Discuss about the Business Inf for Financial Analysis.
Table 1: Income Statement
Table 2: Balance Sheet
Table 3: Cash Flow Statement
Goal Seek Analysis
Table 4: Goal-Seek Analysis of Income Statement
Goal-Seek Analysis is a tool that is used in the spreadsheet to determine the impact of changes of a value on the other. It is necessary that both the values must be related with a formula. It is specially used when the input required for getting a desired output is not known (University of Memphis, 2016). Lastly, the goal seek analysis as presented in the income statement (Table 4) shows that in order to have an increase in the revenue AUD 80,000 thousand in the first year the company has to earn a high revenue amounting to AUD 122, 500 thousand in that particular year. It is because the operating expense of the company is quite high and the rise in revenue is the only scope of bringing about a hike in the profit after tax to AUD 80,000 thousand from AUD 46,363 thousand. The new revenue should be AUD 122,500 dollars from AUD 88,863 dollars. Increment in the level of revenue also involves the rise in earnings before interest, tax and depreciation from AUD 38, 863 thousand to AUD 72,500 thousand. The profit before tax also rose to AUD 56,363 thousand as a result of the hike in the revenue. Thus, rise in revenue seems to be the only way to achieve high profit after tax, keeping all the costs constant.
Revenue gas witnessed rise from the first year to the last year. In the beginning the revenue of the company was AUD 88,863 thousand and it rose to AUD 1331,168 thousand in the eight year. It clearly reflects efficiency both in pricing and product decisions. First of all the marketing division was able to apply proper marketing mix strategy. The demand forecasting was appropriate enough to know the tastes and preferences of the consumers that led to acceptance of the product. Moreover, the economic condition such as GDP, GNP, per capita income, purchasing power parity was thoroughly studied to set up the pricing strategies as per the income of the consumer. The promotional activities were also very efficient. Appropriate selection of promotion mix and promotion vehicle was used. The selection of the place of distribution was done after proper analysis. It involved use of both online techniques and physical channels that led to proper push of the product into the market. Sales and trade promotion served as a vital tool for increasing the revenue.
The spreadsheet shows that the financial trend of the company is quite good. In the first year, the profit after tax was 46,363 thousand AUD and in the succeeding years there has been a steady rise in the level of profit after tax. In the 8th consecutive year, the company is found to have a profit of AUD 54, 318 thousand. The sparkline also shows that there has been a rise in the profit after tax during the eight consecutive years. However, in case of revenue earnings it can be said that there was a constant rate of growth over the eight years as depicted by the sparkline. In the first year, the level of revenue was AUD 88, 863 thousand whereas in the eighth year it was AUD 96,602 thou sand. It shows that the company has the potential to cover all the costs of production. It also reveals the fact that paying of tax has not been a burden for the company, which further reflects good financial planning made by the finance manager.
Similar to profit after tax, the values of profit before tax also witnessed a high growth rate over the period from AUD 56,363 thousand in the first year to AUD 64, 424 thousand at6 the end of the 8th year. The earnings before interest, tax and depreciation rose sharply to AUD 44,825 thousand in the eighth year from AUD 38,863 thousand in the first year. However, the inefficiency is represented by the sharp upward rising operating expense. In the first year the operating expenses was AUD 50,000 thousand, which continuously went on rising and reached 51776 thousand AUD after 8 years. This indicates that the management was unable to curtail down the expenses and even in the implementation of the efficient cost cutting measures into their operations.
The balance sheet also indicates a healthy and sound position of the company. It shows that the total of assets have witnessed a high rise. In the first year, the total of assets was AUD 44, 350 thousand whereas in the eighth year it was AUD 154, 860 thousand. Moreover, the fall in the level of cash over the years show that there was no left-cash of cash and that it was utilized for productive purposes. The current liabilities were AUD 1,350 thousand in first year whereas in 8th year it was AUD 14, 447 thousand. However, the current assets were AUD 14, 350thosand in the beginning and rose to AUD 82, 494 thousands in the last year. The excess of current assets over current liabilities therefore provides a clear sign of high short-term liquidity present with the company. The cash flow analysis also shows a rising trend of cash inflow from AUD 6,000 thousand to AUD 12,137 thousand in the last year, which is a positive sign.
At present, online selling methods are gaining high prevalence because the customers consider that reaching out to traditional shops and malls is difficult and involves loss of time and energy. Using internet as a tool of marketing, August Online Technology can stay connected with their customers at all times (Intef, n.d.). Online discussion at the time of sale is an immensely flexible and low cost method used by the companies for understanding the views and grievances of the customer. This online discussion is conducted by creating a chat option on the website of the company. In many cases a customer can be attracted by this online chatting facility of August Online. The availability of solution for the problems of the customers through the chat option in turn boosts up the level of association between the customer and the company. (Zinkhan et.al., 2003).
August Online Tech can resort to take help from a web content editor who can help them to create a website. In the website the company can put the details of its features and services that will attract the interests of its clients. The company can also resort to create a provision on the web page where it can display its strategic goals, vision and mission so that the clients feel more attracted towards the company (Online Tech, 2016;). The company can also resort to host its website on Mozilla or use Google app engine to make the contents of the company available on Google. Dropbox is another option that can be used to store the unique features of the IT solutions on the web. A person having internet connection can resort to use the information stored in the web and retrieve salient features of the IT services offered by August Online Tech. (Mozilla Developer Network, 2016). Cloud hosting can also be implemented by the company as an online storage facility to publish it contents on the internet, thereby allowing the online database to be accessed by any user to know about the company and its services (1Online Tech., 2016).
Social media is one of the most important online platforms that are used by companies to market their products and services. August online can resort to digital marketing by creating profiles and accounts on facebook, twitter, Google + and LinkedIn. This will help in making contacts at both business and personal level. Blog can also be considered a very important tool for online marketing that will help in maintaining regular discussions among its stakeholders in turn assisting in the efficient marketing of the company (Tutorials Point (I) Pvt. Ltd, 2015.; Evan & McKee, 2010).In the modern world, the use of internet has become so flexible that it can also be used on a mobile phone. August Online Tech can resort to use a mobile application to advertise about itself. Affiliate marketing is another tool of marketing that can be used by the August Online Tech (Olenski, 2014; Mobile Marketing Association, 2011).
The marketing of products and services on the online platform is not free from security issues. The hackers who resort to leak the authentic and secured information by corrupting the website of a company pose one of the most wide-spread threats, despite the existence of tight security (Ackerman & Davis, 2003). Another type of network issue that is faced by August Online Tech. is eavesdropping, which is referred to as monitoring of the website by some alien person. The website of the company can be altered by the hackers that might lead to unwanted and false display of records on the company websites, generally termed as data modification (Microsoft, 2016).
Identified spoofing can be regarded as another type of threat that is predominantly found in case of online marketing. It involves the use of programs to create false IP address that cannot be distinguished from the original website. The hacker can easily make changes in the company’s website after IP address spoofing. The various other type of attacks includes application layer attack, sniffer attack, man-in the middle attack, password based attack, compromised key attack, denial of service attack, SYN flooding, spam and address forgery, smurfing and routing attacks. The local area network (LAN) can also be attacked by an employee of an organization by accessing the password that is required for a secured website (Microsoft, 2016; Anderson, 2008).
It is therefore a matter of great concern to secure the network of August Online Tech. One of the first steps to do so is configuration management, which involves the removal of all types of clues from the website that can help in the hacking of password easily. A centralized control mechanism should be introduced so that a vigilance and synchronization is possible 24×7. Firewalls play a vital role in blocking the harmful traffics. Circuit gateways can be regarded as an advanced tool to stop interference of hackers. The other mechanisms that can be used to stop harmful penetration into the network includes application relays, combinations , egress filtering and coordinated match between technical solutions and algorithms (Niranjanamurthy & Chahar, 2013; Anderson, 2008).
References
Ackerman, M S & Davis, D T 2003, ‘Privacy and security issues in e-commerce’. New economy handbook, pp. 911-930.
Anderson, R 2008, , Security engineering, John Wiley & Sons, India.
Evan, D & McKee, J 2010, ‘Praise for social media marketing: the next generation of business engagement’, The Next Generation Social Media Marketing ,pp. 1-377
Intef 2011, ‘The benefits of online shopping’, Shopping Trends, pp. 1-2.
Microsoft 2016, Common types of network attacks, Library, viewed 20 September 2016, <https://technet.microsoft.com/en-us/library/cc959354.aspx>
Mobile Marketing Association 2011, ‘Mobile advertising guidelines’, Version 5.0, pp. 2-24.
Mozilla Developer Network 2016, Publishing your website. What are the options? viewed 20 September 2016, <https://developer.mozilla.org/en-US/docs/Learn/Getting_started_with_the_web/Publishing_your_website>
Niranjanamurthy, M & Chahar, D D 2013, ‘The study of e-commerce security issues and solutions, International Journal of Advanced Research in Computer and Communication Engineering, vol. 2, no. 7, pp. 1-12.
Olenski, S 2014, 4 myths about affiliate marketing you need to know, Forbes, viewed 20 September 2016, <https://www.forbes.com/sites/steveolenski/2014/07/08/4-myths-about-affiliate-marketing-you-need-to-know/#6c60ec24733b>
Online Tech 2016, Exceptional people. exceptional experiences. Company, viewed 20 September 2016, <https://www.onlinetech.com/products/cloud-computing-hosting>
1Online Tech 2016, Enterprise architectures for every business, Products, viewed 20 September 2016, <https://www.onlinetech.com/products/cloud-computing-hosting>
Tutorials Point (I) Pvt. Ltd. 2015, ‘Social media marketing’, Gaining Traffic Website, pp. 1-57.
University of Memphis 2016, ‘Excel – goal seek’, CIVL 1112, pp. 1-2
Zinkhan, G M, Kwak H, Morrison, M & Peters, C A 2003, ‘Web-based chatting: consumer communication in cyberspace’, Journal of Consumer Psychology, vol. 13, pp. 18-27.
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