Please ignore Part 1 in the Big Data Report file as it was done incorrectly and refer to this instead please. Part 2 in the Big Data Report is the actual report.
This report will evaluate revenue over the last 10 years and detail how each region has contributed to overall sales.
This table shows the units sold from the highest amount to the lowest at the bottom. The donut chart on page 4 of the Power BI file also shows how much each region has contributed to the number of units sold. The region ‘So California’ has contributed the most by taking up 21.18% of all units sold; whereas, ‘Greater NYC’ contributed the least as it took up only 0.99% of all units sold.
The data shown below, indicates that a total revenue of £637710245 is not allocated to any year and that a total of £412786133 was made between 2000 and 2009. The year 2000 took only 1.27% of the total revenue whereas, the year 2009 took 20.28% of the revenue.
This chart also shows how each region has contributed to units sold:
The pie chart shows how So California takes up nearly a quarter of all units sold which is significantly higher than many other regions. Florida also takes a large proportion of units as well whereas states such as Virginia and Colorado take up very few.
This report will summarise the companies performance over the 2 years and will highlight any cause for concern.
One ratio we can look at is the return on equity, which tells us how good a company can use its investments to cause earnings to grow. ROE has increased by 24.7% from 42% to 66.7% which is a positive as it shows an increase of profitability of the business in relation to its book value. The ratio can be seen on the excel file, to work out this ratio you divide the profit after tax by total equity. This graph shows the difference between 2015 and 2016.
Another ratio we can look at is the return on capital employed, which is worked out by getting the profit before interest and tax and dividing that by total equity plus debentures. It measures the company’s efficiency and its profitability. This has increased slightly from 41% to 44.2% which is good for the business as it shows increased performance. This graph shows the slight increase in performance.
In addition to this, company performance can be studied by analysing the gross profit margin ratio. This ratio is worked out by dividing the gross profit by revenues and it indicates money left over after taking away the cost of goods sold. This ratio has increased slightly from 2015 to 2016 which shows improved financial health. The graph below will show the increase from 48% to 50.5%.
Moreover, the net profit margin can also help us evaluate company performance. This is worked out by dividing profit before interest and tax by sales revenue. From 2015 to 2016 it has increased by 3.1% as shown in the excel file, from 26.2% to 29.3%. This shows that the company is improving its how it prices its products and that they are exercising better cost control overall. It shows the revenue after all costs and expenses have been deducted. This graph shows the slight but positive increase.
In addition to this, we can also look at the debt to equity ratio. This is worked out by dividing debentures by total equity. From 2015 to 2016 the percentage has increased which shows higher debentures in comparison to equity. It has gone from 67.6% to 146.6% which is a large increase.
In terms of liabilities, there has been a large increase of 24.7% on the balance sheet, which has mainly been due to debentures and a decrease in retained earnings. This may need to be investigated to ensure that debentures do not increase at this rate year by year and retained earnings don’t decrease like this year by year, as this could significantly increase total equity and liabilities. An investigation into what this long-term security is and what exactly is causing the reduction to retained earnings should be considered.
This graph shows the increase in the debt to equity ratio.
Lastly, we can also look at the payables days from the ratio table in the excel file. From 2015 to 2016 there has been a slight increase which means it is taking the business slightly longer to pay off other companies. It has gone up from 27 days to 31.3 days. This can be calculated by dividing trade payables by sales revenue times 365. This is not a major concern but the business could try investigating if there is a main reason to why there has been an increase and to ensure that it doesn’t go higher for 2017. This graph shows the slight increase.
In conclusion, the company’s performance between both years seems very similar but investigations into debentures and retained earnings may be required to ensure that there is enough money to continue business in the future without obtaining large, unsustainable amounts of debt.