Financial Performance Case Study

Financial Performance

A financial plan should be made to evaluate a company’s financial performance. Financial planning per businesdictionary.com states “Long-term profit planning aimed at generating greater return on assets, growth in market share, and at solving foreseeable problems.” It depends if the company is a monopolistic then quantity to be supplied depends on profit maximization. Meaning that the company will make the product to maximize the company’s profit. A company under monopolistic has some control over the cost of the products. Generally, in this situation, there is competition between companies which allows companies to reduce the cost of the product to attract new customers from the competition. A company’s cash in the

By controlling expenses will allow your company to compete in the short and long run. Ways of cutting expenses can be cost of buildings, transportation, raw material, labor and etc. For an example, instead of renting a building try to own the building. Transportation expenses could be cheaper by using your own fleet or pay another cost effective provider. Raw materials go back to the drawing board. Some companies in the dairy industry understand the best way to cut cost is to own the entire process from the farm to the cow, to the dairy processor, to the food processor then to the customer. By doing this type of process will allow you to monitor all cost and cut out any middle man. Another perk by doing this process will allow you to control the quality of your products more effective since you know from the start to the finished product. Labor management can be handled many ways. Some companies will use lower costs labor to do the work. Other companies will try to give the laborer better pay but expect more production out of them.

Increase margins is a good method when you have a great product and also able to compete against your competition. This strategy can be good when used correctly. But on the other hand can be bad when you become the costliest provider in the industry. Then you will lose your customers and any chances for future customers. This strategy is a trial and error but is also good to use when there are not many competitors in the market that have the same products. But in this case, everyone is a little same so you would have to create new products lines that no one