Order from us for quality, customized work in due time of your choice.
The financial strategies of different organizations across different business sectors
The different financial strategies used by organizations from different business sectors.
Oil & Gas Industry
The financial strategies employed by organizations in the oil and gas industry are a result of thorough decision-making processes amidst constant price fluctuations. Their overall financial strategies, nonetheless, include restructuring their asset bases as well as downsizing to reduce fixed costs (O.Fasanya, 2021). Subsequently, there are low debt ratios and high rates of returns.
Electronics
The electronics industry is defined by stiff competition and cutting-edge innovations. Therefore, for an organization in this industry to stay on top of the competition, it needs a solid financial strategy. At Apple Inc., for instance, the financial strategy is based on the margin maximization concept. Most electronic products have some distinct features that cannot be bought elsewhere other than the parent company (Borgert et al., 2020). Hence, the financial strategy of most electronic companies is founded on their product features, which are unique to the brand.
Real Estate
The financial strategy mostly employed in real estate is real estate planning through control cost. Assets created in the form of lands pass out as a long-term financial planning type. Indeed, investments in real estate can easily give the investor solid retirement planning (Bücker & Horst, 2017). Control costs help organizations in this industry reduce their spending and maximize their revenues.
Other financial strategies include managing liquidity, managing taxes, managing risks, creating a safety net, and targeting low-cost marketing options. Organizations often employ different approaches to maintain liquidity. One such approach is to maintain a money buffer as a way of maintaining a cash flow. Meanwhile, organizations manage their taxes by employing the services of a tax specialist as well as purchasing relevant professional software (Graham, 2020). The use of asset diversification is one of the most effective ways of creating a fail-proof and solid safety net.
The financial strategies of organizations in at least two different business sectors
The financial strategies of governmental, charitable, and private sector organizations
Private
Segment operating income is the metric used by Cammy Plc to assess the overall performance of its operating businesses. Revenues, profit from operations, and equity shares are a companys operating segments. The firm marks a general profit growth from the year 2020 to 2021, which is a good indication that the firm is striving towards expanding its profit margin; from 6,000 in 2020 to 6,250 in 2021 (Maulidia et al., 2019). This means that it did not work at its full capacity, or rather, it did not put in enough effort. The reason could have been a change in economic conditions making the business have a hard time making the desired profits, or maybe it could be a result of a wrong reputation portrayed by the business. We can see that the current assets have increased in 2021 from 31,500 to 49,025. This is not a bad indicator as it shows that there is more money in circulation. The firm will be more liquid in 2021.
Due to an increase in other total revenue and interest received from 43,125 EUROS in 2020 to 60,750 in 2021, the operating profit margin rose from 9,000 to 9,900. Administration costs rose by 33%, and net interest rose by 207% in 2021, causing a considerable drop in profit for the year from 6,250 EUROS to 6000 EUROS. Another intriguing fact is that between 2020 and 2021, although the ROCE ratio decreased marginally from 11,67% to 11,43%, the gross profit grew from 7,13% to 8,89%, 12,250 to 22,900. Similarly, the cost of sales in 2020 increased by 9.89%, amounting to 37,850 in 2021.
Between 2020 and 2021, inventory turnover times increased, despite a favorable trend from 2020 to 2021. This is because the cost of sales increased during this time period, which adversely impacted inventory turnover periods, but the cost of sales increased, which increased stock expenses. It is possible to analyze payees turnover time in two distinct methods. First and foremost, the companys reputation will be enhanced if payments to suppliers are made promptly. On the other hand, if a firm is able to postpone or defer its payments, it will not have to worry about cash flow issues.
Government
When we look at the assets for the years 2020 and 2021, we can also see that they have declined. When we look more closely, we can observe that the great majority of the fall in current assets was caused by a considerable decrease in cash and bank accounts, as previously stated. The inventory turnover times increase handed out in 2020 were much larger than in 2021, which resulted in a reduction. In 2021, the value of other receivables grew (Kumar, 2018). This might very well be a non-issue, given that the rise in receivables coincides with the growth in sales quantities as the company expands its operations. However, the corporation should continue to watch it over the following few years since any significant growth would reflect adversely on the companys collection techniques, which will, in turn, result in poor cash flow for the organization. Overall, although there is nothing to be concerned about, the existing asset status is one area that the firm may give greater attention to as it continues to expand its operations both internationally and locally.
Following that, well take a look at the companys non-current assets. These portray a fairly positive image of the firm, with the absolute number of employees increasing nearly in tandem with the companys growth. These figures demonstrate a rise in the firms property, industrial facilities, and equipment, which indicates that the company has had substantial development and expansion throughout the course of the year 2021, which is encouraging for the company (Kumar, 2018). Over the period, both gross profit margins profit declined, indicating that the firms production and trade activities were not managed as efficiently as they might be. Gross profit margins profit both grew during the fiscal period, indicating that the firms production and trade activities are being managed more efficiently than before. The firms liquidity ratio has not improved in the last year, indicating a worse liquidity situation. It demonstrates that the company lacked adequate liquid assets. A significant portion of the companys inventory declined over the period. In addition, there has been a rise in the mobility of inventories, albeit this has been marginally reduced in the recent year. This might be a warning indicator for the organization.
Charitable
The corporation grew at a rapid pace throughout the year 2020, as seen by the fact that its assets increased year after year. Second, the company demonstrated a strong ability to rearrange its assets in order to create more development space; we can see that it possessed strong liquidity and was able to pay its debts. In addition, since the corporation saw rapid growth during this era, its current assets increased by a factor of two more over the years 2020 to 2021 (Cavalcante et al., 2021). Finally, industrial development is very vital to the company, as shown by the fact that its net income has been expanding in recent years as a result of the increase in new sales.
The non-current assets have also shown the same thing. This generally means that there have been more and greater investments in 2021 than in 2020. However, we can observe that the liabilities have increased. This, therefore, means that the firm is asking for more help in 2021 than in 2020 (Cavalcante et al., 2021). This isnt a bad signal, either. The problem here is that (and this is what analyses the performance of the firm) the business has grown, but it is not making the required amount of profit that it desires. They should therefore embark on marketing skills to make the business more relevant to its customers.
Bibliography
Borgert, T., J. D. Donovan, C Topple, and E. K. Masli. 2020. Impact analysis in the assessment of corporate sustainability by foreign multinationals operating in emerging markets. Evidence from manufacturing in Indonesia, Journal of Cleaner Product 260.
Cavalcante, W.Q.D.F., Coelho, A. and Bairrada, C.M., 2021. Sustainability and tourism marketing: A bibliometric analysis of publications between 1997 and 2020 using vosviewer software. Sustainability, 13(9), p.4987.
Graham, John. 2020. Introduction to Corporate Finance. South-Western College.
Kumar, C., 2018. Engaging Private Sector Partners (PSPs) for Radiology Services in Patna District, Bihar: An Unsustainable Model of Health Services Delivery. Indian Journal of Sustainable Development, 4(1), p.15.
Maulidia, M., Dargusch, P., Ashworth, P. and Ardiansyah, F., 2019. Rethinking renewable energy targets and electricity sector reform in Indonesia: A private sector perspective. Renewable and Sustainable Energy Reviews, 101, pp.231-247.
O.Fasanya, Ismail. 2021. On the connection between oil and global foreign exchange markets: The role of economic policy uncertainty.
S.Krause, Marlen. 2019. The intention of companies to invest in biodiversity and ecosystem services credits through an online-marketplace.
Order from us for quality, customized work in due time of your choice.