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Financial Analysis The Clipboard Tablet Co. Case Study


Overview

The Clipboard Tablet Co. is a firm that was run by Joe Schmoe at a time when the company required the development of new products. The company developed three distinct products namely X5, X6 and X7 PC tablets. As a new VP in charge of the company’s marketing department, I have seen assigned a task to analyze the performance of the company under Joe’s tenure in the past six years.

In the process of undertaking analysis of the company’s performance, we had to look into the organizational development of the Clipboard Tablet Company. Joe Schmoe’s tenure in charge of sales and marketing was marked by the sale of X5, X6 and X7 tablet models. The analysis of the Clipboard Tablet Co. focused on the financial analysis of the company, the sales and profitability of the three tablet products over a 6 year period.

Analysis

The analysis markers for the Clipboard Tablet Co. include product development, sales, pricing and performance compared to its competitors. The analysis of these markers is shown below:

Product Development

In relation to Clipboard Tablet Co. we have to look into the products of the company which are X5, X6 and X7 tablets developed and marketed by the company. The X7 tablet developed in the year 2010, it was launched, marketed and sold in the year 2011.

In terms of the development of other tablets by the company, we look at X5 and X6 as products of the company. X5 and X6 tablets were developed prior to the year 2010 and thus they were developed earlier and the sales of these tablets were based on improvements of features and add-ons (Yaeger, 2009).

The company did not abolish or come up with new clone versions of the tablet and thus sales relied upon the popularity of the old versions of X5 and X6 tablets. We made an analysis of the allocation of funds to the R&D department over the last six years. From our analysis, we witness that the company spent small in terms of the development of new products.

For instance, in the years 2010 and 2011, the company retained R&D expenses at around $ 22 million. While in the years preceding 2015, the company spent less and less on the development of new products (Stice, 2010). The R&D costs kept reducing at a level of around 30% and the only new product that was developed was the X7 tablet.

Sales

The analysis of the sales the products X5, X6 and X7 shows that the Clipboard Tablet Co. performed well in the past six years. The sales performance of the tablets shows that the company sold a lot of X5 tablets in the last six years.

In the year 2010, the company sold close to 1 million units of X5 tablet which netted the company around $ 249 million. The X5 tablet sold a lot of units in that year and the performance of X6 was also exemplary. As a result, based on the analysis of the sales performance, we notice that the sales of all products were on a growth path (McDonald, 2011).

The sales figures for the X5 tablet have shown a growth in the figures from the 2010 period all the way to the year 2012. The increase in sales contributed to around 67% rise in the sales of X5. From the year 2013 to 2015, the sales of the X5 tablet declined tremendously by around 67%. Sales in many ways contribute to good profit margins and thus we had to analyze the profit margins brought about by the sale the tablets (Jones, 2011).

Based on the data from the sale of the three tablets we realize that the revenues of the X5 tablet kept decreasing as time went by. As a result, the company profits with time were decreasing to a level that the revenue for X5 tablets amounted to around $ 137 million in the year 2015. This is compared to the initial revenue of around $ 248 million that the tablet realized in the year 2010.

On the other hand, the X7 tablet realized revenues of around $ 30.3 million in its initial year of 2011 and this has grown to around $ 122 million by the end of 2015. This shows that while the sales growth figures grew by around 30% per annum the sales for the X7 tablet the sales figures for the X5 tablet declined by around the same margin over the same period.

Pricing

In the process of marketing and selling goods, it is important to market and sell your goods within a good price range. The tablets were sold at different market prices due to their differences in terms of performance.

In the last 6 years starting from 2010 thru to 2015, the X5 tablet retailed at a fixed price of $ 265 while the X6 was sold at $ 420 and the X 7 at $ 195. The major driving force for determining the price of the tablets was the superiority and the popularity of the tablet brand.

Performance

Measuring the performance of a company depends on the performance of its products, finances and analysis of the competition. Based on the sales prices of the tablets, the Clipboard Tablet Co. maintained steady prices for the tablet at around $ 265, 420 and 195 respectively for the X5, X6 and X7 tablets.

This was in comparison to the prices for other tablets which sold at different retail prices. For instance, the most tablets retailed at around $ 200 up to $ 700 for high end tablets. Thus, based on this assessment we can contend that the Clipboard Tablet’s Co.’s competitors were performing well compared to the company.

In terms of sales and revenue income, the company’s revenues continued to dip as revenue for its popular X5 and X6 brands continued to drop while the X7 sales were not picking up fast to catch up with the low sales of the other brands (McDonald, 2011). As a result, the company’s position compared to its competitors was dismal.

Summary

The analysis of the Clipboard Tablet Co.’s performance under Joe shows lack of foresight and strategic planning necessary in organizational development. Product development is a major in the process of selling consumer goods. As a result, Joe should have emphasized on the development of new products for the company since the company relies totally on the development and sale of tablets.

For instance, in the last 6 years the company’s R&D and fixed costs have remained the same while the revenues and profits have changed significantly. This is a mismatch of needs that should have been addressed a long time ago when the company was in need of restructuring. Moreover, allocation of costs was done in a manner whereby they were equally shared among the three main product segments for the Clipboard Tablet Company.

As a result, in the periods 2010 to 2012, the X5 tablet sold more than the X6 and X7 brands and the reverse was witnessed between 2013 and 2015. In terms of sales and revenue, the company experienced high sales and revenue in the years 2012 and 2013. While the lowest revenues were witnessed in the years 2010 and 2015 due to poor sales of all the products ranges (Jones, 2011).

The major problem in terms of sales was in pricing and timing since the company did not undertake good pricing models that would have netted the company good revenue streams. For instance, in the early years the company could have priced the X5 tablet as a premium product while discount on the other X6 and X7 tablets.

As a result, the sales units coupled with good pricing models would have netted the company good sales revenues. In general the performance of the company has been declining based on the revenue and profit figures (Stice, 2010). Since the company has a product mix that does not sell to well and pricing strategy that puts the company in a weak position compared to its competitors.

The best strategy that would have been adopted by Joe was to sell the X5, X6, and X7 tablets at premium prices when the demand was high and discount new products as a means of attracting new consumers. Moreover, the company should have shelved the X5 tablet once demand had dipped to save the company from losses.

References

Jones, J., Heitger, D. & Mowen, M. (2011). Cornerstones of Financial and Managerial Accounting. Sydney: Cengage Learning.

McDonald, M., Payne, A. & Frow P. (2011). Marketing Plans for Services: A Complete Guide. Chicago, IL: John Wiley and Sons.

Stice, J. & Swain, M. (2010). Accounting: Concepts and Applications: Concepts and Applications. New York, NY: Lippincott Williams & Wilkins.

Yaeger, T. & Sorensen, P. (2009). Strategic Organization Development: Managing Change for Success. Boston, MA: Jones & Bartlett Learning.

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IvyPanda. (2019, June 11). Financial Analysis The Clipboard Tablet Co. Retrieved from https://ivypanda.com/essays/financial-analysis-the-clipboard-tablet-co/

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"Financial Analysis The Clipboard Tablet Co." IvyPanda, 11 June 2019, ivypanda.com/essays/financial-analysis-the-clipboard-tablet-co/.

1. IvyPanda. "Financial Analysis The Clipboard Tablet Co." June 11, 2019. https://ivypanda.com/essays/financial-analysis-the-clipboard-tablet-co/.


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IvyPanda. "Financial Analysis The Clipboard Tablet Co." June 11, 2019. https://ivypanda.com/essays/financial-analysis-the-clipboard-tablet-co/.

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IvyPanda. 2019. "Financial Analysis The Clipboard Tablet Co." June 11, 2019. https://ivypanda.com/essays/financial-analysis-the-clipboard-tablet-co/.

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IvyPanda. (2019) 'Financial Analysis The Clipboard Tablet Co'. 11 June.

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