Pocktech Company Case Study
Essay by protectionsss • April 12, 2017 • Business Plan • 8,664 Words (35 Pages) • 1,099 Views
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Table of Contents
- Introduction P.3
- Problem Definition P.4
- Goals or objectives P.4
- Financial Statement and Analysis P.6
5. Alternative Identification P.14
6. Risk Management P.28
7. Indivual Conclusions p.34
Introduction
PockTech is a one-year company in the field of IT. We design smartphones and make them produced by our subcontractors in china.
We employ a hundred of people in our offices, a majority of engineers in order to develop new phones and new technologies
We are at the moment a small company, and customers do not know us. This is why our market is not very large. But our goal in the next five years is to be in the Hong-Kong’s listed companies.
Our financial health is quite good but the sales of our only product on the market are decreasing. This is why we are asking ourselves if we should launch a new product.
In this report, you will find all our process to analyse the financial statements, choose the best product to launch, the greatest bank to borrow money for our investment and our risk analysis and management.
Problem Definition
We are a new company but we already have a product on the market. The problem is that the product sales are declining, so we need to launch a new product to boost our business. The first question we can ask our self is: What type of new Smartphone do we have to launch? Should we launch a completely new phone or just an upgrade from our existing phone?
Goals or objectives
The main objective that the company has to reach is to become one of the Hong Kong listed company in 5 years’ time. This is a real challenging goal as our company exists since only one year. Many factors have to be taken in consideration, and it’s probably judicious to fix more small goals and see all the aspects that have to be considerate.
First of all, one aim that the company has to achieve is to expand.
Actually the phone market is mainly share by important and older companies like Apple or Samsung. The objective could be to attain 1 or 2% of the share market in a 5 years’ plan. As the company is very new, this objective can be hard without a large production and big amount of sale. The product needs to be attractive to concurrence the actuals products on the market.
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As a financial objective, there are some requirements to achieve to be listed. The benefits have to be important enough, so the company has to increase them deeply. As the net income is now of $1 036 235,00 we will assume that we have to improve it from 100%. But it is a double-edge objective as it is also necessary to earn money.
Added to those countable objectives, and in order to acquire the customer loyalty, the product and the services provides by the company have to give him a great experience. To be aware of the actual needs, some market study has to be conducted to propose to the clients what he wants and make him change his favourite product to ours. The product offers and the service really need to be competitive to make the difference on the market and easily attract customers.
This difference can just be a small change in some actual existing product, like adding functionality or changing the aspect of a Smartphone. But it can also be a big change and make a revolution in the Smartphone world, and be known by making the buzz.
Financial Statement and Analysis
Below financial statements will be used to analysis the company’s competence:
- Balance sheet
- Income statements
- Cash flow statements
Financial statements
Balance sheet
- A year-end balance sheet shows the company’s financial position in a financial year.[pic 8]
| January 15, 2013 |
Assets |
|
Current assets: |
|
Cash and cash equivalents | 142,410,000 |
Short-term investments | 151,800,000 |
Accounts receivable, net | 124,230,000 |
Inventories | 13,770,000 |
Other | 66,510,000 |
Total current assets | 498,720,000 |
Property, plant, and equipment, net | 504,870,000 |
Investments | 50,730,000 |
Other noncurrent assets | 9,240,000 |
Total assets | 1,063,560,000 |
|
|
Liabilities |
|
Current liabilities: |
|
Accounts payable | 266,850,000 |
Accrued and other | 157,230,000 |
Total current liabilities | 424,080,000 |
Long-term debt | 15,150,000 |
Other noncurrent liabilities | 62,670,000 |
Total liabilities | 501,900,000 |
Owners' Equity: |
|
shares issued and outstand:none |
|
Retain earnings | 637,060,000 |
Other comprehensive loss | (50,180,000) |
Others | (25,220,000) |
Total owners' equity | 561,660,000 |
Total liabilities and equity | 1,063,560,000 |
Income statements
- The year-end income statements show us whether a company is profitable in a financial year.
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| January 15, 2013 |
Net revenue | 1,486,200,000 |
Cost of revenue | 1,205,700,000 |
Gross margin | 280,500,000 |
Operating expenses: |
|
Selling, general, and administrative | 128,940,000 |
Research, development, and engineering | 13,890,000 |
Total operating expenses | 142,830,000 |
Operating income | 124,020,000 |
Investment and other income, net | 5,730,000 |
Income before income taxes | 129,750,000 |
Income tax provision | 42,060,000 |
Net income | 87,690,000 |
Cash flow statements
- The year-end cash flow statements show us how a company use and generate cash in a financial year.
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| January 15, 2013 |
Cash flows from operating activities: |
|
Net income | 91,290,000 |
Adjustments to reconcile net income to net cash |
|
provided by operating activities: |
|
Depreciation and amortization | 10,020,000 |
Tax benefits of employee performance plans | 7,470,000 |
Effects of exchange rate changes on monetary |
|
assets and liabilities denominated in foreign |
|
currencies | (18,060,000) |
Other | 2,340,000 |
Changes in: |
|
Operating working capital | 52,650,000 |
Noncurrent assets and liabilities | 13,590,000 |
Net cash provided by operating activities | 159,300,000 |
Cash flows from investing activities: |
|
Investments: |
|
Purchases | (367,830,000) |
Maturities and sales | 314,070,000 |
Capital expenditures | (15,750,000) |
Net cash used in investing activities | (69,510,000) |
Effect of exchange rate changes on cash and cash |
|
equivalents | 16,950,000 |
Net increase in cash and cash equivalents | 12,900,000 |
Cash and cash equivalents at beginning of period | 129,510,000 |
Cash and cash equivalents at end of period | 142,410,000 |
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