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Competitive Advantageand Other ThingsFinancial Analysis 2The big question… “Why do some organizations succeedand others fail?” In strategic words… “How does an organization gain and maintain competitive advantage?” style.visibilitystyle.visibility 3Competitive AdvantageAnd should I care?What is competitive advantage?How do you get it?Here today for one day only!style.visibilityppt_wppt_hstyle.visibilityppt_wppt_hppt_xppt_ystyle.visibilitystyle.visibilityppt_wppt_h Edge over rivals in… Securing customers Ex: gain market share, customer loyalty Defending against industry forcesEx: strong suppliers, new technologies 4Competitive Advantageandppt_xppt_y Demonstrated by:Rents above market equilibrium (economic) Profit ratios above industry average (financial)5Competitive AdvantageAre we having fun yet?style.visibilitystyle.visibilitystyle.visibilitystyle.visibilityppt_wppt_h Above market rentsCA: firm has rents higher than market equilibrium6CA: Above Normal Rents (Economic)DSPriceQuantityProfitBreak evenEntrepreneurialrentsM.E. = average rate of return (ARR) of firms in a particular market / industry ARR = break even + profit = Entrepreneurial rent Profit is the “rent” on invested capital…the return for risk M.E. maintains capital investment (keeps assets working) style.visibilitystyle.visibilitystyle.visibilitystyle.visibilitystyle.visibilitystyle.visibilitystyle.visibilitystyle.visibilitystyle.visibility CA: measured by higher than industry Profitability Ratios -Gross profit margin, net profit margin, ROA, ROEStock market measures-EPS, stock price, P/E ratio, -Other shareholder return ratios Liquidity ratiosActivity ratiosLeverage ratios7CA: Above Industry ratios(Finance)style.visibilitystyle.visibilitystyle.visibilitystyle.visibilitystyle.visibilitystyle.visibilitystyle.visibilitystyle.visibility Profit measures show:-How productively firm is using current resources (fit)-How well TMT invested in firm (strategic intent) Market measures:-What outsiders think of the company-How the company takes care of investors 8What the measures showOver time (trend analysis)style.visibilityppt_xppt_y Liquidity ratios show:-Ability of firm to pay debtsLeverage ratios show-Financial leverage of the firm-Whether it can manage business w/out excessive debt Asset ratios show-Inventory turnover-Efficient use of assets9What the measures showOver time (trend analysis)style.visibilityppt_xppt_y How much time?Generally trend four Years – 16 quarters.16 quarters of decline is the official definition of a depression.You are an “over and above” employee.When your boss askes you for a financial analysis, YOU trend five years. For assignments for this class, trend three years. I want to you learn the tool. It is not necessary to make you crunch endless numbers. If you trend for three years, you will understand this tool. 10**Which is why the US had a Great Recession in 2008-2012. In one quarterthe GDP was slightly up. The trend has been up and down since. style.visibilitystyle.visibilitystyle.visibilitystyle.visibilitystyle.visibility To Repeat:For the final paper in this class trend three (3) years.For your boss? Five years.11style.visibility Indicators: 1. Profit ratios 2. Stock price/ratios 3. Other ratios 4. Market share12Financial Analysis 1. Chart financial indicators for five (5) years (Trend Analysis)Compare to industry average indicators3. Explain significance of findings What management decisions led to these results? A strategic analysis focuses on the WHY. Why are the firm ratios as they are? What management decisions led tothese results? That will be the largest part of the grade. style.visibilitystyle.visibilitystyle.visibilitystyle.visibilitystyle.visibilitystyle.visibility 13Example:Current ratio= current assets current liabilities*Liquidity ratio*Cash for short term obligations*1 is minimumCurrent Ratio 2016 1.8% 2015 1.4% 2014 .9% Industry three year average 2.4%not so goodCheck activity ratios Why?Good?style.visibilitystyle.visibilitystyle.visibilitystyle.visibilitystyle.visibilitystyle.visibility 14 1. Chart financial indicators for 3 years (Trend Analysis)Compare to industry average indicators3. Explain significance of findings What management decisions led to these results? XYZ Sales 2016 2,546,253 2015 1,200,536 2014 870,592Good?What about costs?XYZ GPM 2016 30% 2015 32%2014 36%GPM= (Sales-Costs)/SalesFinancial AnalysisIndustry GPM 2016 36% 2015 35%2014 36%style.visibilitystyle.visibilitystyle.visibilitystyle.visibility 15-Don’t know customer?-Price too high?-Can’t manufacture enough? 1. Chart financial indicators for 3 years (Trend Analysis)Compare to industry average indicators3. Explain significance of findings What management decisions led to these results? Financial AnalysisCosts too high?Sales too low?-High exec. perks?-Expensive materials?-Price too low?-Marketing costs up?Why?XYZ: GPM 2016 30% 2015 32%2014 36%GPM= (Sales-Costs)/Salesstyle.visibilitystyle.visibilitystyle.visibilitystyle.visibilitystyle.visibility 16Financial Analysis 1. Chart financial indicators for 3 years (Trend Analysis)Compare to industry average indicators3. Explain significance of findings What management decisions led to these results? Indicators: 1. Profit ratios 2. Liquidity Ratios 3. Leverage Ratios 4. Activity Ratios 5. Stockholder Ratios 17The End
Financial Internal Analysis - BJ's Restaurant, Inc.

Financial Internal Analysis - BJ's Restaurant, Inc.

Question # 00606621 Posted By: burgerrubio Updated on: 10/23/2017 05:06 PM Due on: 10/27/2017
Subject Marketing Topic Marketing Tutorials:
Question
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Instructions:

Financial analysis of BJ’s Restaurant, Inc.

Must show 3 years of financial data for trend analysis as there are industry averages for the financial ratios, and that there is a good explanation of the management decisions that led to the ratios.

Must include the following format:

Internal Analysis

· Value chain analysis or functional analysis

· Financial analysis

· Core capabilities, distinctive competencies, VRIO analysis

· Organizational structure and culture analysis

· Intellectual Assets analysis

Summary: SWOT (listing and explanation) and TOWS

5 Attachments include:

· Draft financial analysis (checklist)

· 3.3 Financial Analysis PPT (Fincial examples)

· Non-Profit ratios (Examples if needed)

· Best Buy sample paper, pps. 40-83 covers Internal Analysis section (i.e. Value chain, Financial analysis, Core Capabilities and VRIO Analysis)

· BJ’s Industry and External Environment Analysis Draft (add Financial analysis at the end after Industry Life Cycle)

Need by Friday evening.

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Attachments
Best_Buy,_2015.docx (1370.17 KB)
3.3_Financial_Analysis_.pptx (192.97 KB)
Non-profit_ratios.doc (26.5 KB)
x-Rubric_Draft_Financial_Analysis(1)(1)(2).docx (13.97 KB)
BJs_Restaurants_-_Industry_Analysis_DRAFT.docx (241.45 KB)
Tutorials for this Question
  1. neil2103
    Tutorial # 00605122 Posted By: neil2103 Posted on: 10/23/2017 05:07 PM
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