Business Financial Analysis Report: Revenue, Costs, and Profitability

This report provides a comprehensive financial analysis of a dance center's performance, focusing on revenue generation, cost structures, and profitability. The analysis includes a memorandum interpreting financial data, assessing revenues from dance performances, and evaluating break-even points. The report examines fixed costs, contribution margins, and provides recommendations for improving profitability, including increasing sales and introducing new dance shows. The essay topic summarizes the shortcomings of break-even analysis, considering demand, resource constraints, and the impact of pricing strategies. Module 2 delves into pricing strategies, customer profitability, and the advantages and disadvantages of financial and non-financial markets. The conclusion emphasizes the importance of strategic pricing and sales management to achieve financial goals. The report uses data from three dance performance groups and two new dance shows to assess the impact of revenue and profitability, ultimately highlighting the importance of customer profitability and market demand in achieving the organization's financial objectives.

Running Head: BUSINESS FINANCIAL ANALYSIS
Business Financial Analysis
Name Of the University
Name of the Student
Author Note

1BUSINESS FINANCIAL ANALYSIS
Table of Contents
MEMORANDUM...........................................................................................................................2
Revenue generated from Dance Performances............................................................................2
Fixed cost.....................................................................................................................................2
Contribution Margin....................................................................................................................3
Break-Even Analysis...................................................................................................................3
Recommendation.........................................................................................................................3
ESSAY TOPIC: SUMMARIZING BREAK-EVEN ANALYSIS..................................................4
Introduction..................................................................................................................................4
Discussion....................................................................................................................................4
Conclusion...................................................................................................................................5
Module 2 SPL..................................................................................................................................6
Introduction..................................................................................................................................6
Discussion....................................................................................................................................6
Conclusion...................................................................................................................................7
References........................................................................................................................................8

2BUSINESS FINANCIAL ANALYSIS
MEMORANDUM
To: Ms Annie Smith, Director
From: XYZ, Financial Analyst
Subject: Interpretation of Financial Analysis
Date: April 30, 2019
This memorandum has been prepared to interpret the financial analysis of the different
dance group performances Revenues and evaluating Break, even Revenue and profit of the
Organization.
Revenue generated from Dance Performances
Revenues of this Dance centremade from different dance concerts that divided into two
orchestra pricing section for lower and upper customers. Hip-Hop dance and Jazz and Tap dance
performance made quite a good amount of selling tickets whereas Christmas spectacular dance
which is very famous gets much preference from the customer that is 100% sale.
Fixed cost
The direct fixed cost is higher for the jazz and tap dance compared to the other two
dances Fixed cost and it is because of the costumes, salaries and rehearsals.

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Contribution Margin
Christmas spectacular performance group has high demand by the customers, and thus its
contribution margin is also high from the other two groups which imply that the company will
generate profit from its production.
Break-Even Analysis
Break-even revenues reflect the Christmas spectacular contribution margin is higher than
its fixed cost, which interprets a favourable scenario to achieve the break-even point. Its Break
even Revenue is 0.8477842, which is 0 >1.
Recommendation
Ms Annie Smith has to generate an operating profit of at least $ 200,000 and this can be
possible when the sales for dance performances has to be increased by 300% to 510% for each
performance
Company has to introduce a famous dance show to attract customers and two dance
shows are Joonbo dance and Art dance to generate sales of more than $ 400,000 to $ 500,000 to
attain profitability.

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ESSAY TOPIC: SUMMARIZING BREAK-EVEN ANALYSIS
Introduction
This Topic summarizes about faults of the Break-Even Analysis of the multiple Dance
performance concert and affects of analysis on demand and resource constraints.
Discussion
 Shortcomings of the Break-even analysis
Multiple Dance Group
This Dance Centre has multiple concert performance Group and each group has
different contribution margin, fixed cost, variable cost and Revenue generation amount,
which affected each to get Break-Even Revenue. Hip-Hop Concert and Jazz and Tap Dance
generated the Revenue, which is lesser compared to Christmas Spectacular, and Christmas
spectacular has high demand and contribution margin due to its popularity. Each total fixed
cost varied as per performance and can change according to the performace that can affect
the sales (Jolly 2017). Here, the Break-Even point on Revenue, shown a positive impact on
contribution margin but the less fixed cost can help increase the profitability of the company.
 Demand and Resource constraints affect the analysis
Demand and resource constraints can impact the multiple dance performance analysis
through the demand of the dance group. Increase in the dance performance will affect the
Revenue and thus will increase the Contribution Margin to attain profitability. However, on
the other side, if the Revenue is low, it decreases the contribution margin, which affects the
Organization to generate less profit. Resource constraint limits the production of sale because

5BUSINESS FINANCIAL ANALYSIS
it affect the contribution and profit (Zhang et al 2016). Annie smith Dance Centre can
increase the sales as per the demand of the performance group and which raise the raise the
profit of the company.
Conclusion
It can be concluded that the break-even point on Revenue achieved a good contribution
margin for the three dance performance group. However the contribution margin and segment
margin of the Christmas spectacular group performed better from the other two dance concert.
To achieve the profit, the Organization has to raise the sales as per requirement and to avoid
resource constraint to achieve the profit expected at least $ 200,000 or more. It has to increase
the sales capacity by introducing more dance performance and increase the current dance sale
tickets, which has high demand, can increase the contribution margin. Lower cost or expense
(Variable as well as Fixed cost) will help generate the desired profit.

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Module 2 SPL
Introduction
This Module discusses the pricing strategy of market or customer, impact on Revenue
and profit based on the assumption, advantage and disadvantages of both financial and non-
financial and customer profitability structure. Pricing is a vital part of an organization and
customer; however,exclusive pricing deals with the different price offered to the same product
based on the quality, quantity, time and type of customer.
Discussion
 Special pricing for some Market or Customers
In the Global market, pricing is an essential element to deal in the market and
with the customer. Pricing strategy has to differ based on the customer profile in the
market . For the existing Organization, in some situation, they revise the pricing policies
based on the market structure and new group introduction in the market (Dai et al 2019).
Organization role their price to increase the market share, they may increase or decrease
the price based on the popularity of the product. To explain in a better way, the Annie
smith dance centre allocates the price based on the specific categorization. Each dance
concert is performed based on their demand and sales.
 Determining Customer Profitability
Determining customer profitability is a profit determined by an organization after
serving a customer or a group of the customer over a specified period. It is a difference
between what an organizations earned from sales and the cost of the product and other
expenses from the customer for a particular period. Profitability includes the Revenue

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and customer relationship (Kumar 2016). As per the Annie Smith Dance Centre, its profit
is determined after revenue generation by three existing concerts and the two new concert
excluding the variable and fixed cost.
 Effect of Revenue and Profitability
As per the above assumption regarding the increasing Revenue in the dance
centre, it is assumed that the sales are increased by 300% to 500% for the existing dance
performance group, and the new group has generated $600,000 approximate revenue due
to its popularity and high demand in the dance field. However, the Organization expected
to create a profit of at least $200,000, but it madea profit of $ 280,000 which reflect an
excellent performance of the Organization.
 Advantage and Disadvantage of financial and Non-financial market
The benefit of the financial market is the price, which based on the service or the
product on demand. Disadvantages of the financial market are the rigidity of the price
factor from some organization in the market.
Advantage of the non-financial market are non-target oriented and organization focus on
the long term strategy. Disadvantages of Non-financial Market is the time and cost of the
Organization
Conclusion
From the above discussion, it can conclude that special pricing for customer or market
depends on an organizational goal and market demand. Customer profitability raised from the
revenue earned by an Organization. Effect of revenue and profitability calculated from the dance
performances which given an operating profit of $ 280,000.

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References
Dai, L., Wang, X., Liu, X. and Wei, L., 2019. Pricing strategies in dual-channel supply chain
with a fair caring retailer. Complexity, 2019.
Jolly, G.S., 2017. Unit-12 Profit Planning and Break–Even Point. IGNOU.
Kumar, V., 2016. Introduction: Is customer satisfaction (ir) relevant as a metric?. Journal of
Marketing, 80(5), pp.108-109.
Zhang, J., Wei, Q., Zhang, Q. and Tang, W., 2016. Pricing, service and preservation technology
investments policy for deteriorating items under common resource constraints. Computers &
Industrial Engineering, 95, pp.1-9.