See attached files.
CFO Project: Staples as a case study
- develop a comprehensive report to your CEO based on the topics learnt under Strategic Financial Managment
- analyze the company in this context and provide recommendations
- include research to make/support your strategy/policy recommendations
- Your report should include an assessment of your company's corporate governance "readiness" and provide suitable recommendations to ensure compliance with the Sarbanes-Oxley Act of 2002 and new regulations published by the regulatory bodies.
- conduct an analysis of the firm's financial statements and policies as a risk management exercise for the benefit of the company CEO. Look for any "bodies" buried in the statements and associated notes, as well as the types of information disclosed to the public (e.g., pro forma earnings).
- Your goal here is to identify any areas where the firm is vulnerable to SEC action (fraud or otherwise) and report these to the CEO as a preemptive risk mitigation action
- assess the integrity and rigor of the firm's corporate governance structure (Board, Audit Committee, stock options policies, pension fund policy, etc.) to identify any weaknesses you can find and provide recommendations to strengthen governance policy.
- Calculations of different Business ratios are expected in your analysis
Check the link below for detailed" financials: Latest results" for Staples if the above attachments are not sufficient to do the report (when on the site, pick company range 101-200 , pick #108 which is Staples from the drop down under current view and click on Financials : Latest Results ). Alternatively, go to Yahoo finance.com and search for Staples Financial reports.
Staples Inc was established in 1985 to deal with office supplies and since then the company has into a market leader in office supplies. Staples Inc has operations in 26 countries spread out across North America, South America, Europe, Asia and Australia (Reuters, 2011). The company has three business divisions that include International operations, North American delivery, and North American retail.
In North American delivery business segment Staples operates in the United States and in Canada whereby the company sells and delivers office supplies and services directly to customers and businesses. This segment mainly operates through online orders from customers and has Staples business advantage that focuses on mid-sized organizations and national advantage that aims at Fortune 1000 organizations. Online trading is carried through Staples.com and Quill.com that focus on mid-sized businesses, small businesses and home offices.
North American retail business segment consists of company stores that offer office products and operate in United States and Canada. The company has 1,575 stores in the United States and 325 in Canada (Reuters, 2011). The company employs different strategies in different locations since its stores comprise of four formats developed to suit traits of each location.
Staples' international operations are carried out in 24 countries and in its European venture it sells products to retail, contract and catalog customers. The company has 332 stores in United Kingdom, Portugal, Netherlands and Germany (Reuters, 2011). The company practices international trading through acquiring smaller business and also through joint venture such as partnerships with UB Express in Taiwan and Pantaloon Retail Limited in India. Staples Inc faces competition from organizations, such as Apple, Wal-Mart, Office Depot, OfficeMax, Tesco, Best buy, FedEx Office and Lyreco (Reuters, 2011).
Staples Inc is governed through the Board of Directors, executive offices and managers. Corporate Governance Guidelines (2011) provides that the company should have 11 to 15 members and mainly comprises independent directors but currently the board is comprised of 12 members. . The board should also have a limited number of management directors including the Chief Executive Officer. In order for a director to qualify to be a member of the Board of Directors he or she must be able to act effectively on behalf of all stockholders in the company. Staples' corporate governance guideline provides that directors should promote stockholders' best interest and should comply with relevant laws and regulations. They should with the responsibility of maintaining accounting, financial and other controls in the company. The company has six executive officers that include the Chairman and chief Executive Officer, Presidents for the three business divisions, Chief Operating Officer and Chief Financial Officer.
Staples has a code of conduct detailing what is expected from organizational members in different but mainly focus on integrity when dealing with customers and associates. The Code of Conduct (2011) provides that commitment to ethics will assist the company in succeeding financially and also in gaining favorable customer perception. Every member of the organization is expected to take personal responsibility in all activities and is expected to do the right thing for the company and also for company stakeholders who include customers, associates and suppliers.
Mcconomy & Bujaki (2000) provides that corporate governance is an effective tool in building transparency and establishing fairness in company operations. Effective corporate governance also leads to organizational efficiency by ensuring that various aspects of company processes and systems are congruent with each other. Staples' corporate governance in readiness for new regulations is fairly performing. An example of regulation requiring compliance is Sarbanes Oxley Act which affects the company on issuing concerning audits, corporate responsibility and financial disclosures.
The Act provides that senior executives in a company are responsible for accuracy of financial reports and also their completeness. Staples Inc is ready on this requirement since directors are charged with responsibility to maintain internal controls and by effectively managing internal controls directors are able to ensure that organizational financial reports are accurate. Section 302 of Sarbanes Oxley Act provides that a company's principal officers approve that company financial reports are accurate and complete (Hemphill, 2005). Since the Chief Executive Officer is a member of the Board of Directors he is involved in ensuring integrity of financial reports thus the company is ready for that provision. Corporate governance in Staples is ready on provision requiring a company to have internal controls to ensure accuracy in reports and disclosures since it already has internal controls over organizational accounting and financial activities.
Recommendations to Staples Inc on improving compliance include the use of information technology as means to improve control over accuracy of financial reports. :
Another regulation affecting Staples ...
The expert develops, analyzes and research a company assessment. A comprehensive report is examined.