Chapter 4 - Revenue Recognition

http://finance.yahoo.com/news/RadioShack-4thqtr-profit-apf-1866215015.html?x=0&.v=3

Summary:

RadioShack is an American electronics company in the United States as well as other parts of the world. They focus in home electronics, computers, and cell phones. T-Mobile USA has partnered with RadioShack to provide cell phone plans and prepaid phones and airtime. The article talks about RadioShack having positive revenue in the fourth quarter of 2009. Their revenue increased to $1.32 billion or 4.7 percent. The cause of that revenue increase is because RadioShack has included T-Mobile into their phone carrier which specializes in Sprint Nextel cell phone plans and prepaid phones with airtime. On top of their revenue from T-Mobile, they also had stores in Mexico generating profit.

Reflection:

RadioShack has expanded their products and services notably T-Mobile the phone carrier. Also they increased activity in international level like in Mexico. Investors look for good news in the stock market, but with this revenue increase it does not necessarily mean immediate stock prices to go up. Sometimes you never know what the stock market will do even though with the $1.32 billion profit. The article stated that shares of RadioShack fell 93 cents, or 4.5 percent, to $19.70. Good business strategies for RadioShack was having international operations in Mexico and also expanding their services with the phone carrier T-Mobile.

Personal Reflection:

I think that RadioShack’s shares should have gone up with their $1.32 billion or 4.7 percent increase in revenue, but it resulted to drop their stocks 93 cents. Although you can see that RadioShack made a lot of profit through their product and services, they still had a decrease in stocks. The stock market is unpredictable and may change anytime in any direction. Having international operations in Mexico and expanding their cell phone service with T-Mobile definitely was a good business strategy to generate more revenue. They may have to find other strategies in the future to boost up their revenue because an increase in sales of cell phones this quarter does not mean it will do the same in the next.