Pocktech Company Case Study
Essay Preview: Pocktech Company Case Study
Report this essay
[pic 1][pic 2][pic 3][pic 4][pic 5]Table of ContentsIntroduction P.3Problem Definition P.4Goals or objectives P.4Financial Statement and Analysis P.65. Alternative Identification P.146. Risk Management P.287. Indivual Conclusions p.34 IntroductionPockTech 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 technologiesWe 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 DefinitionWe 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 objectivesThe 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. [pic 6][pic 7]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 AnalysisBelow financial statements will be used to analysis the company’s competence:Balance sheetIncome statementsCash flow statementsFinancial statementsBalance sheetA year-end balance sheet shows the company’s financial position in a financial year.[pic 8] January 15, 2013Assets Current assets: Cash and cash equivalents142,410,000 Short-term investments151,800,000 Accounts receivable, net124,230,000 Inventories13,770,000 Other66,510,000 Total current assets498,720,000 Property, plant, and equipment, net504,870,000 Investments50,730,000 Other noncurrent assets9,240,000 Total assets1,063,560,000 Liabilities Current liabilities: Accounts payable266,850,000 Accrued and other157,230,000 Total current liabilities424,080,000 Long-term debt15,150,000 Other noncurrent liabilities62,670,000 Total liabilities501,900,000 Owners Equity: shares issued and outstand:none Retain earnings637,060,000 Other comprehensive loss(50,180,000)Others(25,220,000)Total owners equity561,660,000 Total liabilities and equity1,063,560,000 Income statementsThe year-end income statements show us whether a company is profitable in a financial year.[pic 9] January 15, 2013Net revenue1,486,200,000 Cost of revenue1,205,700,000 Gross margin280,500,000 Operating expenses: Selling, general, and administrative128,940,000 Research, development, and engineering13,890,000 Total operating expenses142,830,000 Operating income124,020,000 Investment and other income, net5,730,000 Income before income taxes129,750,000 Income tax provision42,060,000 Net income87,690,000 Cash flow statementsThe year-end cash flow statements show us how a company use and generate cash in a financial year.[pic 10] January 15, 2013Cash flows from operating activities: Net income91,290,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization10,020,000 Tax benefits of employee performance plans7,470,000 Effects of exchange rate changes on monetary assets and liabilities denominated in foreign currencies(18,060,000)Other2,340,000 Changes in: Operating working capital52,650,000 Noncurrent assets and liabilities13,590,000 Net cash provided by operating activities159,300,000 Cash flows from investing activities: Investments: Purchases(367,830,000)Maturities and sales314,070,000 Capital expenditures(15,750,000)Net cash used in investing activities(69,510,000)Effect of exchange rate changes on cash and cash equivalents16,950,000 Net increase in cash and cash equivalents12,900,000 Cash and cash equivalents at beginning of period129,510,000 Cash and cash equivalents at end of period142,410,000