someone said:
Oh here's the person who has no idea about accounting practices.
Actually I can kill two birds with one stone since why accounting practices are done a certain way and why we won't stock 200+.
Let's look at best buy:
http://www.ecommercetimes.com/story/54681.html
They have approximately 300 stores and 150 million in profit a year. Which means profit per month is about $50k per store or 150 million / 300 stores / 12 months a year.
To understand accrual accounting one needs to understand we buy enough stock of items for let's say in this case a year at the beginning of the year. But we only declare that we have bought enough for the month. This would seem like lying since we now have more items than we actually bought. According to Mr.Psorcerer I am committing tax fraud. He's wrong, this is just normal accrual accounting. He's thinking of cash based accounting, but we're not going to go into that because only companies that have no stock can do that (read Sony and Nintendo at the moment, not MS since they have stock).
OK so in a year we obviously don't want to over buy so much it negates our profits. But let's pretend we're stupid and we'll make it exactly at our yearly profits or 50,000 x 12=600,000. Let's live in a magical world to simplify, we will have 100 types of items at $100 each. Normally note that they have many more types of items than 100 and more expensive than $100, so this is actually to the benefit of the moron who said 200+ xbox 360s. So to find our yearly budget of per item we do 600,000/100/100 = 60. This says of high ticket items per best buy we only want to carry around 60 of that item. That's a lot, you'll note again my numbers are inflated to the benefit of the moron. More likely the number should be 5 or less. Granted an XBox 360 is very very popular so a big ticket store might actually carry 20 or even possibly 50 because it's such a hot seller and they want the item in their store. Which means another big ticket item might only have 1 item or even "out of stock" as you have all seen before.
Yes the Xbox is taking the place in their budget of that stereo you wanted, how sad.
Eitherway, to say that they have 200+ means they have over $40k in dead inventory. So that would mean they stocked so many Xboxes they are willing to totally negate a months profit just in stocking xboxes. That's insane, unless they expected 200+ would sell in less than a month. In which case this would say that Xbox 360's are actually so hot they'd have well over 200 million sold.
This all being said, Monty the reality is 8.3 million is a reasonable number to say are actually installed and being used in homes due to returns and unsold used items. But again, all the numbers are 100% wrong.
That's all nice. Except I'm not inclined to believe your reasoning cause you didn't do homework on BB.
BB operates 1100 stores in NA. And also corporate income for last year was 1.1 Billion dollars, on revenues of 30.8 Billion dollars. Income is revenue less cost of revenue (i.e. all expenses to sell items, as in purchasing items directly from manufacturer and having them transported to the store) and also less the cost of selling, which is building, employees, and administrative expenses.
This represents the actual cash on hand after paying for everything else to run your business.
150 million LMAO...yeah right.
I'll go to BB this weekend and take some photos, post em on my myspace page, you can count for yourself.
As, I said before... I stay here for the entertainment... you guys do not disappoint!
