Financial statement analysis facilitates the financial managers to make the decision regarding investment and therefore financial statement analysis is to be found as one of the most crucial of financial management. In this context, it is to mention that the financial statement analysis considers the ratios to identify the trends of the financial positions of a company. Therefore, the researcher shall consider ratio analysis for identifying the trend of the performance of the company. In the initial part of the study, the researcher shall consider the business and strategic analysis of IRESS limited- Melbourne. In this part, the researcher shall consider the industry analysis, economic analysis and the analysis of the performance of the competitors of the company. After this part, the researcher shall analyze the accounting analysis and the financial analysis to identify the trends of the ratios and the reasons for changes in the performance of the company. In the next part of the study, the researcher shall make discussion on the sales growth rate and the asset quality of the company to make the comparison with the competitive firms. In addition to that, the researcher shall make the recommendation on the basis of the strategic analysis, financial analysis, and the prospective analysis.
In Australia, the software industry is to be considered as one of the most emerging industries and this industry creates the most employment in the country after the banking industry . As this industry enhances the employability in the country, the government encourages the industry owners by providing the subsidy to the companies of this industry. Therefore, the company could avail the subsidy from the government in future. On the other hand, the researcher is to mention that the software industry in Australia earns foreign income and therefore this industry contributes 21% of the total GDP of the country.
On the other hand, the researcher is to mention that the intellectual property in Australia is generated by the engineering universities in the country (). As the country has an immense source of intellectual properties from the internal and external sources, the company could get the advantage of skilled employees for the business operation. The software industry relies on the advancement of the technologies and Australia is to be considered as technologically advanced as per as the software technology is concerned . In this context, it is to mention that students from all around the globe come to Australia for the job opportunity and therefore the company could get the internationally approved technological support.
Identification of the industry
IRESS limited involved in selling the software services in the internal market as well as in the external market. Therefore, the researcher is to mention that the company is in the software industry in Australia. In this context, the researcher is to mention that the company has earned the highest revenue in 2015 and 2016 among the Australian software companies. In this context, the researcher is to mention that the market share of the company in the stock market is the second highest after XERO. As per as the international business is concerned, the researcher is to mention that the company has made third highest foreign revenue among the software companies in the country.
Competitors of the company
While making discussion on the competitors of IRESS limited, the researcher is mention that MYOB holding limited has earned the highest operating revenue in the industry since 2011, and therefore this company is required to be considered as the most impactful competitor of IRESS limited.
Competitive positioning analysis through Porter’s five forces model:
Bargaining power of supplier:
The company purchases software related products from foreign countries, which includes China, Japan, the United States, and India. Moreover, it is also to mention that the competitors of the company including MYOB holding limited purchases raw materials from the USA and China. Bargaining in the international business relies upon the treaties that a company makes with other companies, and therefore, the issue of bargaining with the suppliers is a macroeconomic issue. Therefore, this factor could not affect the strategic decision making of the company.
Healy, P.M. and Palepu, K.G., (2012). Business analysis valuation: Using financial statements. Cengage Learning.
Butler, J.R., Wong, G.Y., Metcalfe, D.J., Honzák, M., Pert, P.L., Rao, N., van Grieken, M.E., Lawson, T., Bruce, C., Kroon, F.J. and Brodie, J.E., (2013). An analysis of trade-offs between multiple ecosystem services and stakeholders linked to land use and water quality management in the Great Barrier Reef, Australia. Agriculture, Ecosystems & Environment, 180, pp.176-191.
Shahbaz, M., Khan, S. and Tahir, M.I., (2013). The dynamic links between energy consumption, economic growth, financial development and trade in China: fresh evidence from multivariate framework analysis. Energy economics, 40, pp.8-21.
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