When it released its first quarter earnings for fiscal 2007, FedEx Corporation also projected that its shipping

Question:

When it released its first quarter earnings for fiscal 2007, FedEx also projected that its shipping volume would be lighter and that its profit growth would be the lowest in years. As reported in the Wall Street Journal (March 22, 2007), FedEx cited the fact that many companies were “thinning inventories to ride out the economic slowdown.”

REQUIRED:
a. What does it mean for a company to “thin” its inventories? How would such a business practice aid a company during an economic recession?
b. Where in the would a reader be able to discern that a company was thinning its inventories? What effect would this have on the reader’s analysis of the company’s financial performance?
c. Do the goods shipped by FedEx appear on FedEx’s balance sheet? Discuss.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...