Fourth quarter is an important period of the business year. It is a time to wind up and reflect on the performance of the financial year. Companies slow down their activities to perform a careful and detailed analysis of all the activities of the past year. A detailed report is prepared, outlining all the facts and figures of this analysis. This report gives an overview of the market conditions and performance of the company.
Software industries in the USA are one of the most prominent sectors of growth in the economy. In the past few decades, the IT boom has put them in a position of advantage for generation of capital. Market analysis is especially important from two perspectives: one, for the companies themselves to track their growth and the other is to study trends derived by economists and stock traders.
A market report is prepared after a detailed overview of many sections within an organization. It covers a lot of aspects such as revenue, taxes, marketing, profits etc. Its main objective is to get an idea of the company’s performance and the profit/loss incurred throughout the year. Moreover, areas that need improvement or cost-cutting can be identified.
Market reports cover a range of factors. Diluted Earnings per Share (EPS), net income, pre-tax income, gross profit margin and revenue are some of the results derived from an acute analysis. Studying these results gives an idea of the performance. Based on these observations, planning for the next year is done in the fourth quarter itself. Areas of improvement are identified. In addition to this, distribution of resources within the departments for the next year is also decided.
In software companies, various aspects of the business are considered. Primarily, finances and performance of the products is considered. Apart from software, peripheral services are also provided by the companies which are a source of income generation. Hardware is also accounted for. These are factors from product perspective which also includes monitoring research and development. From the business point of view, sales and marketing is considered. Due to intense competition, much attention needs to be given to these areas and companies often have large budgets for the same. Based on the performance of the product and previous marketing strategies, figures from the report indicate their success or failure. Subsequently, the strategy is restructured and new resources are allocated.
The gross profit and previous tally of expenses enables the company to plan for expansion in the future. The report also covers acquisitions and redevelopment activities. Fourth quarter market reports of other leading software industries are a good source for comparative study. Another important factor considered in the reports is organization of data according to geographic region. This gives a clear idea of the reach of the product/company and where improvements need to be done.