Case 3
Brandon Pierson
Professor Chen
FIN6923
Case 3.3
March 30, 2015
Please see the attached “Case 3.3” Spreadsheet.
TASER International Inc. is one of the largest distributors within the security defense manufacturers. Their main product is the taser; often used by your local police and security guards. TASER’s 2010 performance declined dramatically from 2009, a decrease of 17% in sales alone. They argue that they had fewer international and federal orders, plus economic conditions. One thing that caught my eye: Cost of Products Sold. In 2009, Taser had Net Sales of $104,251,560 and paid $40,849,151 in Cost of Products Sold, which leaves them with $63,402,409 in gross margin. That all sounds very good until you look at 2010’s figures. Sales between 2010 and 2009 dropped $17,321,541 yet Costs of Products Sold increased by $713,993. We are not sure why the costs to make/buy these products increased from 2009 but the main point is clear: it’s hurting TASER. We already know that demand for these products decreased, so a shift in the demand curve will cause a change in prices. Perhaps TASER opted for a more durable product, which would also result in increased costs.
In 2010 and 2009, TASER has seen negative Net Income. This will turn away investors as they want their securities to be safe and stable and allow them growth (either by stock value and/or dividends). One of the advantages of using a taser is a decrease in violence and a decrease in personal injuries. However, once you own a taser, there’s no additional products needed to maintain upkeep and use, unlike guns (ammo). Therefore, there is less need for additional orders of their products. If 2010 was such a down year, who’s to say that the future will pick up?
Professor Chen
FIN6923
Case 3.3
March 30, 2015
Please see the attached “Case 3.3” Spreadsheet.
TASER International Inc. is one of the largest distributors within the security defense manufacturers. Their main product is the taser; often used by your local police and security guards. TASER’s 2010 performance declined dramatically from 2009, a decrease of 17% in sales alone. They argue that they had fewer international and federal orders, plus economic conditions. One thing that caught my eye: Cost of Products Sold. In 2009, Taser had Net Sales of $104,251,560 and paid $40,849,151 in Cost of Products Sold, which leaves them with $63,402,409 in gross margin. That all sounds very good until you look at 2010’s figures. Sales between 2010 and 2009 dropped $17,321,541 yet Costs of Products Sold increased by $713,993. We are not sure why the costs to make/buy these products increased from 2009 but the main point is clear: it’s hurting TASER. We already know that demand for these products decreased, so a shift in the demand curve will cause a change in prices. Perhaps TASER opted for a more durable product, which would also result in increased costs.
In 2010 and 2009, TASER has seen negative Net Income. This will turn away investors as they want their securities to be safe and stable and allow them growth (either by stock value and/or dividends). One of the advantages of using a taser is a decrease in violence and a decrease in personal injuries. However, once you own a taser, there’s no additional products needed to maintain upkeep and use, unlike guns (ammo). Therefore, there is less need for additional orders of their products. If 2010 was such a down year, who’s to say that the future will pick up?