Marketing Metrics for Essex Property Trust Essay

Via analyzing and discussing the interrelated pecuniary ratios over these three years, the performance and developing campaign of Essex Property Trust Inc. Will be measured 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 accents of community, ingrained and external environment that influencing lineage running, every detail of financial data and even critical issues.Therefore, it is the some critical resource. In addition, there are early(a) useful methods such as academic treats, journal articles, books and electronic database that provide theoretical knowledges about each metric. 1. 4 Limitations However this report has some decisive limitations because it is based on the financial statements which reflected historical facts are open to human accruals, error, definition and e stimation like refunds accounts and depreciation accounts. In order to attract more investors, the economic performance dismiss be inflated by intention every(prenominal)y manipulating figures on inancial reports (Dennis, 2010). Furthermore, besides the financial factors in financial reports, opposite several elements including economic, social, and environment can also influence an enterprises financial position.Thus, due to ignorance of separate factors, the financial position disclosed by accountants may be inaccurate. Last but not 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 loyalty and efficiency, etc. hat also impacts business close making (Dennis, 2010). 2. Real estate investment trust (REIT) Industry and companys historical background George M. Marcus as the real estate entrepreneur formed 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 by mutual funds by many Americans (REIT, 2012). Essex develops, manages and acquires multifamily residential properties in the specific provinces like the San Francisco, Southern calcium and the Seattle metropolitan area and Essex relates to land and its appreciation on it like offices, apartments and hotels.Essexs Property Portfolio so furthest Multi-family pic Office pic Retail other unclassified pic Specialty unclassified pic According to the to a higher place table charts promulgated by Essex in March of 2013, there are 166 communities comprising 29,506 apartment units and total approximately 315,900 square feet of four-spot commercial buildings which are located in major regions of California and Washington under the property portfolio. in like manner the existing marts, Essex intended to evaluate some new markets by identifying new areas and developing new loose joint venture projects. . Conceptual framework merchandise metric can be defined as a measuring framework which quantifies a dynamic, dilute, or characteristic and also can be utilise by practitioners in market monitoring and business planning to explain diagnose causes, phenomena, project the results of hereafter 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 precauti on 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 sevensome specific metrics adapt to measure Essex companys performance and analyze competitors positions. According to the above figure, they are fall out on equity (ROE), Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA), year-on-year liftth revenue, return on investment, profitability metrics, efficiency calculations and capital structure ratios.Gross profit rim, net profit bank and cash flow to gross revenue 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 turnover ratio will be calculated as well. Finally, there are three capital structure ratios including equity ratio, debt ratio and debt equity ratio(Mcdonald and Mouncey, 2009).The most vital rea son 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 particular 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 before Interest, Taxes, Depreciation and Amortization (EBITDA) As an alternative for a cash-based profit measure, EBITDA can be also defined as the profit before interest, valuateation and depreciation and amortization expense. Because it excludes financing and tax charge besides asset diminution, its main aim is to measure entitys raw direct wampum compare and analyze profitability between companies (Birt et a l. 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 ostensibly illustrates that both of them tried to raise their EBITDA and therefore decline 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 to a lower place 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 dower 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 value means better likelihood of success to disjoint more satisfactory return to owners and cover more other expenses (Atrill et al. 2008). Net profit margin reveals the b alance wheel of sales revenue results in profit before interest and tax (Birt et al. 2010).This ratio is the most discriminate 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 efficient productivity and creditworthiness and indicates the firm has more ability to grow (Business Dictionary, 2012).