Implication of the Business Computing - Essay Example

Analysing A Spreadsheet And Presenting A Business Report Name Course Date Table of Contents Table of Contents 2 Introduction 3 Analysis 3 Discussion 5 Recommendations 7 Appendix 9 References 10 Introduction In any business enterprise records constitute the most essential elements for decision making. Records reveal the status of the business in a particular period in time. Seaview Apartments takes records of the operations going on around the business. Seaview Apartments constitutes a small apartment complex. It is situated in Rye, 300 meters away from the beach. Rye is a beachside town found in Mornington Peninsula. Seaview Apartments constitutes four accommodation apartments. Among these apartments, are a one bedroom deluxe , a two bedroom, a one bedroom, and a deluxe studio apartment. Each of these apartments is fully self-contained. The Seaview Apartments are owned by Shana who markets them through local newspaper advertisement and through the taking of bookings by email and over the phone. The business rents out the apartments in accordance with a set nightly rate, which varies in accordance with the type of apartment rented. A 15 percent discount is offered to a customer who rents an apartment for a period longer than 6 days. When bookings are made, the owner records them in the order in which they are received. The records taken in this case were manual initially. However, when the owner realized that the business was missing many valuable information or records, which could help in enabling better decision making, she decided to develop a simple spreadsheet model. Through this model, it could be possible to compare the popularity and profitability of each of the apartments. The model was also effective as far as “what if” analysis is concerned. This paper will go further to expound on the analysis of Seaview Apartments. It will highlight on the popularity and profitability of each of her four apartments. This analysis will also include some recommendations that can help in increasing the overall profitability of each of the apartments. Analysis From the spreadsheet, the one bedroom deluxe constitutes the most profitable apartment in the company. It has a percentage profit of 41.39. On the other hand, the least profitable apartment is one bedroom, with the total percentage profit being 6.84%. Relative to the other apartments, these profit levels are high and low respectively. This is because all the other factors constant, the profitability of each of the apartment should not show a lot of disparities. As far as popularity is concerned, two bedroomed apartment is the least popular of all the four apartments on the other hand, the deluxe studio is the most popular of all the apartments. Popularity is indicated by the number of bookings for every apartment. In terms of utilization, the one bedroom deluxe is utilized to a maximum potential. This is because it has higher profit having low popularity compared with other apartments. From this profit analysis, it is evident that there are several other factors that need to considered for proper assessment of the profit. Among these factors are the expenses incurred in the construction of each of the apartment, the performance of other apartments related to this apartment and the prices for related apartments from within the area. The fact that each apartment has a set nightly rate for the entire year does not sound good in terms of business. This is because the rates for different apartments should be dictated by the demand forces. If the demand is high, the rates should be increased so as to increase profit. The introduction of three night minimum rule will increase the profitability of each of the apartments. This is because it will set the minimum returns expected from each booking. Therefore, with this minimum, the company can adjust the cost accordingly to obtain maximum profit (Donegan, 2002, p 25). Among the marketing ideas to be applied in the apartments is the internet marketing. This involves taking exclusive photographs of each of the rooms. When people see pictures through the internet, they become curious to go and experience the particular apartments in person. This is how customers increase. Discussion The information captured in the spreadsheet constitutes a number of areas. These different areas are presented in the different columns. This presentation of data is very important for analysis purpose. Consequently, the first column contains the apartment name. Under the apartment name, there is one bedroom, two bedroom, deluxe studio and one bedroom deluxe. The rest of the columns contain information regarding such important analysis tools as the number of nights customers rented the apartment throughout 2012, the total number of bookings, the average number of nights per booking, the total revenue per apartment, the total profit per apartment, the percentage of total profit and the average revenue per night in the last 365 days. In one year, the different apartments are rented differently. However, there is a close association, at one side, between the one bedroom and two bedroom in terms of the number of nights they are rented and at the other side, between the deluxe studio and one bedroom deluxe. For the one bedroom and two bedroom, they are rented for 63 nights each per year. For the deluxe studio and one bedroom deluxe, they are rented 129 and 125 nights each per year (Donegan, 2002, p 25). In terms of the total bookings, the disparities recorded in the spreadsheet are an indication of the level or degree of advertising employed by the owner of the company as well as the nature of communication between the company and the clients. Ideally, considering the number of nights the first class of apartments was rented, it is expected that the number of bookings should have been the same or should have had no much disparities. However, this is not the case, in favor of the two bedroom. With 14 bookings, one bedroom is rented 63 nights . However, with 7 bookings, the two bedroom is rented for 63 nights. In this case, the way forward is to reinforce the advertisement and the communication method especially for the two bedroom apartment. This is because, if the company does something so that the number of bookings for the two bedroom apartment are increased to reach the same level as that of one bedroom, the number of nights for the two bedroom will rise above the current 63. This is because, with almost the same number of bookings, people spent a lot of nights in the deluxe studio and in the one bedroom deluxe over that in the two bedroom and one bedroom. This means that there are some features that keep more people rushing to the deluxe studio and one bedroom deluxe. If these features can be incorporated into the first class of apartments, chances are high that the number of nights will be recorded in the one bedroom and two bedroom apartments. The average number of bookings per night is a column that reveals the ration between the number of nights and that of bookings. The higher the ratio, the better the business situation.in this case, the one bedroom deluxe is producing the best results as compared with the rest of the apartments. It is therefore, a good base for the company to consider what the clients love within the one bedroom deluxe, so that it can apply the same for the rest of the apartments if possible (Hawkins, Turner, & Hailstone, 2008, p 48). Perhaps there could be a service that is offered in this well-performing apartment, which is not offered in the rest of the apartment. The company can increase the discount offered in terms of the nights rented for the one bedroom and two bedroom apartment. This will increase the number of nights that these apartments are rented and also increase the average number of nights per booking. The average number of nights per booking reflects the other areas given in the rest of the column in the spreadsheet. This therefore means that if the price of each of the apartment is kept in tandem with those for the other apartments, then the challenge to the company is that of employing the strategies that will increase the total number of bookings and the number of nights for each of the apartments. Of grater emphasis in this case is the one bedroom and the two bedroom apartments (Hawkins, Turner, & Hailstone, 2008, p 48). This spreadsheet provides limited information as far as the profit analysis is concerned . This is because in terms of percentage profit calculation, the owner is calculating the percentage for each apartment in comparison with that for the other apartments within her business. Though this will give the comparison between the four apartments, it may not give a clear picture of the profitability of the apartments. This is because profit is calculated or measured on the basis of the income or returns and the expenses (Hawkins, Turner, & Hailstone, 2008, p 48). Recommendations Therefore, the expenses incurred during the construction and the maintenance of each of the different apartments cannot be the same in any case. This means that for the apartment with the highest percentage of profit may have cost the company a lot of money during the construction and perhaps the maintenance. Therefore, its percentage profit relative to the other apartments may not be a good reflection of the actual profit expected. It is therefore, recommended that the owner includes a section of the expenses incurred in each apartment. This additional column will help in the decision making especially in devising a cost reduction measures can be conducted accordingly. If the number of nights for the two bedroom increases more than that of one bedroom, it will give an incentive to the company to come up with a strategy of increasing the number of bookings for the one bedroom. The possible recommendation is that the advertisement should be made online. The advertisement should also focus on the strengths of each of the apartment, the two bedroom apartment in this case. There is no much difference as far as the second class of apartment is concerned. However, the comparison between the second class of apartment and the first class of apartment can bring some incentive for the company. From the discussion, if there is any improvement to be made in terms of the number of nights they are rented out per year, then the first step is to divide the apartments into two categories or classes. The first class will consist of the apartments with low number of nights while the second class will consist of apartments with higher number of nights. The one bedroom and two bedroom will therefore fit into the first class while the deluxe studio and the one bedroom deluxe will fit into the second class. The analysis in this paper will be based partly on the kind of apartment and partly on the two classes. Appendix Summary - Seaview Apartments 2012 Bookings, Revenue and Profit Apartment Name Number of nights apartment was rented throughout 2012 Total number of bookings Average number of nights per booking Total Revenue per Apartment Total Profit per Apartment Percentage of Total Profit Average revenue per night during 2012 (365 days) One Bedroom 63 14 4.50 $ 8,227.00 $ 1,727.00 6.84% $ 22.54 Two Bedroom 63 7 9.00 $ 11,794.00 $ 5,294.00 20.96% $ 32.31 Deluxe Studio 129 16 8.06 $ 14,279.50 $ 7,779.50 30.81% $ 39.12 One Bedroom Deluxe 125 12 10.42 $ 16,952.00 $ 10,452.00 41.39% $ 46.44 SUMMARY - REVENUE/PROFIT Total Revenue $ 51,252.50 Total Profit $ 25,252.50 Total Number of Bookings 49 Average Revenue per night $ 35.10 References Donegan, M. C. (2002). Growth and Profitability Optimizing the Finance Function for Small and Emerging Businesses. New York, NY, John Wiley & Sons. http://public.eblib.com/EBLPublic/PublicView.do?ptiID=140164. Hawkins, A., Turner, C., & Hailstone, P. (2008). The improving profitability pocketbook. Alresford, Management Pocketbooks. Read More