Subject category:
Finance, Accounting and Control
Published by:
Ivey Publishing
Version: 1998-10-23
Length: 10 pages
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Abstract
In 1997, Grupo Elektra was a Mexican retailer of home appliances and home electronic products via a network of stores throughout the country. In 1990, the company re-instated an instalment sales plan that granted credit to Mexican consumers for purchases made in Elektra''s stores. Since that time, credit sales, as a proportion of total sales, had continued to grow rapidly.The student is asked to compare the performance of the company with that of a public Canadian company, in a similar industry. The student must consider how to factor into the analysis the fact that Elektra operates in a high inflation environment, which is reflected in its financial statements, and the difference in the way the two companies operate.The Canadian company out-sources its credit facilities, whereas Elektra provides this service to its customers internally. This is a follow-up to the (A) case of the same name, 9A98B032.
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Abstract
In 1997, Grupo Elektra was a Mexican retailer of home appliances and home electronic products via a network of stores throughout the country. In 1990, the company re-instated an instalment sales plan that granted credit to Mexican consumers for purchases made in Elektra''s stores. Since that time, credit sales, as a proportion of total sales, had continued to grow rapidly.The student is asked to compare the performance of the company with that of a public Canadian company, in a similar industry. The student must consider how to factor into the analysis the fact that Elektra operates in a high inflation environment, which is reflected in its financial statements, and the difference in the way the two companies operate.The Canadian company out-sources its credit facilities, whereas Elektra provides this service to its customers internally. This is a follow-up to the (A) case of the same name, 9A98B032.