**** APA Style ***** Financial SWOT analysis for attached case study in text citation and references minimum 600 words

Running head: BELOVED DOGS FINANCIAL AND NON- FINANCIAL ANALYSIS 1

Introduction 3

Non- Financial Analysis 4

Pet Grooming and Boarding in US 7

SWOT Analysis 8

Financial Analysis 10

Reccomendations 12

Calculations 13

References 21

Introduction

Finance is extensive but can be simplified as the management of wealth. It constitutes of activities such as; investments in stocks, borrowing from investor’s institutions by issuing bonds on behalf of a public company. In addition, it involves lending of monetary resources through issuing of mortgages and developing a forecast for a firm’s spending and revenue collection. Proper finance management enables a business to make quality decisions. By providing a basis by which a company matches its resources with the set budget thereby, enabling it to achieve its set goals and objectives. It takes into account various key criteria which involve financial and non-financial metrics of performance. (Brealey, A, Allen, F, Mohanty, P 2012).

The authors use various financial metrics as the crucial figures that you can focus on in financial statements. For instance, rates and spreads, return on investment, cash flows, net income, ratios such as current, liquidity, leverage and activity. Non-financial measures are quantitative metrics that cannot be expressed in monetary terms. They include Michael Porter’s five forces model of competition rivalry, brand preference to understand the position of your products in relation to competitor strategies, customer experience in order to determine customer retention and new consumer attraction, innovation, and market share.

The formal statement below targets at analyzing Beloved Dog Corporation by using various dimensions. It illustrates similarities and dissimilarities between pet grooming firms in Canada and the US. In addition, it shows whether the investment has been taken into consideration or not.

Non- Financial Analysis

This is the ability to determine investment success without necessarily involving analysis based on financial criteria.

Pet grooming in Canada

The pet grooming firm in Canada has consistently fetched a bigger percentage of consumers who pamper pets with premium services. Such as grooming, boarding, training, and dog-walking. It has taken into sight Michael Porter’s five forces as follows:

Intensity of competition

• With the pet market becoming more saturated and the level of competition hiking, operators have been pushed to compete more with each other through pricing, location of their venture and skills.

• Veterinarians and Pet stores have become rivals and they are offering grooming services as well as boarding services which are regarded as an extra source of revenue.

• Online platforms such as Rover.com and Dog Vacay.com are offering quality services to their clients at their homes.

• Recessions of the economy have rendered retailers such as Walmart start stock at-home grooming products that allow pet owners to groom their products.

• Companies with employees who possess a huge level of expertise and understanding of animal anatomy with have an upper hand in the competition.

• Increases in a number of pet ventures in 2018 have also led to an increase in the level of competition as there were 4,403 enterprises in the market.

Increased bargaining power of suppliers

• Pet groomers are only authorized to purchase bathing detergents such as soap and other cleansing substances manufactured in Canada.

• Pet boarding hotels are permitted to only purchase from the animal feed production in Canada.

Threats of new entrants

• The industry has a low barrier to entry of a new firm in the market as it has no protected patent rights, licenses, training requirements or even qualifications. More so, the home establishment is cheap.

• Due to increased demand from consumers in previous years have contributed to powerful growth in the number of operators in the industry in the last five years. On the basis of IBISWorld, it estimated that the industry value added (IVA) which measures the ventures contributions to the overall economy will grow at an annualized percentage of 6.6%. During this similar 10-year period, Canadian GDP has an expectation to grow at an annual rate of 1.9%.

Threats of substitutes

• The emergence of rapidly growing online marketing platforms, for example, Dogvacay.com have contributed to people opting to offer pet boarding and other services at the comfort of their homes which could earn extra income to the industry. This has also led to the growth of sole proprietorship ventures which overtake the activities of the industry.

• Consumers with a low purchasing power more often, opt to select at-home products in order to groom their pets on their own.

Bargaining power of consumers

• Consumers have the freedom to choose their pet groomers, trainers and borders that have closer access to the consumer rather than the industry.

• Although the economic recession improved later, the majority of the consumers still adopted to these at-home grooming products during the recessionary period and have opted to groom their own pets.

• With more employment opportunities and higher payouts, more consumers will be in a position to lead their own lifestyle resulting in accelerated household power, thereby, raising the demand for pets in particular.

Customer retention

This is done by taking into account all the major instances at which the customer interacts with your products.

• For instance, the Canadian firm has witnessed a good percentage of pet ownership taking place and has raised expectations of it rising to an annual rate of 0.9% over the next five years.

• Most customers are allowing pets to be a part of their families and they also tend to purchase a large number of pets.

The above points can be used as an indicator to determine the points at which the industry consumers are acting upon with the firm thereby, the enterprise can employ these tactics to determine the potential of customer attraction and retention.

Pet Grooming and Boarding in the US

The pet grooming and boarding have closely doubled over the past few years. The reason for the increase in demand was caused by an increase in disposable income from consumers and also a change in their attitudes regarding pets. This changed their mode of spending behavior and they tended to purchase more. Within those five years, the company has witnessed an annual rise at a rate of 6.8% to $8.2billion. This consistent gain in revenue contributed to a rise of 1.7% in 2018 alone.

Increased demand for cats and dogs has led to firm facilitators to increase significantly mainly because of the low entry barriers and government regulations in terms of licensing and regulations regarding pet and animals. IBISWorld report says they are anticipating an increase in the number of industries to an annual rate of 5.1% to 115,691 enterprises.

This growth in a number of firms has made competition to intensify rapidly. As a result, marketing and purchasing cost will hike up as marketers are trying to outstand from their competitors and pushing themselves to offer more to their customers. It also interprets that employment will be enabled. Actually, IBISWorld is expecting it to shoot to a percentage of 6.7% to 211,288 people translating to an increase in wages. The company has intentions to expand. According to IBISWorld, the total number of entities will increase to 3.5% to 137,632 enterprises.

Operators are experiencing competition externally from stores like Walmart and PetSmart who are also offering pet testing and grooming services during the recession period have gained trust from pet owners. In addition, online platforms like DogVacay.com and non-employers who need to provide more professional personal services for their pets are posing a threat to the industry as they are offering services like training and pet play time at boarding centers to customers and keeping track of reviews and feedback from those who use their website.

IBISWorld has discovered some key success factors that are favoring The Beloved Dog Company to continue generating profits despite the current threats. Such factors are as follows. Firstly, the business close proximity to its market is a boost as they are located close to households. Employment of quality grooming and other pet care services ensures repeated visits by customer and spread of good word of mouth. Finally, the availability of multi-skilled and flexible task force which have the capability of providing a variety of duties and services.

SWOT Analysis

Strengths

Beloved dog venture has consistently shown various points of strengths that will contribute to its succeeding as illustrated below:

• The firm has a conducive location that is strategic to its consumers. The facility is centrally located in an area with high-rise apartment towers and more under construction and still more planning stages.

• The entity has complied with all legal, environmental and political requirements. There is a lease for the approximation of 4500 of building and also an addition of 400 of fenced outdoor with accompanied ample parking space.

• It is equipped with a well-trained and professional staff team that includes veterinarians and animal specialists who are trusted by the members of society.

• Well established customer base as it offers luxurious services which attract the high-end individuals of the society who remain loyal to the firm. They offer personalized care including day care, overnight boarding, and dog washing and coaching as well as pet taxi services to pet owners when they are away.

• Over the past years, the Beloved Dog has enjoyed a solid relationship with the local community and it's having a competitive advantage from stable profits.

Weaknesses

• The family management has hindered the current owner from working full time in the entity for the history of 18 months or so. As the owner continued to draw a salary but also had to hire employees to carry out tasks, payroll costs have increased drastically although the venture is still running at a profit.

Opportunities

• Increasing the range of products they offer to their customers this will enhance the meeting of customer needs thus retaining them.

• Consistency and intensive advertising to the new, under construction and local apartment building, will enable the creation of awareness and also a reminder that the Beloved Dog is on the run.

Threats

• The upcoming competition from the rising of online platforms such as Dogvacay.com is a problem that may lead the business loss.

Financial Analysis

This includes the analysis of all the financial criteria that are prepared in order to draw a conclusion if the investment gave birth to success or not. Actually, this metric is done on the basis of three cases which are real, worst and best cases. They are assumed to give a complete and a comprehensive appearance of not only the prevailing situation but also future prediction of circumstances. As a result, the financial solutions concluded as done on the basis of value calculation from all these cases.

The main bases that are taken into consideration are the average accounting return (AAR) and Net revenue of the cat corporation. Noticeably, the firm does not have liability and some ratios are maintained as an error. Majority of expenses are classified as fixed such as permits of the business, licenses, depreciation and management expenses which were forecasted on the base of the data given.

Absolute case

At this instance, an increase in bank charges, credit card fees, payrolls and utility bills were taken into consideration. Have in mind that the NPV, IRR, and AAR achieved are -43,361. 21 CAD, 6.78% and $0.48 respectively. The revenue will be having 2.6% growth based on industrial growth.

Relative Case

The predictions are similar to the worst case, the revenue increased at a rate of 2.6%. Other costs such as bank service charges, rent and utilities will face growth while payroll would decrease. Moreover, the three ratios of revenue, net income, and EBITDA of cat lovers are calculated as 0.9808, 5.237 and 3.4866 which are used in benchmarking the calculation of Beloved Dog.

Ideal Case

At this, the situation is dependent on increasing the advertisement and promotion costs impact that it will have on the revenue. In 2018, the promotion and advertising expenses faced a rate of 500%. Then in 2019, it will decrease to 50% and then 10%. Consequently, the impact of revenue would rise by 6% in the end.

Rent would remain fixed as according to estimation it shows that the place will be leased for five years and not a single year. The NPV and AAR are 70672.73 CAD AND 48.8% respectively. The profit index would be 17% and payback and discounted payback would be 2.22 and 3.87 years.

Recommendation

According to the data analyzed, it is advisable to make a decision to invest in this business due to its consistency and stability of profits which are generated after five years. Conducive political, economic. Social and technological surroundings act as a key to determine business ability to yield good returns, thereby, proving this business venture profitable to invest resources in and it is promising to give good returns at all circumstances.

In spite of the many benefits, it’s also advisable to take into account the limiting factors such as outdated technology which is yet to be improved, expansion of dogs training should be expanded and the demand given a higher priority. Also, developing the firm market enables it to increase its market share thus giving it a sustainable competitive advantage.

Cat lovers

Ratio Analysis

Net income + Depreciation

Payback Period

Discounted Payback

AAR

Calculations File

X- axis(Year)

Y-axis (Millions)

References

Brealey. RA. Myers, SC. Allen, F. Mohanty, P 2012, Hill Education, Tam Mc Graw.