Analysis of the Operation and Financial Condition of the Enterprise

Analysis of the Operation and Financial Condition of the EnterpriseTable5.13.Estimation of the gross profit margin by quarter for the period from31/03/2XX8 to 31/12/2XX9 (in CU)March,2XX8June,2XX8Sept.,2XX8Dec.,2XX8March,2XX9June,2XX9Sept.,2XX9Dec.,2XX9Net turnoverby quarter 150 046 196 977 376 845 350 815 264 220 290 353 313 088 319 197Gross profitor loss byquarter 32 055 -53 726 135 160 -25 276 49 560 -147 925 -3 082 111 596Gross profitmargin byquarter, inpercent 21,4 -27,3 35,9 -7,2 18,8 -50,9 -1,0 35,0Having summarised full information regarding the profitability of the enterpriseconclusion may be drawn that the minimum level of profitability has not been set until2XX9, at which the enterprise would implement its projects, because until then for eachproject a bid has been prepared for the building contractor. Building contractors collectsthe bids from several sub-contractors and afterwards it announces the lowest price to twoto three potential sub-contractors, the idea behind being that should any of these subcontractorsoffer an even lower price the one offering the lowest price would get thecontract. Thus the potential sub-contractors are lowering each other’s prices. As a resultthe contractor is getting the lowest possible bid, while sub-contractors are getting projectswith low profitability rates. Now there has been the minimum profitability level set for theenterprise which recently causes the profitability of the enterprise to improve.From the point of view of business competition as the main driving force makeseach enterprise to supersede the other one, to acquire the recognition of consumers and toachieve faster implementation of the project offered and possibly at a higher price.The management of the enterprise needs to work more on the marketing issues andthe quality of the works to be performed, to establish permanent relationship with thebuilding contractors as a result of which it is possible to win the projects and to raise thelevel of profitability of the enterprise.By assessing the financial position of Enterprise N the following can be concluded: the main concern in the enterprise is the profitability level of projects forimplementation that has been particularly low in 2XX9; due to low profitability levels liquidity of the enterprise is low starting withthe second quarter of 2XX9; speaking about the turnover of assets and the working capital it can bementioned that the turnover is improving. If the enterprise is able to raiseadditional resources for ensuring regular liquidity levels, then the turnoverof total assets and current assets will be also increased;104