Annual Report

Research and analyze an annual report for a company of your choice, within your industry, and then write a report that provides a financial rationale and justification for a recent major strategic decision that they made using information taken solely from their financial reporting statements. What specific information can you find in your analysis of the report that makes this a wise investment from a financial point of view?

 

Sample Solution

Recently, Amazon announced the acquisition of Whole Foods for a reported $13.7 billion USD (Duchene, 2018). This major strategic decision was likely made as part of Amazon’s initiative to gain greater dominance in the retail industry and expand their presence in bricks-and-mortar stores (Vincent, 2017). Upon analysis of the company’s Annual Report (2017), there are several financial justifications that can be identified which may have played a role in this important decision.

Firstly, despite its rapid growth and rise to prominence over recent years, Amazon has faced criticism regarding its profit margins; gross profits were only 34% while operating income was relatively low at 4%. With the integration of Whole Foods into its portfolio, it is possible that these figures will increase significantly due to the fact that food products generally carry more margin than many other retail items (Verma & Sharma 2018). Additionally, Amazon are clearly making an effort to improve their customer experience with their Prime service by offering unique items from Whole Foods through it. Furthermore, this move could make them more competitive against retailers like Wal-Mart who have long held significant market share in both online and physical storefront retailing.

In conclusion, The acquisition of Whole Foods appears to be a wise strategic decision fromAmazon given not only potential improvements in overall profit margins but also because of its ability to help boost customer loyalty and strengthen their position within the highly competitive marketplace. Ultimately this should result in increased revenues and market share for Amazon as they continue grow as one world’s most influential digital companies.

Additionally, annulling/deprioritising execution evaluations to zero in on persistent and multi-source input, empowers administrators to give basic appraisals across the association’s pecking order. This approach can be met fluctuating responses in light of the social foundations of workers.

3.3.3 Lawful issues

Execution examinations are officially recorded in the representative’s document and can moderate suit risk. Independently, some HR experts are worried of a potential ascent in legitimate activities by representatives on the off chance that their association stops giving legitimacy pay increments in view of mathematical evaluations, which on a superficial level show up more unbiased than having no evaluations.

3.3.4 Prize decency

Execution examination handled and coming about rating is connected to procedural equity, as it gives the impression of an unmistakable and fair approach to connecting compensations to execution. Eliminating mathematical appraisals can make it hard to decide the new reason for remuneration. Cappelli and Tavis (2016) give a model where New York Life disposed of formal evaluations, and this brought about merit-pay increment to be shared inside and deciphered as execution scores. These prompted the issue of “shadow evaluations” and affected other HR choices, inciting the business to once again introduced proper examinations.

While certain associations have canceled/deprioritised execution evaluations, they have kept up with the exhibition related-pay model and searching for ways of deciding legitimacy pay increments by depending on criticism/subjective decisions by directors rather than a mathematical rating.

3.4 Circumstances FOR Annulling OR DEPRIORITISING

3.4.1 Organize input through compelling frameworks

To deal with the volume, assortment and recurrence of the input under the new methodology, the cycle should be regulated through successful frameworks. Especially as it assumes a greater part in deciding legitimacy pay increments and advancement. This ought to incorporate coordination with current HR frameworks as well as advancement of available versatile applications or online instruments that permit brief criticism conveyance. There is proof to propose that criticism is bound to be looked for electronically than face to face (Kluger and Adler, 1993).

To develop of the input ought to be basic, organized and revolved around objecti

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