Essay on Business Report on Alibaba
Name: Xiya Chen
Subject: Business & Management
This report is based on the business environment analysis to identify key factor for Alibaba. From ratio analysis, it is found that financial performance of Alibaba is decreased in last two years due to decline in profitability and management efficiency. It is also identified from PESTEL analysis that political, social and legal environment of China is supportive for Alibaba, but there are some emerging challenges in economic environment. From SWOT, it is also found that are various opportunities and threats for Alibaba in the existing business environment. In the end, it is observed that global expansion can be effective …show more content…
As per above results, both current and quick ratios of Alibaba increased in year 2015 compared to 2014. The positive change in liquidity ratios indicates improvement in company’s ability of managing short-term financial obligation timely. But at the same time, it is also identified from above table that both profit margins as well as return on equity of the company declined in this period. It shows decline in the profitability of Alibaba from fiscal year 2014 to 2015 (Brown, 2013).
Along with this, it is also determined that company is also experienced negative change in its asset turnover, which indicates decline in its ability of utilizing available assets effectively in generating sales. According to results, receivables period is increased from 1 to 3 days, while payables period is decreased from 82 to 40 days that is contributed to create adverse impact on company’s liquidity position (Harris & Mongiello, 2012). From ratio analysis, overall it can be interpreted that financial performance of Alibaba is declined in year 2015 compared to 2014.
4.0Macro and Micro Environment Analysis
There are several internal and external factors that have influenced performance of Alibaba. PESTEL, Porter’s five forces and SWOT frameworks are used to identify and analyze these factors.
4.1 PESTLE Analysis
Political Factors: The current political environment of China