Limitations and Assumptions
This report has been prepared to analyze the monetary position as well as execution of Cabcharge. This reports is totally depend over the financial reports of the company from 2013 to 2016, director’s report, relevant statements of key executives in annual report and the information of industry. As the proper report format has been considered, firstly, it depict about the Cabcharge’s overview, its establishment, its connection with cab industry in Australia and the competitive companies. Further, investigation has been done over the reports of the company for analyzing the figures and offers a conclusion to the users.
- Not all the information has been collected about the competitors of 5 years.
- Organization’s last 5 year information has not been found
- Analyzed data is not descriptive in nature.
Cabcharge Australia limited is a public company in Australia. This company has been found in 1976. This company has developed a system to pay the taxi fares n non cash means. Today this company is the sole provider of all in-taxi services (Cabcharge, 2017). ComfortDelGro is a joint company of Cabcharge as 49% of share of the company has been bought by cabcharge. It offers its business in Australian market and has registered itself in Australian stock exchange.
PEST analysis stands for political, environmental, social and technical analysis of a company. Cabcharge’s situation analysis is as follows:
Many political factors have affected the cab industry of Australia. The new policies, contribution of government in cab industry made many significant changes in it. Government has helped this industry to grow up for making the transport quite easy for locals as well as tourists (Best, 2009)
The economy of Australia is quite strong with per capital GDP. According to a current research, the unemployment rate of nation is lowest in the world i.e. 4.4%. This is impacting directly on Cabcharge and thus the growth rate of Cabcharge is also impressive.
Social analysis over cab industry depict that it is one of the common way for the people to move themselves from one place to another. The social factor of this industry is vital and significant (best, 2009). It has numerous social advantages as it provides the employment to the people, help them in their social life or so.
Technological analysis over cab industry in Australia and depict a great technical infrastructure of the industry. It consists of satellite system, applications, fiber optic network, and wireless network. The technology of Australia is quite compatible. This helps the industry to grow rapidly (Peter & Donnelly, 2011).
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Parent Company |
Cabcharge |
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Category |
Service provider for taxi |
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Sector |
Transport and logistic |
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STP |
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Segment |
Local and tourist people who mobile to one to another place |
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Target Group |
People who need cab promptly |
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Positioning |
Take a use of technology to bring higher customer experience ( Hollensen, 2015) |
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SWOT analysis |
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Strengths |
1. Huge customer base 2. Joint venture with ComfortDelgro 3. Top of mind services 4. Acquisition of ComfortDelgro 5. Rapid expansion 6. Network affect is increasing day by day 7. Online monetization is difficult 8. application |
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Weakness |
1. Drivers are not well educated 2. Drivers misbehavior affect the brand image 3. Monetization is difficult |
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Opportunity |
1. Potential is high 2. Increment in internet penetration 3. Acquisition of little players 4. Rising disposable income 5. Can create huge demand |
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Threats |
1. Presence of many players 2. Rising competition 3. Clear government regulations are not there 4. customer loyalty is less ( Doyle & Stern, 2006) |
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Competition |
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Competitors |
1. Uber Cabs |
The major competition of Cabcharge is with Uber cabs in Australia. Cabcharge has only fear with Uber cabs as the market capitalization of Uber is growing day by day. Current reports of the company depicts that the revenue of the company has been decrease and the market share of the company has been acquired by Uber (Kotler & Keller, 2006). Uber has diversified its operations in many countries and services provided by the Uber are more competitive than Cabcharge. Cabcharge has booked a net profit of $25.6 which is a crash of 45% it depict that the performance of the company is not well and investors are also not happy with it.
Company Overview
Ratio Analysis:
Liquidity ratio:
Cabcharge limited looked overcapitalized in 2016. In face it has been examined that from several years company is facing the same issue. The current assets of the company is increasing day by day in comparison of current liabilities of the company, it could be seen in the final reports of the company of last 5 years. The annual report of the cabcharge shows that the current assets of the company have been decreased from last year but the changes are lesser than last year %. In 2016, the current assets of the company has been decreased from -0.049 whereas in 2015 the changes were -0.11. The current liabilities of the company are increasing day by day, earlier -0.09 has been examined and in 2016, it was 0.125. This depict that the current assets of the company is decreasing but on a small level from last year whereas the current liabilities of the company is also decreasing but with a great level.
Due to it, the current ratio of the company gets affected. As showed in appendix, the current ratio of the company in 2012, 2013, 2014, 2015 and 2016 is 1.28, 2.60, 2.56, 2.52 and 2.74 (Morningstar, 2017). It depicts that the company is taking the use of more assets to meet its short term obligation. Company could reduce the current assets to manage the capital of the company and reduce the extra expenses of the company.
Annual report of the company also depict that the inventory has been reduced in 2016. The % changes in inventory are -0.75% in 2016 and 0.33% in 2015. It depict that company has reduced its current inventory to manage the capital. From the ratio analysis table (Appendix) it has been found that the quick ratio of the company has also increased in 2016 due to fewer inventories from 2015. The quick ratio of the company in 2012, 2013, 2014, 2015 and 2016 is 1.26, 2.54, 2.5, 2.425 and 2.71.It depicts that the company is taking the use of more assets to meet its short term obligation.
Annual report of the company also depict about the total cash of the company in last 5 years. It has been examined from the reports that the cash is decreasing day by day in the company. -0.45% changes has been recognized in 2016 in balance sheet of the company. Thus the cash ratio of the company has been decreased in 2016. The cash ratio of the company in 2012, 2013, 2014, 2015 and 2016 is 0.44, 0.86, 0.95, 0.6 and 0.37 (Morningstar, 2017). It depict that the cash of the company has been decreased in comparison of total current liabilities of the company.
Situation Analysis
Profitability ratios of the CAB depict about the profits earned by the company in a fiscal year. In this report 5 years data has been analyzed to get the profitability condition of Cabcharge. In the annual report of the company, the balance sheet and income statement of the company has been analyzed to identify the profitability strength and position of the organization.
It has been found in balance sheet of the company that the total profit of the company has been decreased in 2016 as compare to 2015. The changes in 2016 in profit has been examined and a -0.44% changes has been depicted. The share equity of the company has been decreased in 2016 by -0.01018. In 2015 the total equity was AUD 393 million which has been AUD 389 million in 2016 (Morningstar, 2017). The equity of the company has been decreased due to less interest of investors in the company. The EBIT of the company has also examined and it has been found that the EBIT of the company is also decreasing. In last years the EBIT of the company was 84, 87, 81, 68 and 28. It depict that in 2016 the EBIT of the company was on lowest in last 5 years. The EBIT was just 16.57% of total sales in 2016.
The total assets of the company have been examined and it has been found that the total asset of the company in last 5 years was 531, 557, 560, 573 and 521. It has been found that in 2016, company has experienced a loss in total assets which was lowest in last 4 years. The total changes in the total assets of the company are -0.047 in 2017. The gross profit of the company has been enhanced in 2015 (Morningstar, 2017). Company has experienced a .21% growth in 2016 in gross profit. Sales of the company are decreasing due to the competition in the market. And the total expense of the company has enhanced in 2016.
These all changes made an impact over the profitability of the company. Thus the profitability ratios of the company get also change. They depict the position of the company briefly.
Efficiency ratio depict the efficiency of the business functioning and operations of the company. These ratios has been calculated to examine the assets, account receivable, accounts payable, inventory, sales, purchase etc of the company. This depict the true picture of the business operations. A detailed study has been done over it to analyze the efficiency of the company.
PEST Analysis
The efficiency ratio depict briefly about the entire above discussed element. The asset turnover ratio has depict that in 2012, 2013, 2014, 2015 and 2016 is .69, .35, .32, .31 and .31. It depict that the sales and assets has not been changed more in comparison to each other. The other ratios of this category also depict that many changes has been done by the company in its operations which has been recorded in its annual report in terms of sales, total assets, purchase, debtors and creditors (Morningstar, 2017).
Capital structure of a company depict about the debt and equity of a company and its relation with each other as well as with assets. The debt to equity ratio depict about the total liabilities of the company in compare with total equity. It has been lesser than last year as the company is reducing the debts in 2016 and thinking to raise more friends through internal sources and equity only (Morningstar, 2017). Debt ratio depict about total liabilities and total assets. This ratio explains the better condition of the company. It depict that company has manager its total assets in compare of total liabilities.
Equity ratio of the company depict about the total equity and total assets. This ratio explains that the total equity has been raised from last year in compare with total assets of the company.
Conclusion:
Thus through analyzing the overall condition of Cabcharge, it could be said that the company is facing many issues currently. The market share of the company has been very low due to competition in the market. It has been analyzed that the market is quite potential if some good marketing strategy is used by the company than it could easily grab more market share and thus the value of the company would increase.
The marketing analysis of the company depicts a good future of the company only if some good steps would be taken by the company. The financial analysis over the company depict that the revenue of the company has been decreased in 2016. The operations and business functioning of the company has also been reduced and the strategy of the company is not working. Thus it could be said that the company is not performing well currently.
References:
Best, R. J. (2009). Market-based management: Strategies for growing customer value and profitability.
Cabcharge. (2017). Home. Retrieved from https://www.cabcharge.com.au/. Accessed on 8 may 2017
Doyle, P., & Stern, P. (2006). Marketing management and strategy. Pearson Education.
Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.
Kotler, P., & Keller, K. L. (2006). Marketing management 12e. New Jersey.
Morningstar. (2017). Cabcharge. Online. Retrieved from https://financials.morningstar.com/balance-sheet/bs.html?t=CAB®ion=aus&culture=en-US. Accessed on 8 may 2017
Peter, J. P., & Donnelly, J. H. (2011). Marketing management: knowledge and skills: text, analysis, cases, plans. Plano: Business pub., INC.
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