Financial Analysis: Radioshack

Running Head: RadioShack Corporation

Financial Analysis: RadioShack Corporation

Financial Analysis: RadioShack Corporation

RadioShack Corporation (The Company) was established in 1921 in Boston Massachusetts. The Company got its name from the wooden structure on Navy ships where the wireless radio and equipment housed. The founders thought the name appropriate for a retail store in which one could purchase radio equipment. The Company was incorporated in Delaware in 1967 and is now one of the leading retailers in consumer electronics goods and services. The Company’s product line includes telephones, televisions, computers and computer accessories, satellite systems, home entertainment, digital cameras, and much more. The Company also provides consumers access to third-party services such as telephone, satellite, and cable.

RadioShack Corporation is a publicly traded company on the New York Stock Exchange (NYSE). The Company began trading on the NYSE on November 14, 1960 under the symbol TAN. At the time The Company name was Tandy Corporation, owned by Charles Tandy. Shareholders now recognize The Company by its ticker symbol, RSH. RSH is located on the NYSE in the Retail (Technology) industry. As of November 5, 2007, The Company ranks closely with some of the top retailers within that industry, including Best Buy and Circuit City. In Market Capitalization, The Company ranks third with Best Buy being first and Circuit City coming in fourth. In Top Dividend Payouts, The Company ranks second with Circuit City being first and Best Buy third. The Chart below is from www.investor.reuters.com and it demonstrates The Company’s ranking within the market.

The most recent annual report for the company posted for the public is for 2006. The financial statements within the 2006 annual reports were audited by PriceWaterhouse Coopers, an Independent Registered Public Accounting Firm. According to the Statement of Cash Flows: The Net Cash Flow from Operating in 2006 was $314.80 million. This figure is consistent with the previous two years being $362.90 million in 2005 and $352.50 million in 2004. Net Cash Flow from Investing in 2006 was -$79.30 million. This is not consistent with the previous two years being $39.30 million in 2005 and -$290.20 million in 2004. The Net Cash Flow from Financing in 2006 was $12.50 million. This figure was not consistent with the previous two years being -$616.11 million in 2005 and -$259.10 million in 2004. The Chart below reveals the changes over the past three years in Net Cash Flow from Operating, Investing, and Financing, according to the Statement of Cash Flows posted at www.radioshackcorporation.com.

RadioShack Corporation

Period Ended 12/31/2006 12/31/2005 12/31/2004 12/31/2003 12/31/2002

Net Cash Flow from Operating 314.8 362.9 352.5 651.9 521.6

Net Cash Flow from Investing -79.3 39.3 -290.2 -188.9 -99

Net Cash Flow from Financing 12.5 -616.1 -259.1 -274.8 -377.5

in millions of USD

In 2006, the Net Change in Cash was positive for The Company for the first time since 2003. The main area of change was Issue (Purchase) of Equity from Net Cash Flows from Financing. In 2004, The Company financed $165.30 million in equity and in 2005, The Company financed $578.30 million in equity. However, in 2006 The Company issued $12.20 million in equity. This change significantly affected the cash position of The Company for the year 2006.

Over the past three years, there have been several changes in the revenues and net incomes for The Company. Some areas that have shown significant changes include Net Income, Assets/Liabilities, Property, Plant and Equipment, Issue (Purchase) of Equity, and Increase (Decrease) in Borrowing. The chart below is from www.radioshackcorporation.com, and demonstrates the changes in revenues and net income over the past years.

Annual Cash Flows Statement

Period Ended 12/31/06 12/31/05 12/31/04 12/31/03 12/31/02

Net Income (Loss) 73.40 267.00 337.20 298.50 263.40

Depreciation/Amortization 128.20 123.80 101.40 92.00 94.70

Net Incr (Decr) in Assets/Liab. 84.10 44.20 -136.00 209.30 120.10

Cash Flow from Disc. Operations n/a n/a n/a n/a n/a

Other Adjustments-Net 29.10 -72.10 49.90 52.10 43.40

Net Cash Flow from Operating 314.80 362.90 352.50 651.90 521.60

Incr (Decr) in Prop. Plant & Equip -79.90 55.30 -226.90 -187.60 -98.20

(Acq.)Disp. of Subs. Business n/a n/a -59.10 4.70 n/a

Incr (Decr) in Securities Invest. n/a n/a n/a n/a n/a

Other Cash Flow from Investing 0.60 -16.00 -4.20 -6.00 -0.80

Net Cash Flow from Investing -79.30 39.30 -290.20 -188.90 -99.00