Portfolio Management: Financial Data Analysis and CEO's Interpretation

This case study examines a portfolio company's financial data, including trends in total customers, new customers, and total sales across 2014, 2015, and 2016. A significant reduction in average customer spending per month is noted, prompting concerns about the declining pricing structure and sales value. The analysis explores whether the CEO should be satisfied with the data, highlights concerns about declining customer spending, and suggests follow-up questions regarding production costs and the actual impact on the organization's profitability. The case study references academic sources on investment analysis, portfolio management, behavioral finance, and risk management to provide a comprehensive overview of the financial situation.

Finance Portfolio Management
SHORT SYNTHESIS OF DATA

Trend of Total Customer, New
Customer and Total Sales
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2014 2015 2016
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Sales and Customer Trends
Total sales Total customers
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2014 2015 2016
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Trend of new customers and sales trending
Total sales New customers

Average Customer Spend in a Month
 Reduction in average spend in a month from 28.65 to
13.37
 The pricing structure has been declining
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2014 2015 2016
-
5.00
10.00
15.00
20.00
25.00
30.00
35.00
Average customer spend in a month

Reaction of the CEO
 Whether CEO should be happy about the data
 Concerns regarding the declining average customer spending
 Declining sales value of the product
 Whether the CEO shall follow-up questions about the data
 The data about of cost related to production
 The actual impact on profitability of the organization

Bibliography
 Chandra, Prasanna. Investment analysis and portfolio management. McGraw-Hill
Education, 2017.
 Pompian, Michael. Risk profiling through a behavioral finance lens. CFA Institute
Research Foundation, 2016.
 Salamon, Lisett, and Berenike Stehr. "Application of Copulas in Portfolio Optimization &
Financial Risk Management." (2018).
 Zopounidis, Constantin, et al. "Multiple criteria decision aiding for finance: An updated
bibliographic survey." European Journal of Operational Research 247.2 (2015): 339-348.

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