Marketing Metrics for Essex Property Trust Essay Example for Free

merchandise Metrics for Essex Property Trust EssayVia analyzing and discussing the interrelated monetary symmetrys over these three long time, the performance and developing trend of Essex Property Trust Inc. Will be mensural and understood. Moreover, this study illustrates what the two rivals BRE Properties and Brandywine Realty Trusts positioning were in property industry. 1. 3 methodology The companies official website has comprehensive information like histories and backgrounds of caller-up, internal and external environment that influencing line of work running, every peak of monetary data and even critical issues.Therefore, it is the most critical resource. In addition, there be opposite commitful methods such as academic reports, journal articles, books and electronic database that provide theoretical knowledges about each metric. 1. 4 Limitations However this report has some vital limitations because it is based on the financial statements which reflected his torical facts ar open to human accruals, error, interpretation and estimation like refunds accounts and depreciation accounts. In station to attract more than investors, the economic performance can be inflated by intentionally manipulating figures on inancial reports (Dennis, 2010). Furthermore, besides the financial factors in financial reports, other several elements including economic, social, and environment can also play an enterprises financial position.Thus, due to ignorance of other factors, the financial position disclosed by accountants whitethorn be inaccurate. Last still non the least, the financial statement only took quantitative factors into account but fails to disclose information like integrity of management, prestige and reputation of the business with public, customers satisfaction, employees commitment and efficiency, etc. hat also impacts business decision making (Dennis, 2010). 2. Real estate investment hope (REIT) Industry and companys historical ba ckground George M. Marcus as the existent estate entrepreneur make Essex Property Corporation in 1971 and after 23years the company became Essex Property Trust, Inc. when it gained the portfolio of 16 multifamily communities. Essex is a self-managed and self-administered integrated real estate investment trust (REIT) in West Coast of America.In 1960, REITs created by congress is a type of real estate firm that provides opportunities for all Americans to invest in income-producing real estate not just for affluent. The method of this investment is similar to the bonds and stocks investments through mutual funds by many Americans (REIT, 2012). Essex develops, manages and acquires multifamily residential properties in the specific provinces like the San Francisco, Southern California and the Seattle metropolitan area and Essex relates to land and its appreciation on it like offices, apartments and hotels.Essexs Property Portfolio so far Multi-family pic Office pic Retail other unclas sified pic specialisation unclassified pic According to the above table charts published by Essex in March of 2013, there are 166 communities comprising 29,506 apartment units and total approximately 315,900 square feet of four commercial buildings which are located in major(ip) regions of California and Washington under the property portfolio. Besides the existing markets, Essex intended to evaluate some impudently markets by identifying new areas and developing new unconsolidated joint venture projects. . Conceptual framework Marketing metric can be defined as a measuring framework which quantifies a dynamic, trend, or characteristic and also can be used by practitioners in trade monitoring and business planning to explain diagnose causes, phenomena, project the results of future events and share findings in order to justify marketing programs, decide on financial allocations and evaluate their marketing performance (Farris et al. 2010).Its more effective to use a portfolio of metrics because it can assist managers with maintenance of productive focus on markets and customers and identification of weaknesses and strengths in both execution and strategies (Bazley et al. 2004). pic There are seven specific metrics adapt to measure Essex companys performance and analyze competitors positions. According to the above figure, they are return on equity (ROE), earnings ahead Interest, Taxes, Depreciation and Amortization (EBITDA), year-on-year growth revenue, return on investment, arrive atability metrics, efficiency calculations and capital twist ratios.Gross profit margin, net profit margin and cash flow to sales ratio are three critical basic figures that will be used to measure entitys profitability (Bazley et al. 2004). Then, in order to identify companys business efficiency, Return on asset and asset overthrow ratio will be numerated as well. Finally, there are three capital construction ratios including equity ratio, debt ratio and debt equity rati o(Mcdonald and Mouncey, 2009).The most vital reason to choose those metrics is that they can maximize the accuracy of measurement about an entitys heath and estimation on the basis of other data. Moreover, they are also interrelated to each other (Birt et al. 2010). 4. Marketing metrics Briefly, The critical purposes of using following exceptional metrics are judging business performance, evaluating plans, quantifying market opportunities, identifying leverage points for improvement for Essex and recognizing its peers threats for the past three years and predict the trend in near future(Farris et al. 010). 4. 1 Earnings sooner Interest, Taxes, Depreciation and Amortization (EBITDA) As an alternative for a cash-based profit measure, EBITDA can be also defined as the profit ahead interest, taxation and depreciation and amortization expense. Because it excludes financing and tax charge besides asset diminution, its main condition is to measure entitys raw operating earnings compare and analyze profitability between companies (Birt et al. 2010). Figures in US$ and 000 2010 2011 2012 Essex 277,861 338,679 456,888 BRE 228,219 255,066 306,542 Brandywine 370,880 379,556 383,484 Based on the above chart, it apparently illustrates that both of them tried to raise their EBITDA and therefore adjust their operating cost. Among them, Essex had the most dramatic increasing trend in EBITDA by changing amount of US$179,027,000 during three years. 4. 2 Profitability metrics Under this category, there are three basic metrics gross profit margin, net profit margin and cash flow to sales ratio to calculate entitys profit.Gross profit margin refers to the percentage of sales revenue that results in gross profit which measures profitability in selling, producing and buying goods before other expenses are taken into account (Birt et al. 2010). Higher time value means better likelihood of success to divide more satisfactory return to owners and cover more other expenses (Atri ll et al. 2008). Net profit margin reveals the proportion of sales revenue results in profit before interest and tax (Birt et al. 2010).This ratio is the most appropriate measure of profit from trading operations which is before took any costs of servicing long-term finance into account (Atrill et al. 2008). Cash flow to sales ratio reflects a proportion of cash flow from operating activities compared to its net sales revenue can be used to measure an entity ability to convert its sales into cash. Higher value means more expeditious productivity and creditworthiness and indicates the firm has more ability to grow (Business Dictionary, 2012).