Fabrica Company financial projection provided aims at attracting the potential investors into the organization. As the business operations are undertaken in Thailand, the region enjoys economic and political tranquility and as such its financial projects are usually met with ease. The imperative factor that enhances investors from different geographical region to invest in the business operations is the political and economic stability of a region. The stability in the foreign currency shows that inflation has been curtailed. The company’s exchange rate of 35Baht to 1 US dollar implies that the economy is enjoying relatively favorable foreign exchange rate.
Its currency is superior and it can easily dictate the economy. Thailand exchange rate policy has seen the country achieve its economic goals. This is attributed to the protectionists’ pressures that arose from the exchange rate policies that were initially undertaken; exchange rate that is appreciating with slight change in economic conditions, exchange rate level and the rigid exchange rate policy. These three accounts have been well endowed in Thailand economy enhancing its low rate of currency exchange with the US economy (Bernstein Leopold, 2000).
Many scholars have been arguing on the efficiency and accuracy of the exchange rate of Thailand as they perceive it to be either under valued or over valued, but the endowment of the country in terms of resources, and economic and political stability is a sure way of denoting that the exchange rate provided is accurate and stable. In determination of the investors interest in the company’s operations, financial analysis of Fabrica Ltd core financial instruments and tools will be done. The focus will be majorly on the profitability ratios.
The company’s gross profit margin has seen an increment since 1999. This is attributed to the diversification of operations in the company. In the year 2000 the gross profit margin was reported at 55.89%. This was achieved after tremendous increase in the sales revenue by approximately 7 million dollars. Such an increase in the sales revenue increased the expenses for the company thus reducing the overall net profit for the firm; reported net profit margin of 4.35%. In the subsequent years, the Gross profit margin for Fabrica increased as consumers were aware of the existence of the products.
Relying on this trend, the investors will be willing to invest in the company as its profitability increases rapidly (Alastair, 2000). In 2004, the financial reports show that the company reported gross profit margin of 81.39% and a net profit of 47.71% the highest value that the company has ever achieved. In the share market, the shares for the company have not been traded in the economy since the incorporation of the business entity. The company is not registered in the stock market and its shares have not been publicized.
This can be articulated to the need of maintaining stability in the business operations of the company. For instance, the 1987 stock market crash made many investors shun from investing in volatile investments like shares. The compulsory superannuation taken by the company aims at ensuring there is no repeat of the 1987 tragedy. Although no imminent measures has been taken by Fabrica Ltd to combat unnecessary changes in the stock prices, the increased online information has been seen to reduce volatility of shares in the economy (Helfert, 2004).