Aristocratic leisure limited company is the Australia based company that deals in manufacturer of a Casino gaming system, and also provide international game technology. Aristocratic Leisure Company is the leader. The company gained 60 per cent share in the market to become the leader of the country. Aristocratic Leisure Company not only provides equipment to the company that deals with gaming system but also provide furniture and the major equipment to the other company also. The company also deals globally too as they support and supply the gaming system, and manufacture the furniture and equipment that is relevant to the casino based industry or gaming industry the country such as New Zealand, Japan, Europe and South American countries. They build a link between these country and supply material and equipment to them. The company is listed in the Australian stock exchange. In 2002 Aristocratic earn $976 million.
The company basic distribution or supply deals in the floor model type of equipment in the market. The company expanding its business and keep concentrate on producing large scale market by fulfilling the existing market demand and by structuring the future market for the company. The aristocratic leisure limited company will do all the above things by making strategies and forecasting and by implementing continuous improvement and by strategizing innovation.
Hence through this aristocratic leisure limited company will become the market leader and keep sustain this position by implementing the new and innovative strategies. Thus, they will taste the feeling of the market leader.
Aristocratic leisure limited company is the Australian based company that deals in manufacturing the gaming system for the casino and poker games and also develop and innovate the design time to time as according to the changes in the market and customer urging. Aristocratic leisure limited company is the market leader of a particular market. Aristocratic leisure limited company is the company that focuses on designing innovative gaming system that fascinates the audience and the customer and stimulate them to play it. Aristocratic leisure limited company becomes the leader of the market by sustaining 60 per cent market share. The company is also listed in Australia stock exchange.
Aristocratic leisure limited company not only provides a gaming system to the other company but also provide technical support too. The games that are virtually visible but also exist in actual version such as poker and casino game ranges are covered both digital as well as an existing market too. The customer usually plays this game for fun and for following their luck factor to earn money and pleasure by playing these games. The company diversified its market into different origins such as the diversification done as per the market structure and customer preferences. The company also provide furniture and gaming equipment with the innovative and exciting and attractive design model.
Hence, aristocratic leisure limited company as its name suggest the occupation of the company, the company have done proper branding as the person understand before buying the product, the company services and the product they deal in. The aristocratic company keep delivering their product overseas also as they building a link between the companies and also build collaboration that leads to increase the market value and the benefit of gaining trust from the shareholders and investors.
Thus, the company aims is to accomplish the present objective and building trust and simultaneously the company needs to focus on the planning and decision making to become the market leader and sustain that position in their upcoming years.
Business strategy analysis
The business strategy analysis is done with the help of porter fiver force models that reflect some point that helps to know the exact view and the strategy the is followed by the aristocratic leisure limited company is beneficial for firm growth or not. The company should aware of their competitor, customer, supplier and the substitute for their product so that they can make better arrangement and adjustment in their strategy to sustain that existing position and build their company position strong (Morden,2016).
Porter five force models are as follows:
(Sources: Aithal, 2016)
These are the five force model element that leads to analysing business strategy:
The entry of new substitute product:
The entry of the new substitute for the company product is the threat for the leading company as if the substitute will increase the threat will also increase on the company as it leads to diminishing the market share of the company. the company will face active competition with these substitute as the product quality differ but the efficiency that the company bring sis the same as in the case of the substitute product. So, because of this the substitute product entry will grab the customer that have less affordability power and lessen the chance of diverting this customer towards the company. Hence, to maintaining the flows and structuring the new customer is aware of the number of Substitute Company available in the market (Aithal, 2016).
The threat of competitor rivalry
The company faces various attack of competitor through their new innovative strategies and high range of product, the competition will be analysed by evaluating the market shareholder and the by the estimating and comparing the company balance sheet and their income statement with the competitor statement it will clear all the picture and convey the company about preparing their next step to be that impactful as it gives tough competition to the competitor or rival.
Number of suppliers
The company have to analysis their existing supplier so that they can make a choice between them and also analyse the supplier cost and the value that will adjust the sufficient profit for the year. The company should choose their supplier by tasting their material quality and quantity they offer in the reasonable cost range.
Buying power of customer
The company should make sure the buying power of the customer. Especially the company will make such a decision and considered these point if they thinking about expanding their market in the new region or originating new product. The company should analyse the customer demographically as well as by estimating existing customer.
The threat of new entry
Aristocratic leisure limited company should analyse the new entrant that can destroy their market. The company should focus on learning about new entrants keep analyse the market. So that they will easily save them from this kind of threat.
Hence are some analysis that may help aristocratic leisure company to analyse the market and make adjustment and changes according to the result they will gather after evaluating and formulating the above criteria and then make strategies according to it and focus on the threat areas that they will suffer if they will not take any initiative to take certain decision and policies to become stronger in the market and lead the country (Kabue, & Kilika, 2016).
Discussion about any accounting adjustment
Aristocratic leisure company keep focused on the accomplishment of the desired objective. The accomplishment will be done through various stages.
The company need to make the various report and formulization to gather the cost efficiency, the finance manager engages in comparison process so that for the future they can make a plan with least cost and with high benefit.
The various accounting adjustment has to be made to know the exact issue and performance that is carried out by the company experts and professional.
The company processes ratio analysis to let know the current flow, liquidity in the company, return on equity and also gather the net profit margin that has been reached in the particular year.
The accounting adjustment that the company essentially required to gather the equity information so that they can distribute the dividend effectively.
Another accounting adjustment that must be considered while preparing ratios is to make sure assets and liabilities are correctly calculated and all the information is reliable and valid till that year respect. So that they will cover all the ratios effectively and correctly and with valid transparency.
Hence, these are some accounting adjustment that should be considered by Aristocratic leisure limited company while comparing, calculating, classifying or while summarizing all the data that is gathered for the particular year or the particular period.
|Income statement for the three year|
|less: cost of revenue||($872.70)||($967.60)||($1,577.50)|
|Design and development cost||($239.20)||($268.40)||($413.60)|
|sales and marketing cost||($119.50)||($116.80)||($181.30)|
|general and administrative cost||($301.50)||($302.20)||($512.50)|
|profit before income tax expenses||($748.80)||($740.10)||($1,209.20)|
|income tax expenses||($156.70)||($233.00)||($220.50)|
|net profit after income tax||($592.10)||($507.10)||($988.70)|
|Balance sheet for the three year|
|Cash and Cash Equivalent||$283.20||$547.10||$428.10|
|Other Current Assets||$591.90||$647.90||$924.00|
|Property, Plant and Equipment||$217.50||$241.30||$389.30|
|Other non-current assets||$158.60||$168.90||$206.60|
|Current Payables and other liabilities||$434.90||$460.00||$821.10|
|Current tax liabilities and provisions||$114.30||$193.00||$196.40|
|Other non-current liabilities||$61.80||$81.10||$201.90|
|Cash flow statement|
|Net cash flow from operating activity||$680.50||$799.10||$933.80|
|Net cash flow from investing activity||-$209.30||-$236.50||-$2,207.60|
|Net cash inflow from financing activity||-$506.40||-$296.60||$1,135.20|
|1||net profit margin||Net Profit Before Tax||$507.20||0.238267487||$728.10||0.296723449||$867.60||0.239397368|
|3||Financial leverage||total assets||$2,987.70||2.777963738||$3,292.90||$2.45||$5,846.80||$3.37|
|DuPont analysis||net profit margin*asset turnover *financial leverage|
|value of firm = market value of common equity + market value of preferred equity + market value of debt + minority interest-cash and cash investments|
|value of equity = share price * shares outstanding|
|value of firm||3168.1|
|value of equity||$54,781.65|
Justification of Assumption
If Aristocratic Company follows the entire relevant element while studying and analysing the market they will gain growth in the market.
If the aristocratic company should focus on analysing new entrant, as it reflects the knowledge with regards to new company their product specialization and their impact on the company share.
The company will also do these analyses to distinct their market from the competitor market.
The company will also know their customer belief and trust factor for knowing the customer value towards the company.
Hence these are some assumption that leads to make changes in the company and result in the accomplishment of the objective, mission and vision of the company. Thus this will lead to the growth of the company.
The firm is earning a net profit in the year is $3.62bn as compare to the year 2017 it is higher that is $2.62bn that reflect that the company successfully maintained their revenue every year and stabilize the firm growth by implementing best strategies and gaining sufficient amount of output.
Hence it clears that Aristocratic leisure limited company keep doing business strategies analysis to keep sustain in the market by increasing in their revenue with increment to the shares in the market (William & Dobelman, 2017).
Comparison of the firm growth rate through comparison between the preceding three years profit and loss account:
In 2018 the company is earning higher profit as compared to their previous year net profit that is $867m.it showcase that the company is in the stable and following growth rate formulae to accomplish the objective to become the market as well as a global leader.
In comparison with the balance sheet of the company is well organized as compared to the previous year as it contains more positive balance than a negative balance.
The company performance is also improved as compared to previous performance scale.
The company revenue also increases as compared to previous year revenue that is $3624.1 that is in 2017is $2453.8 that showcase the massive hike in the current revenue.
The company cash flow statement is reflecting better result as compare to previous year cash flow statement.
Hence if the company lookout overall change it is favourable and great changes that occur during this year and the company also holds the opportunity to give a higher dividend to their shareholder and their partners. Aristocratic Leisure Company is enjoying immense growth rates and that will engage them to think upon to formulate better prospectus and plan to enjoy that sustainability again (Schroeder, et.al., 2019).
Company future pre-assumption regarding their growth rate
Aristocratic leisure limited company keeps focusing on becoming the market as well as a global gaming company that provides a variety of gaming system all over the world and the company basic vision is to expand its business globally.
The adjustment is being made to keep the objective in mind. Aristocratic leisure limited company keep changes their product ranges and keep producing the latest and upgraded games with the digital format as well as real word format too.
The keep adheres to design best and innovative game ranges with attractive packing and with the exciting format of the games. The technical team of aristocratic leisure limited company keep indulging themselves in achieving the desired objective by building the best version of their next gaming ranges. so that this will help the company to set up the product into a new market with an existing position as this will helps to grab market penetration and further, it will result in increasing the product sales and automatically will result in gaining high amount of profit.
The benefit of this entire will later share with their shareholder and this will increase the trust of the shareholders on the company and encourage them to put more investment and proposed more proposals and give the chance to take the opportunity to initiate the same.
Hence Aristocratic company focuses on sustainability in the position and development in the gaming system with fastest and innovative gaming product and to have customer belief and trust with affordable pricing with before earning sufficient amount of profit and also to increase the market value of the company (Stindt, et.al.,2017).
Conclusion about the value of the firm and value of equity
Aristocratic leisure company is enjoying better position in the market in the year 2018 as in this year their revenue is raised by 2.5 per cent that results in high profitability and with the essence of the good services and product deliverability they urge more customer trust result assigning leading position in the Australian market as well as they successfully publish themselves in the global market too. The value that aristocratic company opt in the global market is they grab 2.56 per cent of their market value there that leads them to expand their business in other countries too. The responses will give them the confidence to raise their market overseas too. The value of equity that they distribute in the year 2018 is contributing equity is $715.1 and the amount that put in reserve is $(23.5) and the retained earnings that the company $1040.9 and the total value of equity that has been arising after separating all these amounts is $1732.5. The equity value of the company is also rise as compare to previous year equity that is $1345.6 that means the company has been successfully increase their equity value in the market with means that they sustain their equity share in the domestic market as they listed themselves in the stock exchange of Australia that becomes the responsibility of the company to raise their market value to secure their funds in the stock exchange market and add up the value every year to gain valuable market share , bonus and also it will be secure as for future investment purpose . Hence, the company is raising its market value year by year and enjoying the leading position in the domestic market as well as in the global market.
Aithal, P. S. (2016). Study on ABCD analysis technique for business models, business strategies, operating concepts & business systems. International Journal in Management and Social Science, 4(1).
Aristocratic leisure limited (2019) about us [online] Aristocratic leisure limited available at https://www.referenceforbusiness.com/history2/99/Aristocrat-Leisure-Limited.html [access on 31 October 2019]
Aristocratic leisure limited (2019) annual report [online] Aristocratic leisure limited available at https://ir.aristocrat.com/static-files/8a63b725-9d18-403b-a6cb-ae3b6af43acc[access on 31 October 2019]
Kabue, L. W., & Kilika, J. M. (2016). Firm resources, core competencies and sustainable competitive advantage: An integrative theoretical framework. Journal of management and strategy, 7(1), 98-108.
Morden, T. (2016). Principles of strategic management. Routledge.
Schroeder, R. G., Clark, M. W., & Cathey, J. M. (2019). Financial accounting theory and analysis: text and cases. John Wiley & Sons.
Stindt, D., Quariguasi Frota Neto, J., Nuss, C., Dirr, M., Jakowczyk, M., Gibson, A., & Tuma, A. (2017). On the attractiveness of product recovery: The forces that shape reverse markets. Journal of Industrial Ecology, 21(4), 980-994.
Williams, E. E., & Dobelman, J. A. (2017). Financial statement analysis. World Scientific Book Chapters, 109-169.