Financial Analysis of Real Estate Investar Group Limited
Added on 2019-10-30
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Running head: INTRODUCTION TO ACCOUNTING AND FINANCE 1Introduction to Accounting and Finance NameInstitutional Affiliation
INTRODUCTION TO ACCOUNTING AND FINANCE 2Real Estate Investar Group Limited Rev Software and ServicesIntroductionReal Estate Investar Group Limited is an Australian company based in Ashmore, Australia and was founded in 2006. The company provides services and direct investment property opportunities to property investors in New Zealand and Australia. The company is also a leading provider of integrated services to property investors so as to assist in the analysis, identification, acquisition, accounting and tracking of investment property (Acharya, Gottschalg, Hahn, & Kehoe, 2014). Clint Greaves is the company CEO and managing director since his appointment in 2015. With over 300,000 investors accessing free online member services and about 3000 paying subscribers utilizing its platform to manage and build their respective portfolios. Real Estate Investar Group Limited assist investors to generate wealth through investment in properties and real estates. The company is considered to operate through transaction services, property and subscriptions segments that offer tools, news services, and resources to property investors to help in the analysis, identification, acquisitions, accounting and tracking of investment property. According to the company, the transactions service segment offers casual non-subscription services to its members through paid marketing referral model with accredited partners that includes real estate transaction services, insurance brokerage and estate and financial planning (Hofmann, & Lampe, 2013). The property segment basically facilitates thesale of newly created and off the plan properties from project makers or developers to diverseinvestors. Real Estate Investar Group Limited home office is considered to be situated in Ashmore, Australia in order to oversee its overall business operations. The home office is basically situated in a strategic position so as to enhance its operations by having an easy location by both new and existing clients. The company ending date of the latest fiscal year is
INTRODUCTION TO ACCOUNTING AND FINANCE 3that the company basically reports its financial statements as at 31st December 2016 (Real Estate Investar Group Limited annual report, 2014, 2015 and 2016). The main geographical areas include Australia and New Zealand that the company is considered to be a leader in the data driven matching property investor with the right investment grade property. BDO Audit Pty Ltd is the company’s independent auditors who have the mandate to ensure that the company financial statements present true and fair view. As a lead auditor for the review of the Real Estate Investar Group Limited for the year ended 31st June 2016, they declared to the best of their knowledge and belief that no contraventions of the auditors independence requirements of the Company Act 2001 in relation to the company review (Real Estate Investar Group Limited annual report, 2014, 2015 and 2016). The auditors also said that the company financial statements basically present a true picture of its financial position because there was no contravention of any applicable code of professional conduct in relation to the review. Real Estate Investar Group Limited was incorporated in 2009, and the most recent price of the company’s stock is AU$0.044 as at 14thSeptember 2017. Real Estate Investar Group Limited share price has been increasing for the last ten days. Over the last financial year 2016, the company did not declare any dividends forits investors because most of its profits were deemed for expansion purposes. Industry situation and company plansWith more than 200,000 members utilizing the service, the Real Estate Investar Group Limited has firmly established itself as essential resources for both the serious and the first time property investors. Real Estate Investar Group Limited basically generates its revenues through three districted main sources;Sale of premium subscriptions to members so as to provide enhanced tools for better decisions in property investment.
INTRODUCTION TO ACCOUNTING AND FINANCE 4Commissions that are generated from the sale of diverse properties to diverse investorsThe sale of auxiliary services that are associated with the process of investing properties (Real Estate Investar Group Limited annual report, 2014, 2015 and 2016). Real Estate Investar Group Limited business operations will continue to focus on increasing the membership base, enhancing the knowledge and skills of its members, developing data driven tools so as to accurately match investment grade properties with a range of free and paid services to enhance the process of property investment (Collier, 2015). As at 2016, the company gained a 48% increase in membership to about 202,423 members during the financial years. During the same year, the company gained a marginal increase in paying subscribers from 2,773 in 2015 to 2818 in FY2016 thus attaining the revenue forecast for FY2016 as outlined in the prospectus for 2015. Real Estate Investar Group Limited future plans basically anticipate increasing its number of members to a significant number so as to ensure that it controls the investment market. The company also anticipated increasing its sales value because the core aim of this particular institution is to make sufficient profits for its shareholders and also increase its share price in the market (Healy, & Palepu, 2012). The company also plans to grow direct property sales through targeted campaigns to members and also generate new revenues streams through complimentary, property investing related services that include finance. Real Estate Investar Group Limited also seek to explore new offshore market opportunities for its products and services. Financial Statement AnalysisGross profit is considered to be the profit that the company makes after deducting the total costs that is associated with selling and making its products or the costs linked with offering diverse services.
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