Free «The Role of the Financial Manager» Essay
Financial analysis is a very important tool for business evaluation, which has been employed by almost every business organization. This is because most of the business entity’s motive is to make profits and hence maximize the shareholders’ wealth. However, before any business can have positive financial returns, there has to be proper management of all the business departments. Also, the businesses should take care of their stakeholders such as the customers in order to maintain a good relationship. Therefore, this paper addresses the financial analysis of the Constant Contact Inc., its operations and success factors as well as its managerial positions.
According to Holden (2007), Constant Contact Inc., formerly known as Roving Software was founded in 1995, but then it began operating in 1998. The company’s name was changed in 2004. It became a public company in the year 2007. Its headquarters is in Waltham, Massachusetts but with regional officers in San Francisco, Loveland in Colorado, and Delray Beach in Florida. It offers online marketing services to both the profit and non-profit making organizations. These services include the email marketing, social media marketing, online survey, and event marketing tools advisory services.
The company deals with its stakeholders in a special way. It is not only interested in maximizing the shareholders’ wealth or assisting its customers, but it also helps other small businesses to achieve their best. For instance, it authored a book Engagement Marketing (TM), which highlights the strategies for creating strong customer relationships. A part from that it also allows other businesses around the world to apply its marketing tools (Holden, 2007).
Holden (2007) further notes that the company stands a better chance of succeeding in the future since it offers quality services and has formed customer retention strategies. This is evident from its commitment towards fighting the email spam by other organizations. Moreover, it has invested in educating its customers on the best email practices.
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In the second quarter of the year 2012, which the company also marked with a transformation from a single product provider to an engagement suite provider, the company noted some financial improvements. The company realized revenue of 62.1 million dollars, which was an increase of 18% as compared to the second quarter of the year 2011 when the company had realized 52.5 million. The GAAP net loss gap also reduced to 500 thousand dollars from the 1.3 million of the 2011’s second quarter. Additionally, the GAAP net loss per share, which was 0.04 in the 2011 second quarter, reduced to 0.02 in the 2012 second quarter (Business Wire, 2012).
Business Wire (2012) further notes that the adjusted EBITDA margin in the year 2012 second quarter was 13.0% as compared to the 2011’s second quarter when it was 15.3%. Again it is noted that the net cash flow from the company’s operations was 5.2 million, while in the second quarter of 2011, it was 8.4 million. Finally, it is noted that its gross margin for the 2012’s second quarter was 70.3% while the one for the 2011’s second quarter was 71.0.
According to Goetzl (2010), this company’s stocks are listed in the NASDAQ stock exchange market and in the past 12 month rate of return on equity was 14.84%. While the recent share price is 18.22 dollars. Constant Contact is managed by a team of leaders which include the CEO, who is also the chairman and the president of the company, the various vice presidents who represent different departments, and the Chief Financial Officer who is in charge of all the financial resources of the company.
The current company’s CEO is Mr. Gail Goodman, who has been in that position since the year 1999. Apart from his executive roles, he has also contributed a lot towards revolutionizing on how small businesses and organizations can effectively build good customer relationships. He has also led the company to acquire more than 500 000 customers from all over the globe. His most significant achievement is that he was also named the executive director of the year during the American 2009 business awards. He is assisted by Ellen Brezniak as the senior vice president of customer operations and Dave Gilbertson who is the vice president and the general manager of SaveLocal among many more vice presidents heading other departments. Additionally, the company’s financial affairs are also managed by the CFO Mr. Bob Nault, who took over after Steve Wasserman’ resignation in 2010 (Goetzl, 2010).
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In conclusion, Constant Contact Inc. has been very successful in its operations since it has a better approach in handling its customers and other stakeholders of the communication industry.