Reef Adventure Business
Business report
Reef Adventures is a business that developed a package of cruising holidays on sailing ships around the Great Barrier Reef. In the establishment phase Reef Adventures concentrated on marketing these cruising holidays within Australia and New Zealand. As the business has grown steadily, the management has decided to market its product to potential customer, with a particular focus on Europe and the USA.
Initially, considerable funds were needed to acquire ships and other equipment. As a result, Reef Adventures is highly geared with a debt to equity ratio 3:1. Also, after each cruise, there is a need to carry out costly maintenance work on each vessel, with a result of heavy demands on the cash flow of then business. Overseas expansion will require the business to purchase additional ships.
The management of the business:
- Managing the problem of being highly geared
- Managing its cash flow problems
Executive summary
Reef Adventures Ltd is a company which sells a holiday packages of cruises on ships around the Great Barrier Reef and are also planning to expand their services from just Australia and New Zealand to Europe and the USA.
Recommendations
Financial objectives
• The financial objectives of a business are based on the goals of its strategic plan, which can be translated into both the short and long term objectives.
Short-term financial objectives are the tactical (one to two years) and operational (day-to-day) plans of a business. These would be reviewed regularly to see if targets are being met and if financial resources are being used to the best advantage to achieve the objectives. For example, if management has a goal to achieve a 15 per cent increase in profit for the next 10 years, the tactical plans might involve purchasing additional machinery, updating old equipment with new technologies, expanding into new markets and providing new services.
Long-term financial objectives are the strategic plans of a
Reef Adventures is a business that developed a package of cruising holidays on sailing ships around the Great Barrier Reef. In the establishment phase Reef Adventures concentrated on marketing these cruising holidays within Australia and New Zealand. As the business has grown steadily, the management has decided to market its product to potential customer, with a particular focus on Europe and the USA.
Initially, considerable funds were needed to acquire ships and other equipment. As a result, Reef Adventures is highly geared with a debt to equity ratio 3:1. Also, after each cruise, there is a need to carry out costly maintenance work on each vessel, with a result of heavy demands on the cash flow of then business. Overseas expansion will require the business to purchase additional ships.
The management of the business:
- Managing the problem of being highly geared
- Managing its cash flow problems
Executive summary
Reef Adventures Ltd is a company which sells a holiday packages of cruises on ships around the Great Barrier Reef and are also planning to expand their services from just Australia and New Zealand to Europe and the USA.
Recommendations
Financial objectives
• The financial objectives of a business are based on the goals of its strategic plan, which can be translated into both the short and long term objectives.
Short-term financial objectives are the tactical (one to two years) and operational (day-to-day) plans of a business. These would be reviewed regularly to see if targets are being met and if financial resources are being used to the best advantage to achieve the objectives. For example, if management has a goal to achieve a 15 per cent increase in profit for the next 10 years, the tactical plans might involve purchasing additional machinery, updating old equipment with new technologies, expanding into new markets and providing new services.
Long-term financial objectives are the strategic plans of a