Gemini Electronics Case Summary

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This memo is in regards to the analysis conducted in the financial condition of Gemini Electronics. The company’s liquidity, asset management, debt paying ability, and profitability were assessed. As a result, appropriate recommendations will be given in order for the company to expand. Gemini Electronics Background Gemini Electronics is a U.S based manufacturer of televisions. The company was founded in 2002 by Frank Wang. Mr. Wang was an engineering student at California Institute of Technology when he had the idea of using the knowledge he gained through research to open a major electronics firm that would compete with the big names such as Samsung, Sony, and LG. Mr. Wang’s plan was to establish itself as a major manufacturer in the U.S allowing big box retailers to shorten their supply chain and pass on the savings on to the consumer. Gemini quickly became the largest TV producer with a 35% market share in the U.S. However, the deep recession of 2008 and 2009 had an impact on the company. In addition, Gemini’s Korean …show more content…

Various ratios are used in this analysis. The organization’s WIP and FG inventory turnover ratios from 2009 demonstrate that the firm takes fewer days to sell both inventories (3.64 days and 73.43 days respectively) than the average firm in the industry In 2009, the total asset turnover ratio for Gemini Electronics was 1.37 while the industry average was 1. This is an indication that Gemini Electronics is generating business at a steady pace. Gemini Electronics is utilizing its fixed assets at a higher rate than other firms in the industry. Their utilization shows the Gemini’s ability to use L, P, & E in order to generate sales. Gemini Electronics A/R is 40.16, which is 25% higher than the industry average. This means Gemini Electronics waits about 40 days to receive payment for goods sold. High levels of A/R can negatively affect the firm and their stock

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