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Financial Risks and Contingency Planning for Fleetwood Corporation

   

Added on  2019-09-23

14 Pages2795 Words174 ViewsType: 174
Finance
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Running Head: Financial AnalysisFINANCIAL ANALYSIS
Financial Risks and Contingency Planning for Fleetwood Corporation_1

Financial Analysis2Table of ContentsIntroduction......................................................................................................................................3Discussion........................................................................................................................................3Section 1 – Assessment of client needs.......................................................................................3Section 2 – Analysis of data.........................................................................................................7Section 3 – Formulation of financial and performance advice....................................................9Conclusion.....................................................................................................................................11Reference List................................................................................................................................12Appendices....................................................................................................................................14
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Financial Analysis3IntroductionThe current report is drafted with the aim of providing financial recommendations to Fleetwood Corporation Limited of Australia by considering its current business status. Fleetwood Corporation delivers accommodation solutions, accessories, and parts. The different segments of the company include Modular Accommodation, Parts and Accessories, Village Operations and Unallocated. The segment titled Parts and Accessories uses to manufacture and distribute accessories and parts for commercial and recreational vehicle (RV). Modular Accommodation business segment of Fleetwood is involved in designing, manufacturing, and selling of accommodation for education, housing, mining industries, and corrections. The third business segment i.e. Village Operations includes village accommodation operations in Searippleof Karratha, and Osprey of South Hedland. The subsidiaries it current having are Camec Pty Ltd,Camec (NZ) Limited, and Fleetwood Pty Ltd. It was established in the year 1964 and became listed on ASX (Australian Securities Exchange) in 1987. Over the years, Fleetwood becomes a leader of the industry and in markets such as Modular Accommodation, Parts and Services, and Village Operations in Australia as well as in New Zealand (reuters.com, 2019).DiscussionSection 1 – Assessment of client needsPESTL Analysis of Fleetwood CorporationPolitical:Australia’s political factors impact Fleetwood Corporation profitability and financial performance. Political factors that positively influence business operations of Fleetwood are the degree of Australia's political stability, the integrity of Australia's politicians. Moreover, the business related laws that Australia enforces like contract law provides direction to Fleetwood Corporation regarding what it is allowed to do and what not. Low minimum wages policy of the country assists the company to increase its profit which ultimately helps it to ensurelong-term survival. On the other hand, trade barriers, and high tax rate are the two major factors that create a negative impact on Fleetwood's business and financial performance.
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Financial Analysis4Economic:Economic factors make Fleetwood Corporation act sensitively before investing and making financial decisions. Australia’s GDP growth rate affects how fast the company is expected to improve its financial performance in the coming future. If GDP declines then the financial performance of Fleetwood also falls and vice versa. Currently, Australia's GDPgrowth slightly reduces which influences Fleetwood's financial performance in a negative manner. The country's interest rate influences its borrowing and lending decisions, exchange rateimpacts its profitability. A high rate of unemployment ensures greater supply labour at a lower wage which lower Fleetwood Corporation's cost in relation to labour and increases profitability.Figure 1: GDP Growth of Australia(Source: tradingeconomics.com, 2019)Social: The multiculturalism social structure and multiracial practices of Australia supports Fleetwood to expand its business by meeting demand of different customer segments. Distribution of social class assist Fleetwood in target marketing and promoting its premium products after setting a most suitable customer segment to who could become the actual customers of the company. The moderate income level, career attitudes, positive and increasing buying behaviour, hardworking nature, forward-looking and positive mind of Australians createsa positive business environment for Fleetwood (Gupta, 2013).
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