Financial Statement Analysis: Regina Exhibition Association Limited                                                                Case Solution


The Regina Exhibition company also known as the Evaraz place is in the business of providing different things to the society such as it provides car parking services, place for meeting to the corporate clients, exhibition place, catering services, lounges and souvenirs.

Evaraz is a 102 acres facility providing different facilities to the customers such as sports area including hockey cricket and other sports. The company also provides convention centre, event arena, exhibition hall, meeting area and a parking arena.
The company has a good financial position as well as the company is generating huge profit. The company is generating huge revenue  while it is operating its business efficiently in order to generate a high profit. Moreover, the profitability is also high because of low expenditures and effective operations.

The company is having heavy amount of expenditures in cost of goods sold, overhead expenses and direct expense, although the company is operating its operations quite smartly and making a very high profit, however the company is the 2nd largest meeting and exhibition facility in Canada.

Problem Statement

The company is working well in the present situation and making handsome profits however,there are still some problems which are still unaddressed. It has been seen that the company is fully utilizing its maximum capacity and also it is using its potential resources while some resources are still under utilizing which have been identified by the CEO.

The under-utilized resources include a newly established building, which was constructed for the expansion of the meeting arena.The building is under-utilized because of the scheduling errors and lack of proper management.

This paper will attempt to answer the question regarding how much revenue and profit will be increased by the maximum utilization of this building.Also the CEO is asking to increase the profits by 6%,10% and 15% in the year 2015 (present year). This paper will also guide the reader that what effects will be done to the revenue in order to increase the profits as per the CEO’s requirement.

We will also try to analyze that what impact will be made on other financial aspects regarding the cost in order to increase the profit and for the potential utilization of that building. However, we will also analyze the changes that will be made to the cost structure in pursuit of the increased profits.

Current Financial Situation

Under this section, we will go through a deep analysis of the current financial position of the company by its present income statement and its common percentages, however all the calculations are in present in the excel spread sheet. For more convenience we will also include appendices in the last of this paper for better understanding.

Under the current situation, we can clearly see that the company’s revenue in the present year is almost $1.8 million, which has increased from 985,000 in the first year.Also,the COGS is just 7% of the revenue, which is very low and leading the firm to increased gross profits, however it was also the same in the first year and decreased slightly to 5.8% in the second year of analysis which is 2014.

Moreover, the company is losing a huge amount of its revenue in direct and overhead expenses; while the indirect expenses are quite low, which are less than 1% of the revenue.

If we take a look towards direct expenses, then it could be seen that they are showing almost 23% of the revenue which is quite high as compared to COGS.Moreover, the overhead expenses are also high showing 1.26% of the revenue......................

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