Principle of Financial Management: Industry Analysis, Company Description, Financial Instrument Analysis, and Competitor Analysis

Principle of Financial Management 1
PRINCIPLE OF FINANCIAL MANAGEMENT
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Principle of Financial Management 2
Principle of Financial Management
1 Industry Description
Retailing industry is one of the largest industries in Australia. The industry faces stiff
competitions from new firms. The industry is dominated by key players in terms of total
revenue or revenue share such as the Metcash, Big W, Kogan.com, Wesfarmers, Woolworths
Group, ALDI Group and JP Hi-Fi among others. Despite the stiff competition, the industry
has experience 3.7% increase in the year ended 2018 as compared to 3.7% reported in the
second quarter in the same year (Mordor Intelligence 2019). This industry is mostly
segmented based on distribution channels, product categories as well as market dynamics.
The industry has witnessed significant positive increment in spite of the rising household
debts as well as low increase in the wages.
Australian retail industry relies on the unruly powers like altering consumer consumption
arrays as well as influx of the foreign firms which focus on creating fresh techniques in
retailing. Moreover, the industry has been experiencing disruption. In specific, the increasing
invasion of the foreign firms has not just altered retailing scenery but has also changed
customer preferences. There has been noteworthy change in the customer likings mainly as a
result of technology advancements. The industry registered increment of around 2.6 per cent,
3 per cent as well as 5 per cent in the South Australia, in Victoria as well as in South Wales.
The competition in retail industry in Australia is regulated by ACCC (Australian Competition
and Consumer Commission. This commission promote health competition as well as fair
trading within the industry (Industry, 2011). The regulator ensures that each and every firm
operating in the retail industry adhere to the set rules and legislation to enhance fair

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competition. There is not industry group that assists in regulating competition in the retail
industry in addition to regulator.
2 Company Description
Kogan.com is considered as a domestically-owned public entity, deriving its revenues from
online sales of products and services. It operates within New Zealand and Australia with its
headquarter being in Melbourne. In other words, it is the online seller of the consumer goods
and electronics (Kogan.com 2019). Further, Kogan.com Limited is the collection of retail as
well as services trades. Its brand is well-known for the price control via digital competence.
The business is mainly engrossed in making the in-demand services and products more
accessible and affordable. Its products includes Video and TV, tablets and computers,
cameras, Appliances, audio, phones and office suppliers, health and beauty, gadgets, shoes
and fashion, home and garden, pantry and sports. The company operates under the following
chief segments; that is, Kogan Marketplace, Kogan Broadband, Kogan Travel, the Kogan
Retail, the Kogan Insurance as well as Kogan Mobile (Kogan.com 2019). The firm is
basically engrossed on making the in-demand goods as well as services more reachable and
within your means. Its Kogan Marketplace and Kogan Retail segments provide more than
fifty thousand products from more than fifty brands. Its Kogan Travel segment provides
travel bookings and holiday packages, as well the hotel bookings via the hotels.kogan.com as
well as cruises vial cruises.kogan.com. Its Kogan Internet and Kogan Mobile segments offers
customer acquisition, marketing as well as branding while the Kogan Insurance segment
offers landlord, travel, contents, car and home insurance services. Kogan.com Limited
provides various products under numerous classes that include tablets and computers,
cameras, home and garden, phones, baby, family and kids, audio, office supplies, video

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games, beauty and health, luggage and outdoors, gadgets, sports, toys, automotive and tools
as well as pantry (Kogan.com 2019).
Kogan.com is managed by five senior management members. These include the CEO, the
COO and CFO, CTO, the head of operational development, operational manager as well as
director of the strategy. These forms the overall management team of Kogan.com
(Kogan.com 2019).
3 Financial Instrument Analyses
Financial instruments comprises of some of the assets that could be traded or packages of the
capital which might be traded. They might be cash, proof of ownership interest within a firm
(share) or the contractual right in delivering or receiving cash. Besides, financial instrument
might be grouped into derivative or cash instruments. The cash financial instruments are
unswervingly firm and prejudiced by market and could be securities which are transferable
easily. They might be loans and deposits agreed by lenders or borrowers. On the other hand,
derivative instruments are valued based on vehicles’ primary the mechanisms like interest
rates, assets or the indices. Under Kogan.com Ltd 2018 annual report, it is evident that the
company deals with following financial instruments; first the rental bonds, account
receivables, the interest received, loans as well as borrowings, trade and the other payables,
financial assets, cash and the cash equivalents (Cotton 2018).
Off the balance sheet comprises of the financial items which are effectively liabilities or
assets within an entity but fails to appear on an entity’s balance sheet. An entity keep specific
liabilities and assets items off the balance sheet to present t investment community cleaner
balance sheet compared to what it would be if the items are included. Some of the most off
balance sheet items include the leaseback agreement, operating leases as well as receivables.