Financial analysis Case Study Example | Topics and Well Written Essays - 500 words

Financial analysis - Case Study Example However, the fall in sales is attributed to operation expenses such as administration, general and sales expenditures. The scale of operations needed to execute the services and product manufacturing of the new venture is larger than when the company had not acquired Exterran Holdings (Haunschild, 570). The Gross Profit in 2013 was $963,006. However, the forecasts in 2014 indicate that there is a fall in gross profit. Despite the fact that this value is lower than 2013 reports, the figure gradually increases in 2015 and 2016 financial years. By 2016, the gross profit, after the acquisition of the new business, will be $195,865; a reflection of 19.6% increase from 2014. Forecasts in the growth of gross profit in 2015 record an increase by 9.4% from the values reported in 2014. From the percentage growth in gross profits, it is evident that in every financial year, the business’s gross profits, after acquiring Exterran Holdings Inc., doubles. Total operating expenses before the company acquired the new business decreased from 2010 ($888,015), 2012 ($864,909), and 2013($714,315). The decrease in the values of total operating expenses means that the company had acclimatized to the business conditions after establishing its niche in the new market. Consequently, the significant rise in operating expenses from the forecasts in 2014 ($121,434), through 2015 ($132,825) to 2016 ($145,284) indicate the business has not adapted to the new market conditions and challenges because of its wide operational needs. Acquiring the new business will also realize a significant growth in earnings before taxes and interests. The year 2011 and 2011 reported losses of $193,818 and $80,133 respectively. Because the business had just began, the challenges in the market and operating environments contributed to the loses in earnings. The forecasts in 2014 financial year records a fall in earnings before taxes and