fees and professional services of the business contracts. Further, I have chosen a sole proprietorship business for the departmental store due to various advantages such as low costs, easy setup, tax deduction such as health insurance and easy exit with no or minimal paperwork. Departmental stores such as Walmart is also an example of sole proprietorship business in USA (Stowers, 2022). Conclusion Therefore, the sole proprietorship departmental store setup in Canada will help the people to get goods at prices which is lower than the market price but not at a discount. This will help the customers footfall as they will be attracted due to purchase products due to the already low price of the products. References NIACS, (2017). CHANGES FROM 2012 TO 2017 NAICS STRUCTURES: THE HIGHLIGHTS. Retrieved from: https://www.naics.com/changes-from-2012-2017-naics-structures-highlights-highlights/ Smith, P. (2022). Department stores in Canada- statistics & facts. Statista. Retrieved from: https://www.statista.com/topics/4433/department-stores-in-canada/#dossierKeyfigures Stowers, J. (2022). How to Choose the Best Legal Structure for Your Business. Business News Daily. Retrieved from: https://www.businessnewsdaily.com/8163-choose-legal-business-structure.html Retail Industry Competition4 RETAIL INDUSTRY COMPETITION Table of Contents Introduction3 Analysis3 Conclusion4 References5 Introduction I have chosen to open a departmental store in Canada which will sell various types of grocery items along with household products to the customers. In Canada there are tremendous growth opportunities for development of departmental stores and can generate huge profitability and enhance their brand globally. Analysis My departmental store will be store goods which will be at a price slightly lower than the market price. Also, my departmental store will have various payment mechanism through credit and debit card and online money transfer. Further, my departmental stores will have facilities such as rest room and restaurant where the customer while shopping can take rest and taste delicious foods. Finally, the departmental store will have unique products which will be rarely available in the market. In Canada, if anyone wants to become a sole proprietor then one may need to do the following: 1. We need to register the business in the territory where we need to plan for the business 2. Get the federal business number along with the tax accounts 3. Finally, there is necessity to apply for the permits and various licenses which are necessary for the businesses (Government of Canada, 2013). Ratio Analysis Industry Ratio - 2021 Accounts Receivable Turnover (Days) 9 Profit Margin 4.70% Return on Assets 6.10% Current Ratio 1.27 Inventory Turnover Ratio (Days) 56 Asset Turnover (Days) 278 Debt to Assets 2 Times Interest Earned 7.72 In the last eight years, there has been a growth of 30% in the retail sales stores in Canada. While the performance of departmental stores in United States was low it was Winners in 2019, the discount store in Canada in apparel business performed well (Smith, 2022). Finally, the common ratios which are significant for the retail stores in Canada are the inventory turnover ratio which is 56 days and signifies the number of days required by the departmental stores to sell their stocks or inventories to the customers (Ready Ratios, 2021). Conclusion Therefore, it can be stated that the departmental store can operate its business operations smoothly and generate huge profits in the future. References Government of Canada, (2013). Registering a sole proprietorship or partnership. Retrieved from: https://www.canada.ca/en/services/business/start/register-with-gov/register-sole-prop-partner.html Ready Ratios, (2021). Retail Trade: average industry financial ratios for U.S. listed companies. Retrieved from: https://www.readyratios.com/sec/industry/G/ Smith, P. (2022). Department stores in Canada- statistics & facts. Statista. Retrieved: https://www.statista.com/topics/4433/department-stores-in-canada/#dossierKeyfigures