Radio Shack Corporation; 2013 Annual Report Summary

Principles of Accounting I/ XACC/290

August 17th, 2014

Radio Shack Corporation; 2013 Annual Report Summary

Radio Shack Corporation, headquartered in downtown Fort Worth Texas, was founded in 1921 in Boston, Massachusetts by Theodore and Milton Deutschmann (Radio Shack Corporation, 2014). A company started with a specific mission of serving the needs of radio officers aboard naval ships, has over the years grown into a leading distributor of electronics. According to Radio Shack Corporation (2014), they are a “multifaceted, multibillion-dollar electronics retailer with more than 27,000 associates, and a vast retail network that includes more than 4,000 company-operated stores in the United States, over 270 company-operated stores in Mexico, and approximately 950 dealer and other outlets worldwide” (An unexpected beginning). Recent years however have been tough for the electronic retail giant, and this is clearly evidenced in their recent financial statements. In fact, facing delisting from the New York Stock Exchange, and not even having enough cash to close stores, Radio Shack faces a very uncertain future, and must take drastic action to survive. Radio Shack’s 2013 annual report is highlighted by a summary from the CEO, Joseph Magnacca. In his opening discourse he discusses how difficult 2013 was, and in fact mentions that Radio Shack has struggled for several years to find its place in the market, and most importantly, with customers (Radio Shack, 2014). As of the 2013 annual report, Radio Shack currently had nearly $1.6 billion in total assets, of which fully half were comprised of inventory. The 2013 assets represent a 30% reduction from 2012 assets which were about $2.3 billion. The asset which saw the greatest reduction was cash and cash equivalents, which at $179.8