Financial Analysis and Statement Preparation

Financial Analysis and Statement Preparation
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Contents
Brief description of a business model and pricing strategy.......................................................3
Business model.......................................................................................................................3
Pricing strategy.......................................................................................................................4
The current and projected cost...................................................................................................6
Break-even analysis...................................................................................................................9
Pro-forma financial statements................................................................................................11
Sales forecast for the medium term..........................................................................................13
Potential challenges that company might face.........................................................................14
References................................................................................................................................16
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Brief description of a business model and pricing strategy
Business model
Preparing a business model for a business organization to be established in the market is very
essential as it helps in identifying different factors that can affect profitability and
productivity. Business organization under consideration in this report is Queensland IT
Limited. The proposed business of this organization is the production of internal hard drives
for laptops and desktop computers. The main focus of this organization would be to
manufacture internal hard drives of 2 terabytes initial year of operations and then move to
other hardware accessories for computers and laptops. Business model canvas for this
organization would be as follows-
Partners- Partners can be defined as the stakeholder in the organization without which
business operation could not be completed. In simple word, it can be said that partners are the
stakeholders from which key resources of the organization would be received. Given the
scenario, the main focus of the organization should be on the acquisition of financial support
for starting a business organization (Lueg, Malinauskaite and Marinova, 2014). Therefore in
this scenario key partner of the organization would be a financial institution from which
business organization is taking a loan for starting the business.
Key activities- Key activities of Queensland IT Limited would be as follows-
Manufacturing- Primary business activity of this organization would be manufacturing as this
is a manufacturing organization that does not provide product and services directly to
customers.
Advertisement and marketing- One of the most important supporting activity of this
organization would be marketing as marketing will help in the identification of corporate
customers that are producing laptops and desktop computers.
Other supporting activities- other supporting business activities will include accounting,
human resource management, quality assurance, Internal auditing, etc. (Joyce and Paquin,
2016).
Key resources- Key resources required in this organization would be technological resources
and human resources. Technological resources will be required for the production of IT
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Solutions with the latest technology. IT industry is very competitive and customers prefer
business organizations that are providing hardware and software with the latest technology
(Dudin et.al, 2015). In addition to the skilled and experienced, human resources will be
required for the implementation of technological resources. Without effective and efficient
human resources, efficient use of technological resources cannot be achieved.
Cost structure- cost structure of this organization will include variable and fixed cost and
details with relation to each element of cost is discussed in the later part of the report.
Revenue stream- Entire revenue of this organization will be from production and spelling of
internal storage devices for computer and laptop. There is a probability that certain amount of
revenue can be generated from other incomes such as repair and maintenance income and
interest income but these revenues are not considered in the business model as there is no
surety for such income.
Value proposition- Value proposition can be defined as a specific quality of a particular
business organization that makes them different from other business organizations in the
market. Queensland it limited will be providing quality internal storage devices at lower
prices as compared to other competitors in the market (Ovans, 2015). The balance between
quality and price will be the value proposition of this organization. Pricing strategies of the
company will be decided in accordance with this value proposition.
Customer relationship- This organization would not be dealing with the final customer as it is
very real call a computer user to purchase internal hard drive as it is already installed in the
laptop or desktop system. Marketing and advertising strategies of the company will be
prepared considering the characteristics of the corporate customer (Coes, 2014). A marketing
strategy that will be used in maintaining customer relationship would be personal selling.
Customer segments- This organization would have only one customer segment i.e.
manufacturing organizations that are involved in production and selling of computer and
desktop systems (Euchner and Ganguly, 2014). Personal selling will be used for maintaining
a relationship with such manufacturers. In addition to that regular rebates and discounts will
be provided on bulk orders.
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