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ADVANCE AUTO PARTS, INC. Robert C. Dunwoody III ACG2021 SECTION 005

ADVANCE AUTO PARTS, INC. Robert C. Dunwoody III ACG2021 SECTION 005 . Executive Summary.

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ADVANCE AUTO PARTS, INC. Robert C. Dunwoody III ACG2021 SECTION 005

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  1. ADVANCE AUTO PARTS, INC.Robert C. Dunwoody III ACG2021 SECTION 005

  2. Executive Summary The fisical year of 2009 was successful in that profits were above the previous year. I believe that next year the profits will be considerably higher than those of this year. Net income profits were only $30,000 over the previous year which isn’t a lot for a major corporation such as Advance Auto Parts, but they still made profit. Net income for 2009 was $270,373 Advance Auto Parts 10k report: http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Mzk4MTV8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1

  3. Part A. Introduction • Chief Executive Officer– Darren R. Jackson • Home Office- 5008 Airport Rd, Roanoke, Virginia 24012 • Ending date of last fiscal year- January 2, 2010 • Advance Auto Parts primarily sells aftermarket replacement automobile parts, oil, and chemicals such as freon, antifreeze, and fuel additives. However they also deal in selling major items such as engines. • The main area of activity is throughout most of the U.S., but they also have stores in the Virgin Islands and Puerto Rico.

  4. Part A. Audit Report • Auditors: Deloite & Touche LLP Deloite & Touche LLP concluded from their audit, Advance Auto Parts has reported accurate and credible financial statements. They also concluded statements meet the generally accepted accounting principles.

  5. Part A. Stock Market Information As of 2/26/2010 • NYSE: AAP- $40.80 as of February 26, 2010 • Trading Range(12 mo)- $29.50-$47.41 • Dividend per Share- $0.06 • In my opinion, I would hold my stock invested in the company until the value either increases so I can sell, or decreases so I could buy. Right now, the price of stock is in the middle of the price range.

  6. Part B. Industry Situation and Company Plans As of January 2, 2010, Advance Auto Parts has made significant increases from the past year. 2009’s net income was $270,000 which is $30,000 more than 2008. The company is also making changes to help make new customers and keep lifetime customers and trying to increase their revenues throughout 2010 and on. Letter for the stockholders:http://www.sec.gov/comments/s7-10-09/s71009-277.pdf

  7. Part C. Income Statement Advance Auto Parts set up their income statement in a single step form. This company has Had more income and less expenses than the previous year, resulting in higher income

  8. Part C. Balance Sheet Advance Auto Parts’ assets increased by about one hundred thousand dollars from the end of 2008 to the end of 2009. Liabilities increased about $200,000 and stockholders equity decreased about $100,000.

  9. Part C. Statement of Cash Flows Cash flows from operations are exceptionally more than net income over the past two years. Cash flows from operations were $699,690 for 2009 and $478,739 for 2008. Net income was $270,373 for 2009 and $238,038 for 2008. Advance Auto Parts has been growing through investing activities. Over the past two years, they have invested about $378,000 in property and equipment. This companies primary source of financing is from borrowing from credit facilities. Advance Auto Parts has shown a large increase in cash over the past two years.

  10. Part D. Accounting Policies Cash:is all cash deposits and is recognized at the time of the sale Inventories: 95% of inventories are recorded using the LIFO method. Property Plant and Equipment: Recorded at cost and depreciation is recorded as necessary.

  11. Part E. Financial AnalysisLiquidity Ratios The liquidity ratios all show that the company has decreased, but by only a small amount. Advance Auto Parts are in good shape to expand there business, or just sit comfortably for a while.

  12. Part E. Financial AnalysisProfitability Ratios • All aspects involving profitability ratios increased from 2008 to 2009, • which shows the company has been more successful than the previous year.

  13. Part E. Financial AnalysisSolvency Ratio During these past two years the bank has primarily controlled the company. But Advance Auto Parts is decreasing their liabilities, so the investors may have control of the company next year.

  14. Part E. Financial AnalysisMarket Strength Ratios Though the earnings per share were higher in 2009, the dividend yield was higher in 2008.

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