Staples Inc Case Analysis

888 Words 4 Pages
Staples, Inc., the world largest office supply chain store, serves businesses of all sizes and consumers in North America, Europe, Australia, South America and Asia. The first office products store was opened in Brighton, Massachusetts in 1986. Staples, Inc. offers three business segments []: North American Stores & Online, North American Commercial, and International Operations. The North American Stores & Online segment includes the company 's retail stores and Staples.com businesses in the U.S. and Canada. The major strategy of this segment is to provide the easy-to-shop stores and convenient online shopping for individuals. For business customers, Staples, Inc. provides products and services by Staples Advantage and Quill.com. The International …show more content…
uses the assumption of weighted-average cost of inventory. Office Depot, Inc. uses the same assumption, except in certain European Countries, where the Company uses the first-in-first-out method for the operations.
Both companies’ inventories are related to the office products. These products don’t have expiration date as perishable goods do and they have slightly different costs for the same type of product due to sourcing difference. So the weighted-average cost method used here is reasonable and better for inventory measurement.

¬ Depreciation Method Both companies use the straight-line method to recognize the depreciation and amortization. For Staples, Inc., the estimated useful lives for its assets are categorized as: 40 years for buildings; 3-10 years for furniture and fixtures; and 3-10 years for equipment, which includes computer equipment and software with estimated useful lives of 3-7 years. For Office Depot, Inc., the useful lives of depreciation assets are estimated to be 15-30 years for building and 3-10 years for furniture, fixtures and equipment.

¬ Horizontal
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In 2014, sales and profits in Australia were less than expected, and challenges remain in generating sufficient growth to improve the long-term profitability of the business. As for its China reporting unit, sales in 2014 declined as the business decided to exit certain unprofitable arrangements, whereas growth in ecommerce sales was not sufficient to offset the loss of these arrangements. Future events and changing market conditions may impact the Company’s key inputs and may result in future goodwill impairment charges which could have a material negative effect on the Company’s operations

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