Problems Faced by Akaroa Experience Partnership: A Business Function Report
Added on 2023-06-11
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Running head: BUSINESS FUNCTION
Name of the Student
Name of the University
Author note
Name of the Student
Name of the University
Author note
1BUSINESS FUNCTION
Executive Summary:
The following report deals with the problems faced by the Akaroa Experience
Partnership, which is a drama and Production Company, established by event mangers John
and Mary Wheeler. The company had received great amount of success in its initial years,
however, after the appointment of the new manager, the financial health of the company has
taken a severe hit. In this report, all the problems faced by the company and a set of
recommendations has been provided and explained. It is prepared with the intention of
providing an insight into some of the problems faced by the company and its necessary
solutions.
Executive Summary:
The following report deals with the problems faced by the Akaroa Experience
Partnership, which is a drama and Production Company, established by event mangers John
and Mary Wheeler. The company had received great amount of success in its initial years,
however, after the appointment of the new manager, the financial health of the company has
taken a severe hit. In this report, all the problems faced by the company and a set of
recommendations has been provided and explained. It is prepared with the intention of
providing an insight into some of the problems faced by the company and its necessary
solutions.
2BUSINESS FUNCTION
Introduction:
John and Mary Wheeler are event management experts who run the company ‘Akaroa
Experience Partnership’, which was a drama and musical production company, which was
inspired from the drama company which was based on the history of Waitangi. They were
concerned with creating drama and musical events for the cruise ship guests, who used to
visit Akaroa. Songs were written and play was scripted and was consequently performed by
the students of NASDA, who were hired during their summer holidays. Along with this, the
company was also involved in various kinds of ancillary business, apart from the drama and
singing business. They had entered into an arrangement with Iwi at Onuku Marae for
providing bus rides to the visiting guests, which was an additional business arrangement apart
from their main business.
The report has been requested by the owners of the company, namely John and Mary
Wheeler. This report has been written with the purpose of evaluating the functioning of the
company, with the aim of enquiring into its low profits and providing recommendations for
improvement purposes. It mainly covers four aspects which are the financial, operational,
sales and marketing along with the human resource. It has been prepared by the use of both
primary as well as secondary source of data.
Findings:
The drama business which was provided by John and Mary’s Akaroa Experience
Partnership. The business had grown steadily with the active participation of the students as
well as the owners. The collaborative arrangement with local Onku Marae, was also a
welcoming affair for the business. Every kind of arrangement was present for the students
from a good incentive system to the accommodation facilities at their holiday home.
However, after achieving substantial success, John and Mary had decided to re-open their old
Introduction:
John and Mary Wheeler are event management experts who run the company ‘Akaroa
Experience Partnership’, which was a drama and musical production company, which was
inspired from the drama company which was based on the history of Waitangi. They were
concerned with creating drama and musical events for the cruise ship guests, who used to
visit Akaroa. Songs were written and play was scripted and was consequently performed by
the students of NASDA, who were hired during their summer holidays. Along with this, the
company was also involved in various kinds of ancillary business, apart from the drama and
singing business. They had entered into an arrangement with Iwi at Onuku Marae for
providing bus rides to the visiting guests, which was an additional business arrangement apart
from their main business.
The report has been requested by the owners of the company, namely John and Mary
Wheeler. This report has been written with the purpose of evaluating the functioning of the
company, with the aim of enquiring into its low profits and providing recommendations for
improvement purposes. It mainly covers four aspects which are the financial, operational,
sales and marketing along with the human resource. It has been prepared by the use of both
primary as well as secondary source of data.
Findings:
The drama business which was provided by John and Mary’s Akaroa Experience
Partnership. The business had grown steadily with the active participation of the students as
well as the owners. The collaborative arrangement with local Onku Marae, was also a
welcoming affair for the business. Every kind of arrangement was present for the students
from a good incentive system to the accommodation facilities at their holiday home.
However, after achieving substantial success, John and Mary had decided to re-open their old
3BUSINESS FUNCTION
event management business form the accumulated profits achieved from the Akaroa business.
In the subsequent paragraphs all the different aspects of the business has been provided.
Financial aspect:
From the analysis of the income statement and the balance sheet of the company for
the years 2016-17 and for the year 2017-18, many important aspects of the performance of
the company has been observed. The four different efficiency ratios have been calculated for
better analysis of the financial performances of the drama company for the two year period.
The efficiency ratios and their analysis has been provided below:
Ratios: 2016-17 2017-18
Assets Turnover Ratio 1.278277 0.85877
Working Capital Ratio 1.53056 1.220414
Operating Expense Ratio 2.90877 1.887612
Accounts Receivable Turnover Ratio 5.358883 3.600195
Assets turnover ratio: The asset turnover ratio is an efficiency ratio which measures the
company's ability to produce sales from its assets by comparing net sales with average total
assets. This ratio shows how resourcefully a company uses its assets to generate sales
(Aasb.gov.au. 2018). In the case of Akaroa, it has improved in the year 2017-18, but it is not
reflected in the gross profit of the company, as it has decreased by $111,300 in 2017-18.
Working capital ratio: This ratio has been found out with the help of the primary sources of
Akaroa, financial statements. It is mainly prepared to illustrate the ability of a business to pay
for its current liabilities from its current assets. The working capital ratio of Akaroa has
decreased in the year 2017-18, indicating the fact that the company has not been able to
efficiently manage its current liabilities.
Operating expense ratio: It is used to measure the amount of costs which is incurred in
producing certain commodity or a piece of property, in comparison to the amount of income
that the property brings in. The operating ratio has decreased in 2017-8, showing signs of
event management business form the accumulated profits achieved from the Akaroa business.
In the subsequent paragraphs all the different aspects of the business has been provided.
Financial aspect:
From the analysis of the income statement and the balance sheet of the company for
the years 2016-17 and for the year 2017-18, many important aspects of the performance of
the company has been observed. The four different efficiency ratios have been calculated for
better analysis of the financial performances of the drama company for the two year period.
The efficiency ratios and their analysis has been provided below:
Ratios: 2016-17 2017-18
Assets Turnover Ratio 1.278277 0.85877
Working Capital Ratio 1.53056 1.220414
Operating Expense Ratio 2.90877 1.887612
Accounts Receivable Turnover Ratio 5.358883 3.600195
Assets turnover ratio: The asset turnover ratio is an efficiency ratio which measures the
company's ability to produce sales from its assets by comparing net sales with average total
assets. This ratio shows how resourcefully a company uses its assets to generate sales
(Aasb.gov.au. 2018). In the case of Akaroa, it has improved in the year 2017-18, but it is not
reflected in the gross profit of the company, as it has decreased by $111,300 in 2017-18.
Working capital ratio: This ratio has been found out with the help of the primary sources of
Akaroa, financial statements. It is mainly prepared to illustrate the ability of a business to pay
for its current liabilities from its current assets. The working capital ratio of Akaroa has
decreased in the year 2017-18, indicating the fact that the company has not been able to
efficiently manage its current liabilities.
Operating expense ratio: It is used to measure the amount of costs which is incurred in
producing certain commodity or a piece of property, in comparison to the amount of income
that the property brings in. The operating ratio has decreased in 2017-8, showing signs of
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