Financial Analysis & Contingency Plan

Financial Analysis & Contingency Plan
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Financial Analysis – 650 words
In 2003, Cervus Equipment reported revenues of $56 million and this had increased to $734 million 9 years later, and the profit grew at a faster pace than the profits (Doiron & Schryer, 2014). The growth in sales revenue was partly due to Cervus Equipment investing in dealerships, which diversified operations and allowed the company to be more competitive. The Canada-based company had grown and now operates in Australia and New Zealand and international expansion, partly explains the company’s revenue growth. In 2011 and 2012, there were higher revenues in the agricultural equipment operating segment compared to the construction and industrial equipment operating segment.
There was positive net cash flow from operating activities at $25, 849, 000 in 2012 and $18,951,000 in 2011 (Doiron & Schryer, 2014). There was an increasein business acquisitions in 2012 when compared to the previous financial when considering the financing activities there was advance from the debenture offering of $33,159,000 in 2012, but none in 2011 (Doiron & Schryer, 2014). This partly explains the net cash used in financing being negative in 2011 as there were cash outflows, while in 2012 there were also proceeds from repaying the debt. However, since the starting cash and cash equivalents were positive so too were the end year figures.
There has been steady growth in the Canadian equipment deliveries since in 2011 there were 2701 combines and 2899 in the year 2012 and this was a 7.3% growth where the combines were priced at between $ 250,000 and $ 400,000 (Doiron & Schryer, 2014). Similarly, there was a 2.2% rise in the sale of large tractors from, 4,226 to 4321 in 2015, and a small growth in the sale of 4 WD tractors at 1.6% from 1342 to 1364 (Doiron & Schryer, 2014). Increasingly, there are larger corporate farms that required larger equipment and frequent equipment replacement and this is an opportunity to sell large equipment.
The period 2003-2011 the compound annual growth rate was 31.7% and the pre-tax earnings per share was 15.1% and growth fell in 2009 partly because of the effects of the global financial crisis (Doiron & Schryer, 2014)....