Accounting Financial Analysis Report Category of Business

Questions: 1: Last month, your friend, Jeremy, used Carsales.com when purchasing his latest Ferrari. He tells you Carsales.com must be a retailer because he has used the company to purchase a car. Do you agree with Jeremy regarding the category of business for Carsales.com? 2: CarMax Inc is a US company which has identified involvement in the sale of used vehicles in the United States as one of its core operating activities. CarMax Inc reported revenue of US$15,149.7m for the 2016 financial year. Your friend, Jeremy, tells you this means CarMax Inc has a much better financial performance than Carsales.com, which only reported revenue of $311.8m in its latest Income Statement (Carsales.com, 2015, p.42). You think there are a number of issues with Jeremys statement identify and explain three issues with his statement. Answers: 1.No, I do not agree with the thought of Jeremy regarding the business category of Carsales.com. He thought that carsales.com is a retailer just because he used the company to buy his Ferrari car. But it's not like that. Here Carsales.com company can lead as "Dealer", not a "Retailer". There have some fundamental differences between a dealer and a retailer. Mainly retailers are like the mirror of sellers. They sales products to the consumer. The retailers may be defined as a particular business as well as a person, who sell products to the consumer. It's just like a wholesaler and supplier. But the company, carsalers.com is a dealer in trade cycle, who fixed the deals of cars (Independent used car dealer 1996). That is the individuals like Jeremy buy a car from another distributor. The company deal with such cars and the distribution of the vehicles takes place in several area or countries. Qualitative evidence from Director's annual report com also provides finance, information, finance as well as other services sold to the consumer in the automotive industry. According to the annual report, Carsales.com dealer revenue up 7% on PCP all over. The dealer revenue under finance and relates services of $59.4m (Boulatov et al. 2009). Income development of 21% PCP inferable dealer, private and display promotion volume development com offer of net benefit after the assessment was $3,478,000 and acquired another dealer like vMotors in December 2014. According to the above evidence, it is clear that Carsales.com is not a retailer. The company set deals for buying or selling cars. 2.According to my knowledge regarding both the companies mentioned above, yes, there are some issues in the statement of Jeremy. I think that Jeremy has judged both these company by their annual revenue. There are some issues which can be found in Jeremys statement, and the issues are mentioned and described below. One of the main issue or problems with Jeremy is that he has mistaken to differentiate both of the company. Though both CarMax Inc and Carsales.com deals with car but Jeremy should have known that CarMax deals with old second-hand cars while Carsales.com sells a new car. It is quite evident that the selling rate of the second-hand car is more than the sales rate of the new cars or vehicles (Sales tax rate change summary 2011). The second issue is that as CarMax only deals with second-hand cars, they cannot provide any latest facility to their customers. Where on the contrary as Carsales.com sales new cars they can offer latest models and different cars to the customers. Thus the Carsales.com is better with their customer satisfaction. There is another fact which can be regarded as one of the issues in Jeremys statement that is, to some extent companies like CarMax has to depend on upon companies like Casals.com. Because if they would not have sold the new cars, CarMax would have never been able to sell the second-hand cars. These are the main issues in the statement of Jeremy, though he is right about the financial performance of both the company (Financial performance 2013). References Boulatov, A., Hatch, B., Johnson, S. and Lei, A. (2009). Dealer attention, the speed of quote adjustment to information, and net dealer revenue.Journal of Banking Finance, 33(8), pp.1531-1542. Financial performance. (2013). London: BPP Learning Media Ltd. Independent used car dealer. (1996). [Washington, D.C.?]: Dept. of the Treasury, Internal Revenue Service. Sales tax rate change summary. (2011). [Springfield, Ill.]: Illinois Dept. of Revenue.