Market and Stock Condition of Company - Free Samples to Students

Question: Discuss about the Market and Stock Condition of Company. Answer: Introduction: It is required for every manufacturing company to analyze the market before entering into the market or diversifying the products or the market. Budgeting is a technical tool which is used by the companies to predict the future according to historical data, current trend and future prediction. These budgeting reports are prepared to analyze the revenue and cost in future. So that the strategy could be made accordingly and better step could be taken by the company on time. In this paper, budgeting report of 2018 has been analyzed and consequently, the 2019s future prediction has also been done to analyze the market place for the company. Various trends of industry have been analyzed for this paper. According to the 2018s budget report, it has been found that the company is facing various issues and the net profit of the company would be negative at the end of the year. 2018s budget report of the company has been calculated after considering various trends and data related to the industry and the company. Through the reports of budgeting, it has been found that the net profit of the company is quite negative. Sales revenue of the company is quite lower than the total expenses of the company. It has been analyzed that various cost of the company could be reduced to maintain the performance of the company, sales budget of the company depict about the revenue of the company which is average. Further, the cash collection budget depict about the collection of cash which is running in a better manner. In addition, units are produced according to the trends so that the cost of the company could be reduced. More, direct material and direct labour cost of the company could be cut by the company. Manufacturing overhead budget depicts about entire fixed and variable expenses of the company which are quite high. Lastly, the operating cost budget, inventory budg et, cost of sales budget, monthly cash budget etc depict about the average performance of the company which could be enhanced by the company by making some changes into its operations. Contribution margin for every product: Contribution margin is the margin between the products price and the variable costs of the product. It depict about the per unit profit which could be earned by the company by selling one more unit of the product (FIRER et al, 2012). The more the contribution margin of a company would be the more the profit of the company as at that level it would be easy for the company to achieve the break eve point quickly. The graph f contribution is as follows: Contribution margin of the company has been analyzed and it has been investigated that the contribution of each product of the company is as follows: Contribution margin per unit Bikini Board short Towel Beach Bag Sales price $ 100.00 $ 75.00 $ 45.00 $ 65.00 Less: variable cost $ 32.25 $ 34.25 $ 31.50 $ 26.50 Contribution margin $ 67.75 $ 40.75 $ 13.50 $ 38.50 It depict that the contribution margin of Bikini is more than any other product whereas the contribution margin per unit of Towel is lower. Recommendation regarding manufacturing and selling: Through this report, it has been analyzed that the manufacturing and selling of the company is quite competitive. Through this report, it has been that the performance of the company is quite competitive. Through this report, it has been found that if the manufacturing would be done in the company itself than it would be more [profitable for the company rather than outsourcing the product and sell them by the name of the company. It is also recommended to the company to make some changes into production process to reduce the level of cost and make the competitive advantage of a company in concern of production. Through this report, it has been identified that, this company is require to introduce some marketing policies to enhance the sales of the product so that the company could be more profitable as the fixed cost of the company is quite high than the variable cost of the company. Recommendation regarding cash position: Cash position of the company depict about the position of the cash in hand and bank balance of the company which could be used by the company at any time to meet sudden risk and opportunity of the company. According to the budget analysis of the company, it has been found that the company is required to make some changes into the performance and procedure of the company. Currently the cash position of the company is as follows: Budgeted ending cash inventory -36,458 -53,848 21,840 77,955 1,51,968 1,80,532 1,87,267 2,05,852 1,63,731 1,56,627 2,17,498 2,52,453 Through this reports, it has been found that the cash position of the company has been enhanced from last few months but still company is required to manage over the cash as the current cash is not that much compatible and company is suggested to manage a fixed amount of cash in hand. Analysis over current market situation: Thus through this report, it has been found that the position of the company is not strong and there are various factors which have affected the operations of the company. Through this report, it has been found that mainly the external factors of the market have impacted over the performance and position of the company. Market condition of Australia has been analyzed and through the reports, articles and studies, it has been found that the global financial crisis of UK have impacted in a bad manner to the Australian market which depict about the bad market and stock condition of the company. Due to the financial crisis, the tourist of the country has been reduced and it directly impacted over the products of the company as few people are going over the beach and in swimming pool and thus more sales could not b possible by the company. Further, it has been found that various past data and change into the policy of the company has also been analyzed and it has been estimate that due to few new polices of the Australian government, various changes into the tourism level f the company has been taken place and the changes were in a positive manner. Further, the current situation of the industry and market is enhancing and it has been found that in future, the company would be able to enhance its sales on a huge level. For this report, future prediction has been analyzed further to identify the future changes in the industry and the company. for analyzing a study over the Australian market and cloth industry and tourism industry, it has been analyzed that the performance of the company has been enhanced with a great level and currently few new polices has been launched by the Australian government which impacted over the tourism industry of the country. And due to that, company would also be able to enjoy the better market in the future. Further, the current situation of the industry and market is enhancing and it has been found that in future, the company would be able to enhance its sales on a huge level. It has also been analyzed that the issues of global crisis has been lowered now and it would not at all impact over the market and the company in near future and thus the company would be able to enhance the market more. Conclusion: Through this report, it has been analyzed that according to the 2018s budget report, it has been found that the company is facing various issues and the net profit of the company would be negative at the end of the year. It is also recommended to the company to make some changes into production process to reduce the level of cost and make the competitive advantage of a company in concern of production. Further, it has also been analyzed that the cash position of the company has been enhanced from last few months but still company is required to manage over the cash as the current cash is not that much compatible and company is suggested to manage a fixed amount of cash in hand.