Rona Vs Canadian Tire

section 1 RONA INCORPORATED VS. CANADIAN TIRE gage WORD find out: 2500 Introduction The mutual alliance lines investment in each RONA Inc. or Canadian Tire Corporation (CTC) must be concord to a set of investment criteria that reflect the funds goals and risk tolerance. Since past underperforming investments have negatively wedge the fund, the investment must be stable and low-risk. Specifically, the decision criteria atomic make sense 18: 1. Stability & liquidity 2. Growth prospects and earnings 3. soft analysis of industry and agonistical position 4. Management pass over record and competency The purpose of this report is to decompose and look at an investment, while placing an emphasis on conservative and undifferentiated method of accounting policies. Industry The Canadian retail industry has been greatly conjure by the recent recession, leading to greater price grounds amongst consumers. Specifically, the home improvement industry has contracted by 1.2% in 2009. Companies have responded by increasing sales promotions and discounting in youth hostel to grow their share of the declining market. This has increase competition and deferred new entrants. However, as the economy recovers, the industry is expected to grow at a forecasted compounded annual growth rate of 3% until 2014.

The Canadian general merchandise retailing industry is amplyly competitive. A major risk is the potential for downward price prickle from competitors like Wal Mart and Sears, which would be detrimental to margins. Accordingl y, retailers have change magnitude their fo! cus on private label brands which offer high margins than comparable products. On average, RONA will be impacted less(prenominal) by economic downturns compared to CTC. This is due the inherent infeasibility of delaying current indispensable home improvement projects and repairs. RONA and CTC are both touched by seasonality; however it leads to greater volatility in CTCs revenue due to the companys larger...If you want to give turn off a full essay, order it on our website: BestEssayCheap.com

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