Company's Overall Performance and Industry Performance Factors
The courier industry is an integral part of the global economy, providing transport for goods, materials and documents among businesses and corporations within the UK and beyond. Couriers pick up and deliver documents and packages that need to be sent or received quickly either locally, regionally, or nationally. Couriers also assist in their clients administrative process by providing electronic billing, reference billing, track and trace, national and regional invoicing. The major players in this industry maintain an extensive network of drop-off boxes and staffed drop-off centres in addition to providing on-site package pick-ups (Ibis World, 2012a). The surface transport courier segment is the largest followed by domestic airfreight, international airfreight and mail services.
The global courier industry will grow by an estimated 1.6% per annum over the five years through 2011 to be worth $188.9 billion. Increased economic activity and higher business activity in emerging economies supported strong growth over the past five years (Ibis World, 2012a). Revenue contracted in 2009 and 2010 as the global economic downturn diminished demand for courier services. Global business conditions have stabilized since the global economic downturn. However, sovereign debt concerns in Europe and North America dampened consumer and business sentiment. The uncertainty along with higher fuel costs pushing up service prices will contribute to industry revenue growing at the slower pace of 2.4% in 2011 (Ibis World, 2012b).
Profit margins are an estimated 10.5% in 2011, recovering from an estimated 3.3% profit margin in 2008, a year with record-high fuel prices and the onset of the global economic downturn. The cost of oil soared over the five years. The spiralling costs resulted in industry fuel costs climbing at a similar rate. Many major operators introduced fuel surcharges to cover higher fuel prices, but the small operators, with no or little market power, dominate the global industry (Ibis World, 2012b). As such, small companies were not able to pass on increased costs as fuel surcharges. Increased costs resulted in industry profits falling during the time of high fuel prices leading up to 2008.
When it comes to evaluation of any business, it is necessary to review the performance of the company from view of suppliers and other sources of short term finances which required liquidity analysis of the business (Elliott & Elliott, 2006). Even the company is making substantial profits; it still gets insolvent if it does not have appropriate liquidity management (Dyson, 2007). So, it is necessary for suppliers to analyze ...