Qatar cinema and film distribution Company - Research Paper Example

In the year ending 2011, the company realized an increase in revenue through improved sales as compared to 2010 (Kotler, 2009). Its sales improved from QAR 16.28 million of the previous year to 17.30 million Qatari Riyals, though remained a little lower than the QAR 17.33 million of the 2009 (Ehrhardt and Brigham, 2009). Several factors; both micro and macroeconomic factors might have led to this. Macroeconomic Variables Macro-economic variables are the environmental factors that affect the production and income of a business entity.

They include variables as inflation, unemployment income, global financial conditions, and industrial production among other factors (Sale, 2006). One of the most notable macroeconomic variables that have continued to influence the company is the global financial conditions (Ehrhardt and Brigham, 2009). During the period of 2008, the company recorded poor sales due to the global financial recession that rocked the whole of the world markets. The company was not able to import and distribute (Bricault, Hodgson, and Gulczynska, 1978) products at affordable cost and cost effective.

 A number of the companies that it was associated with decreased their production capacity in order to respond to the capital market conditions. When there the rate of production goes down significantly, there is a buildup of pressure for the respective industries to satisfy the larger market. This could be due to high interest rates, global financial problems (Kotler, 2009). The increase in sales in 2009 was due to the reformation that was taking place in the market after the recession. Positive economic growth has also contributed to its continued resilience in the market economy.

Industry Analysis The industry has continued to build up because of Qatar’s positive economic growth. The market has been favorable for the company (Ehrhardt and Brigham, 2009). However, challenges like high competition brought in by companies like Jarir marketing company, Saudi hotels and Resort Areas, Al-tayyar travel group, IFA hotels and Resort, Al-Othaim Holding Company, the Saudi Research and marketing group. All these companies produce and engage in almost the same line of business like that of Qatar Cinema and Film Distribution Company (Bricault, Hodgson, and Gulczynska, 1978).

These alongside the diversification of the market, increases the level of competition the company faces. Market regulations that increase the costs of operation have also contributed to financial challenges the company has faced in the past. However, there are regulations that have sought to expand and protect the local business in relation to the international counterparts have helped the company to stabilize and continue to grow in the competitive environment (Kotler, 2009). The industry enjoys a large market both at the local and international levels.

This has enhanced importation and distribution of the cinema and movie distribution. Market Valuation Ration Qatar Cinema and Film Distribution Co. Benchmark EV/EBITDA next 12 month Company Qatar Cinema and Film . N/A Pee Qatar Cinema and Film. excluded 52.0 Qatar Cinema and Film . included 53.0 Sector Film and cinema distribution equipment’s and services (Close) 57.80 S&P 500 16.78 STOXX Europe 600 8.58 Country QAT 6.98 4- Determine the optimal price of the stock, by employing the equation we talked about (constant