Gemini Electronics

Gemini Electronics was a US based manufacturer of LCD televisions, founded in

2002 by Frank Wang. By 2005 it was the largest TV producer in US with 35% market
share. It went public in December 2004. Its growth options were:
1. Expand geographically
2. Expand product offering by designing new products or through mergers and
acquisitions
Comparison with Industry averages:
Geminis operating and gross profit margin are less than industry average but its
net profit margin is much more(7.97%) than that of industry(3.22%).
Its return on Assets and return on equity is much more than average and shows that
the company is able to utilize its assets and shareholders equity effectively.
Both fixed and total asset turnover is also better than its competitors and thus the
company can efficiently utilize its asset to generate sales.
If we see the turnover rate of the inventory, parts inventory turnover is higher than
average which is due to high stocks due to long delivery times. However, WIP
inventory and FG inventory turnover are less than industry averages which shows
that Gemini can sell its products faster than its competitors.
A high cash ratio wrt industry average shows companys ability to supply cash in
times of need. This is high also because the firm is debt leveraged which requires its
current ratio to be greater than 1.5. The companys average current ratio is 2.46
against industry average of 2.84. Its debt to equity ratio is also high(1.3) making it
financially leveraged.