FINANCIAL ANALYSIS

Financial Analysis

Financial Analysis

Financials & Budget

3/5 Year Cash Flow

 

1

2

3

4

5

Year

2012

2013

2014

2015

2016

RECEIPTS

$ m

$ m

$ m

$ m

$ m

Sales Receipts

20.4

26.5

34.5

44.8

58.3

 

Total Receipts

20.4

26.5

34.5

44.8

58.3

PAYMENTS

$ m

$ m

$ m

$ m

$ m

Administration

6.4

6.5

6.5

6.7

6.7

Marketing and advertising

1.1

1.1

1.1

1.1

1.1

Interest Paid

0.2

0.2

0.2

0.2

0.2

 

Total Payments

7.7

7.8

7.8

8.0

8.0

 

Cash Flow

12.8

18.8

26.7

36.9

50.3

 

Opening Bank

1.4

14.2

32.9

59.7

96.6

 

Closing Bank

14.2

32.9

59.7

96.6

146.9

From the perspective of the board of directors, the revenue and profit performance over the five year period that is from 2012 to 2016 show positive trends. This increase in the revenue and profit will be beneficial to invest. In addition to this, the forecast of the revenue structure shows that the sales have been increasing with 30 %. The forecast of revenue potential to the target market is one of the processes leading to the establishment of the objective.

The choice between the different points of view will result in reaching a final forecast. This type of forecasting method is called the top down approach that is a forecast is made and then must determine what their participation in the overall market, but this market segment analysis gives us only a general provision as a whole

Project Budget

1

2

3

4

5

Year

2012

2013

2014

2015

2016

$ m

$ m

$ m

$ m

$ m

Revenue

20.4

26.5

34.5

44.8

58.3

Total Sales

20.4

26.5

34.5

44.8

58.3

Less : Cost of Sales

Total Cost of Sales

6.4

6.5

6.5

6.6

6.7

Gross Profit

14.0

20.0

28.0

38.2

51.6

Less : Operating Expense

Administration

6.4

6.5

6.5

6.7

6.7

Marketing and advertising

1.1

1.1

1.1

1.1

1.1

Operating Profit

6.5

12.4

20.4

30.4

43.8

Less : Interest Expense

Interest Paid

0.2

0.2

0.2

0.2

0.2

Profit Before Tax

6.4

12.3

20.2

30.3

43.6

Less : Tax (20 %)

1.3

2.5

4.0

6.1

8.7

Profit for the year

5.1

9.8

16.2

24.2

34.9

2.0 Competitor Analysis

2. 1 Competitor Analysis

Differences

Wal-mart (A)

Meijer Inc (B)

Safeway Inc. (C)

Low Cost

1

3

2

Distribution

2

1

3

Quality

2

3

1

Range of Products

1

3

1

Technology

1

3

2

3. Preliminary Research Results

The operational risk which is associated i are the risk of direct or indirect losses caused by errors or imperfections in the processes and systems, human error or lack of qualified personnel in the organization or unfavorable external events of non-financial nature, such as fraud. Accordingly, operational risks for the Adara Hotel Co can be classified as follows;

- The risk of personnel; the risk of losses associated with possible errors of staff, fraud, lack of qualified staff instability of the organization, the possibility of adverse changes in labor laws, etc.

- Process risk; the risk of loss associated with errors in the process of conducting operations and calculations on them, their accounting, reporting, pricing, etc. (Jane, 2008)

- Technology risk; the risk of losses due to imperfections in the technology used; lack of capacity systems, the inadequacy of their transactions, robustness and data processing methods or poor quality or inadequate data used, etc. (Groppelli and Ehsan, 2006)

- Risks environment; the risks of losses related to non-financial changes in the environment in which it operates, changes in legislation, policy changes, changes in the tax system, etc. (John, 1996)

- Risks of physical intervention; the risk of loss associated with direct physical interference with the activities of the organization; natural disasters, fire, robbery, terrorism, etc.

Operating risks associated also include the investment risk; it describes the possibility of financial losses in the investment activities of the enterprise. In accordance with the types of activities are separated and the types of investment risk - the risk of real investment and financial risk of investing. All the types of financial risks associated with investment activity, belong to the so-called "complex risks", divided in turn into separate subspecies (Lawrence, ...