An Analysis of the Financial Performance of Grocon Pty Ltd

This report provides a comprehensive analysis of the financial performance and financial structure of Grocon Pty Ltd. It begins with an executive summary outlining the report's objectives, which is to identify and address the financial issues facing Grocon. A detailed literature review explores the concepts of financial performance and capital structure, highlighting their importance for organizational growth. The research methodology employs a case study approach, emphasizing qualitative data collection and analysis to gain in-depth insights. The findings section presents an analysis of the collected data, followed by reflections on the implications for Grocon. The report concludes with practical recommendations aimed at improving Grocon's financial performance and optimizing its financial structure, supported by references to relevant literature and appendices.

Running head: FINANCIAL PERFORMANCE OF GROCON
Financial Performance of Grocon
Name of the Student
Name of the University
Author Note

1FINANCIAL PERFORMANCE OF GROCON
Executive Summary:
The main aim of this report is conducting a research regarding financial performance and
financial structure of the Grocon Pty Ltd. It has been assessed that Grocon is currently facing
some of the crucial financial issues due to which Grocon needs an improved financial
performance and an optimized financial structure. In this report research has been done regarding
improvements of the financial performance and optimized financial structure of Grocon. In this
report first a vast literature review has been done regarding the financial structure and financial
performance of the organizations. Following that research methodology for the conducted
research has been demonstrated. In the further part of this report findings from the research has
been presented. Lastly, in this report implication of this research and recommendations regarding
the research has been shared.

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Table of Contents
1. Introduction:................................................................................................................................3
2. Literature Review:.......................................................................................................................4
3. Research Methodology:...............................................................................................................7
3.1 Case Study Method:...............................................................................................................7
3.2 Data Collection:.....................................................................................................................8
4. Presentation of Findings:.............................................................................................................9
4.1 Analyzing the Data:...............................................................................................................9
4.2 Reflection on Findings:........................................................................................................11
5. Implication and Recommendation:............................................................................................12
6. Conclusion:................................................................................................................................14
7. References:................................................................................................................................16
Appendix:......................................................................................................................................20

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1. Introduction:
Grocon Pty Ltd is one of the largest private sector in Australia which is operational in
development, funds management and in the construction sector of Australia. Currently this
organization is having its head office in the Melbourne, Victoria. There are other offices of the
Grocon in Australia which are located in Brisbane and Sydney (Chan and Martek 2017). Grocon
has a wide implication in the construction sector of Australia. Grocon has successfully delivered
five tallest buildings in Australia. Currently Grocon is facing various of issues regarding the
financial performance and financial structure as their business plan is not efficient enough. This
is the main issue due to which Grocon is facing financial problems but there are several of other
problems for which this financial issues are occurring within the Grocon (Ward and Jacobs
2017). Thus it is very much important for the Grocon fix this issues within organization so that
proper financial performance can achieved.
Here the main aim of this projects is demonstrating important procedures through which
perfect financial performance and financial structure within the organization can be achieved.
This project is important for the Grocon as financial performance is crucial for the organizations
(Steinhardt et al. 2019). This is important for the Grocon as depending on the financial
performance how the Grocon will be able to use its assets to generating revenues. If financial
performance of the organization poor then it is very much obvious that business will be failed to
generate high amount of revenues which can often led to financial loss for the organizations
(Skaik, Coggins and Mills 2016). The financial performance of the organizations also indicates
financial health condition of an organization over a specific period of time. Thus financial
performance is an important aspect for the Grocon which need to be improved and the measure
for improvement will be discussed in this report. With the financial performance of the

4FINANCIAL PERFORMANCE OF GROCON
organizations financial structure is also important in this aspect. Financial structure is actually
the mix of debt and equity which is used by the organizations for financing its operations. This
financial structure is also referred as the capital structure for the organizations (Serfling 2016).
The financial structure or the capital structure directly affects the value and the risk associated
with the current business procedures thus a proper financial structure is important for the Grocon
which is currently not present. This document is important for the Grocon as it will help to
develop the financial performance of them and with that this document will also help to improve
the financial structure of the organization.
For the research in this document literature review will be presented which will be
demonstrating the main concepts related with the project. In the next section research
methodology will be discussed in this report. In the research methodology the methodology for
this research will be demonstrated. Methods for data collection will be also discussed in this
context. Following that analysis of the gathered data in this report will be done and therefore
reflection on the findings will be provided. In the further section of this report implications and
the recommendation will be provided regarding current situation of the Grocon organization.
2. Literature Review:
The growth of the business for the organizations is depending on performance of them
which actually derived from effectiveness and efficiency of the operational activities of the
organization. In this aspect financial performance of the organization plays an important role as
this has a huge contribution in the growth of the organizations. Financial performance is
important for the organizations as it a part of the organizational development (Nimtrakoon 2015).
Many of the organizations fails in their due to the poor financial management. This financial
performance is very much important as this helps the organizations to reach to the business goals

5FINANCIAL PERFORMANCE OF GROCON
and helps organizations to improve the businesses (Chang et al. 2016). For the financial
performance of the organizations there is a crucial impact of the capital structure. This capital
structure is actually the financial structure of the organizations which plays crucial role for the
growth of the organizations (Sundaresan, Wang and Yang 2015). This capital structure or the
financial structure is very much important for the organization as organizations uses this
financial structure for performing day to day operations, financing the assets and for the future
growth. From a tactical perspective the finance structure almost influences everything from the
risk profile of the firm. The financial structure is also important for the organizations as through
this it can be determined how risky it is invest to a business and from the risk it can also be
determined how expensive the financing should be. This capital structure increases the value of
the firm helps the organizations to utilize the available funds in the organization in a perfect way
(Öztekin 2015). The capital structure helps the organization to maximize the return and reduces
the cost of capital.
As per the capital structure theory of Modigliani and Miller, which is known as the
capital structure irrelevance, provides the statement that relationship among the cost of capital
and capital structure is irrelevant (Brusov et al. 2018). This actually defines that increment in the
debt is not able to effect the cost of capital. Thus, expectation of the investor regarding the future
benefit are solely effect on the value of firm and the cost capital. Later, Modigliani and Miller
showed a new evidence regarding effect of cost of capital on the capital structure. This
considerations are very much important for the perfect growth of the organizations.
Another important theory in this aspects is the theory of pecking order. This theory is
actually the result of asymmetric information (Serrasqueiro and Caetano2015). This type of order
model does not elaborates the optimal capital structure as the significant point but actually

6FINANCIAL PERFORMANCE OF GROCON
elaborates that firms consists two type of main sources for funding of the financial needs of its
which include external and internal finance (Eisfeldt and Muir 2016). This theory claims that all
the firms always gives priority to internal finance while for using first. After the internal finance,
external finance is considered. In such of the cases when internal finance is not enough for
funding of the investment projects the firms may or may not opt for an external financing. If the
organization chooses some external financing additional costs need to be minimized (Giebel and
Kraft 2017). To minimize this additional cost of asymmetric information, managers always go
for choosing among different types of sources of external finance. Firms always prefers to utilize
the debt leverage firstly. Secondly the firms goes for issuance of the preferred stock and
following that firms goes for issuance of the common stock.
According to Epstein, Buhovac and Yuthas (2015), financial performance of the
organizations is one of the crucial challenges in the aspect of corporate sustainability. In this case
it has been determined that environmental and social activities generates these financial
performance.
The authors Ozkan, Cakan and Kayacan (2017), has elaborated the VAIC model with the
financial performance. As per the authors this VAIC model is used widely for measuring of
financial performance of the firms within various of countries (Bayraktaroglu, Calisir and
Baskak 2019). Thus, wide range of studies are present which investigated the impact of
intellectual capital on the performance of the firms by means of the VAIC model. From various
of studies it has been assessed that this intellectual capital is actually having a positive influence
on the financial performance of various types of organizations. As per the author the return on
assets and the return on equity are the two important indicators regarding the financial
performance. From various of studies it has been also assessed that there is a positive

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relationship among the VAIC and the indicators of financial performance. From many of the
studies the authors has also assessed that HCE, which one of the most important VAIC
component is actually having positive impact on the financial performance. Many of the studies
also suggest that CEE, which another component of VAIC is having positive impact one the
financial performance (Isola, Odekunle and Akanni 2017).
According to the authors Kim, Lin and Chen (2016), financial structure of the
organization helps the organizations in their constant growth and with that it also helps to
increase the access to the external type of finance. The authors has defined that interaction of the
small firm share and financial development is actually positive which is also of the statistical
significance. Thus it is determined that component that are determined previously of
development and financial structure is having strong effect on the of the small-firm industries
(Luo, Zhang and Zhou 2018). It has been assessed that there is a relationship among the financial
structure of a small firm industry and the growth of the industry is not only statistically large, but
also it is economically large.
As per the Allen et al., (2018), there are various of studies are present which explain the
main differences within the financial structure by utilization of the legal origin and protection,
history, politics and culture as the factors. Authors has been assessed that the financial structure
of an organization cannot be changed till there is no change in the economic structure. Any type
of regulations which forcefully changes the financial structure, potentially can cause a
discrepancy in the financial and economic structure (González 2015). Thus this type of effort can
cause a financial constrains which can stall the economic growth of the organizations.

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3. Research Methodology:
3.1 Case Study Method:
For the research in financial performance and financial structure in this report case study
method of research has been utilized. The case study type of research methodology is actually a
detailed and in-depth study of the small groups or some individuals (Quinlann et al. 2019). As
the case study type of research methodology has been chosen for this report the gathered data
should be qualitative in nature. This will result a narrative description of experience or behavior.
The optimal reason behind selecting the case study method in this context is that it will focus
directly on the financial performance and structure of the organization and will provide a high
level of detail which is the most important requirement for this project (Cronin 2016). By
utilization of the case study research method both of the subjective data and the objective data
can be combined which will feature an in depth understanding. This case study method of
research are most suitable for finding the answer of the question why or how (Mills et al. 2017).
By this type of questions in depth data within a natural type of setting can be achieved. In this
type of cases most accurate data is achieved as the researcher will not be able to control the
events that are occurring. The main five steps of the case study method are the identification and
definition of the research questions, selection of the cases, collection of the data, evaluation of
the data and presentation of the gathered results (Yazan 2015). Research questions are
established for focusing on fix point of the study. Cases are selected in this case for collection
and analysis of the data. For the evaluation of the data various types of methods for analysis of
the data are used by the researcher.

9FINANCIAL PERFORMANCE OF GROCON
3.2 Data Collection:
For this research in the financial performance and financial structure case study type of
research methodology has been chosen in this case. As case study type of research methodology
has been chosen in this context the collected can be qualitative in nature. The secondary type of
data is actually readily available from other sources. This type of data can be easily obtained
from the sources for the research purpose (Johnston 2017). While research is done for a specific
type of organization, which has been done in this context, the gathered data can be both internal
and external of the organization. The main internal data which can be used for the research
purpose are the financial statements, sales report, organizational information, business journals
and organizational report and feedbacks. The main advantages of collecting the secondary data is
that secondary type of data are easily available thus required time for gathering relevant
information for the research is quite less (Stevenson and Cole 2018). Also, expenses for
gathering this type of data is quite less while compared with the primary type of data collection.
Here for this research, the important secondary data which will be utilized for this research are
the industrial data, business journals, organizational information and other similar case study
report on the financial performance and structure.
4. Presentation of Findings:
In this section of this report data analysis has been done of the collected data related with
the Grocon Pty Ltd. Only secondary type of data has been collected in this case for the analysis
purpose. These secondary data has been selected in this case for increasing the overall quality of
the report and for making a better report for the analysis part. Various types of sources has been
used in this context for collection of the relevant data.

10FINANCIAL PERFORMANCE OF GROCON
4.1 Analyzing the Data:
The data which has been gathered in this case need to be analyzed briefly. From the
current financial report of the organization and from other business journals it has been assessed
that currently Grocon need to take some important steps so that overall financial performance of
the organization can be improved. According to Mirgorodskaya et al., (2017), reducing or
rearranging the whole expenses is very much important for improvement in the financial
performance of the organizations. In this context from the authors it has been assessed that larger
expenses can be done using a periodic type of payment plan instead of payment in once.
Management of the energy in a perfect way is another way of reducing the overall expenses.
Through this overall financial performance of the Grocon will be improved surely. From the
business reports of the Grocon it has been assessed that one of the important issue due to which
the financial performance of them is poor is the improper type of business procedures. The
business procedures of the Grocon is not efficient enough for a good financial performance.
According to Bleoju et al., (2016), implementation of the new marketing techniques can
effectively improve the overall financial performance of the organizations. Here new digital type
of marketing techniques for the organizations can be implemented instead of traditional type of
marketing technique. This marketing techniques are very much cheaper compared with the
traditional type of marketing techniques. By following this type of marketing techniques overall
financial performance of the Grocon can be improved.
The authors Epstein and Yuthas, (2017), as also provided another idea for improving the
financial performance of the organizations which can be also used for Grocon Pty Ltd. This cash
flow statements consists all the outgoing and the incoming cash items for the future. Through
this planning can be done ahead of time so that it can be ensured that all the organizational

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expenses are covered. For this, cash flow statement of the organization need to be analyzed and
through it overall financial performance of the organization can be improved. In this context the
cash flow of the organization can also be improved which will actually improve the financial
performance of the organization. For the improvement of the cash flow in the organization the
invoice need to be formatted correctly at the purchase time. From the organizational reports it
has been assessed that Grocon is lacking proper type of invoice generation, thus this area of the
Grocon need to be improved so the improved financial performance can be achieved. With that
for improving the cash flow within Grocon outstanding payment of the customers need to be
cleared as soon as possible. From various types of secondary data, above discussed solutions has
been gathered which can help to improve the financial performance of the Grocon.
In this aspect creation of an optimal financial structure is also crucial for the Grocon so
that financial structure of it actually improves constantly. To achieve the optimal financial
structure for the Grocon. The optimal financial structure for the organizations can be achieved by
objectively best mixture of the debt, common stock and the preferred stock.
According to Liu and Zhang, (2018), the optimal financial structure is capable of
maximizing the market value of the organization and with that it is also capable of minimization
of the cost of the capital. From the financial structure of the Grocon it has been analyzed that
currently the financial structure of the organization is not in a stable state. Thus from the research
it has been assessed that financial structure of the Grocon need to be optimized so that better
financial management can be achieved within Grocon.
4.2 Reflection on Findings:
From the findings it has been assessed that there is an enough room for the Grocon so
that their overall financial performance and financial structure can be improved. From the