Deep financial statement analysis- Tech Data Corporation

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// The financial statement analysis gives a real insight into the financial position and performance of a company can be taken. In this context, in the following discussion, the financed statement analysis of Tech Data Corporation has been carried out. Further, financial ratios of Tech Data Corporation has been discussed.//
Introduction:

The financial analysis business implies an analysis of financial statements of a company with a view to making an assessment of the financial performance and position. The financial analysis is done on the historical financial statements in order to find out the viability of the business and estimate the future prospects. The viability of the business is judged based on the profitability, solvency, and liquidity of the company, and the efficiency of the management. For the purpose of this analysis, various types of financial ratios are calculated such as net profit margin, debt service, current ratio, debt-equity ratio, asset turnover ratio, etc. (Gibson, 2010).

In the present paper, the financial analysis has been done on the financial statements of 2014, 2013, 2012 of Tech data Corporation. The position of the company has been compared to the industry average. The industry average figures have been taken based on the average data of Tech Data Corporation and three of its major competitor companies, namely SYNNEX Corporation, Ingram Micro Inc., and Arrow Electronics Inc. All the data used in the analysis has been taken from annual reports of the company considering it as the authentic source of data.
Business History and Future Outlook:
Industry:

The increased use of computers, around the world, has boosted the demand in the industry in the recent past years, and the demand is still in the rising phase. Further, the intensive use of information technology in business, government administration, and education sector has caused the demand for computers to rise sharply. As per the estimations of economists, the business organizations engaged in the wholesale computer business will experience high demand for computers in the coming years. As per market research, the total revenue of the industry, as a whole, has been approx $254 billion for the year 2015 and the same is expected to grow sharply over the period of coming five years (IBISWorld, 2015).
Tech Data Corporation:

Tech Data Corporation, one of the largest distributors of technology products in the world, was founded in the year 1974 in the United States. The company is engaged in the distribution of the products made by the companies such as HP, Apple, Cisco, and Microsoft. The company has its operations spread in North America, South America, Europe, the Middle East, and Africa, which covers approx 100 countries. At present, the company employs 8,900 employees. In the year 1981, the company had revenues of $2 million from the sale of diskettes and other computer supplies. Now, in the years 2014, the revenues of the company has grown to $26,822 million and the company has, in its product portfolio, almost all types of electronic products such as notebooks, tablets, desktop systems, printers, supplies, and components and data center products. In addition to this, the company also provides network support services and other value-added services. The company currently stands at 107th spot on the Fortune 500 company list and has been named as the world's most admired companies. Looking at the growth in terms of revenues of the company, over the past years and the future prospects of growth in the business of computer wholesale market, the company's future seems to be promising (Annual Reports of Tech Data Crop, 2015).
Financial Statement Analysis:
Introduction:

The financial statement analysis of Tech Data Corporation involves the analysis of income statement, balance sheet, and cash flow statement. The analysis of income statement for the years 2012 to 2014 reveals that the company's net profits have reduced slightly. Analysis of balance sheet reveals that the company's total assets have increased over the period of three years ranging from 2012 to 2014. The increase in total assets represents that the company has expanded its operations. The cash flow analysis of the company reveals that cash from operations has decreased to $379 million in 2014 as compared to $525 million in 2012.
Ratio Analysis:

The quantitative analysis of the information contained in the financial statements of Tech Data Corporation has been conducted with a view to get insight into the liquidity, solvency, and profitability of the company and the efficiency of the management (Brigham & Houston, 2011). The data interpretations have been discussed as follows:
Liquidity Ratios:

The liquidity ratios are calculated with a view to assessing the company's ability to pay off the short-term debt. For the purpose of liquidity analysis of Tech Data Corporation, ...