APDM - Speech or Presentation Example

APDM is the company that specializes in providing health services. They also specialize in providing the technologies for emerging markets related to quantifying human motions such as strokes, physical therapy, movement disorders and biomechanics. The company’s main aim is to develop the highest quality of technologies; those can help to monitor all the human motions with advanced sensors. APDM is operating in the market from three years, but it is not able to maintain their stability in the market yet.

The company made the material amount of loses in the year of 2011. For better understanding about the financial position of the APDM, a brief financial analysis of the company has been made belowIncome Statement AnalysisThe statement of comprehensive income for the year ended 2011 shoes that the company made net income $681,780.88. According to the company’s account the main source of income include the general services, technical assistance and the clinical data management service of the company.

On the other side, a material amount $172,804 has been given to customers as a discount. The company has incurred the cost of $364,658.85 against all their Net income from all sources. The company has made the gross profit of $317,122.03 with a gross profit ratio of 46.5% in year 2011. On the side of expenses, APDM incurred a huge amount of expenses in 2011. Expense figure include the large amount of Research and development expenses in it. This means that, APDM attribute major portion of their finance on research and development to develop the new technologies.

The company’s account shows the expense figure of $325,816.45 after including all operations and administration expenses. This figure covered almost all the gross profit’s figure that’s why company made the net loss of $8,694.19 at end of financial year. Breakeven AnalysisBreakeven cost = Fixed Cost / ContributionNOTE: Fixed cost and Contribution of APDM is calculating by extracting the figures form the company’s accounts.Fixed Cost = $69670*Contribution = Sales* – Variable Cost*Contribution = $681,780.

88 – $256,140 = 425,640Fixed cost includes all the expenses related to payroll, taxes, insurance, or other fixed costs.Sales include all the income form APDM operations.Variable cost includes all the variable expenses of the financial year 2011. Breakeven cost = $69,670 / 425,640 = $0.16 per unit.Proper breakeven could not be conducted due of data limitations. RecommendationsIn accordance with above analysis, there are many recommendations that the APDM consider in managing its finances. It can clearly be seen that in the income statement analysis, the company has incurred the huge amount of expenses in year 2012.

APDM should investigate that, is all the expense incurred in proper manner? On the other side, the expenses include the large portion of Research and development expenses. It is the indication that the company is trying to win the race form its competitors through developing new technologies. In addition, APDM should also investigate these figures due to their material nature. In addition, APDM can also avoid any of adverse situations by taking these measures. If the company was starting new projects in the year 2011, then now there is strong possibility that the company will maintain their position in next years.

New project can also be the reason of heavy research costs. On the other side of coin, PASM should take some steps to minimize its operational expenses. The company should also review its discount policy to make better financial performance. On the side of breakeven analysis, I am not able to extract any recommendation because of data limitations. More recommendation can be made with using the data of the company. In short, all these recommendations can play a major role to manage the finances in efficient manner.

References: Acca: Paper F5. London: BPP Learning Media, 2009. Print.Media, BPP L. Acca Paper F7 - Financial Reporting (int) Study Text, 2009. London: BPP Learning Media, 2009. Print.