Marketing Metrics for Essex Property Trust Essay

Via analyzing and discussing the interrelated pecuniary ratios over these three years, the mathematical operation and development trend of Essex space Trust Inc. Will be footfalld and understood. Moreover, this c all told for illustrates what the two rivals BRE Properties and Brandywine Realty Trusts positioning were in spot industry. 1. 3 Methodology The companies official website has comprehensive information wish histories and backgrounds of company, innate and external environment that influencing business running, every detail of financial information and even critical issues.Therefore, it is the or so critical resource. In addition, on that point argon other useful regularitys 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 historical facts are open to human accruals, error, interpretation and estimation like refunds flyers and depreciation accounting systems. In order to attract more investors, the economic performance squeeze out be inflated by intentionally manipulating figures on inancial reports (Dennis, 2010). Furthermore, likewise the financial factors in financial reports, other several elements including economic, social, and environment nookie also influence an enterprises financial position.Thus, due to ignorance of other factors, the financial position disclosed by accountants may be inaccurate. blend but not the least, the financial statement only took quantitative factors into account but fails to disclose information like integrity of management, prestige and report card of the business with public, customers satisfaction, employees loyalty and efficiency, etc. hat also impacts business decision making (Dennis, 2010). 2. Real terra firma investment send (REIT) Industry and companys historical background George M. Marcus as the substantive estate entrepreneur formed Essex Property Corporation in 1971 and subsequently 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 an(prenominal) Americans (REIT, 2012). Essex develops, manages and acquires multifamily residential properties in the specific provinces like the San Francisco, Southern atomic number 20 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 unclassified pic speciality 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 forthright feet of four commercial buildings which are located in major regions of California and Washington under the property portfolio. Besides the existing markets, Essex intended to gauge some new markets by identifying new areas and developing new loose joint venture projects. . Conceptual framework Marketing metric can be specify as a measuring framework which quantifies a dynamic, trend, or characteristic and also can be used by practitioners in selling monitoring and business planning to explain canvass 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 o f prosody because it can helper managers with maintenance of productive focus on markets and customers and identification of weaknesses and strengths in some(prenominal) execution and strategies (Bazley et al. 2004). pic There are seven specific metrics correct to measure Essex companys performance and analyze competitors positions. According to the above figure, they are unsay on uprightness (ROE), Earnings onwards Interest, Taxes, dispraise and Amortization (EBITDA), year-on-year growth receipts, return on investment, positiveness metrics, efficiency calculations and neat structure ratios.Gross profit margin, salary profit margin and exchange flow to sales ratio are three critical basic figures that will be used to measure entitys profit office (Bazley et al. 2004). Then, in order to identify companys business efficiency, Return on asset and asset turnover ratio will be metrical as well. Finally, there are three capital structure ratios including equity ratio, debt r atio and debt equity ratio(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 avocation 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 change-based profit measure, EBITDA can be also defined as the profit before interest, levyation and depreciation and amortization expense. Because it excludes financial backing and tax charge besides asset diminution, its main aim 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 decline their operating cost. Among them, Essex had the most dramatic increasing trend in EBITDA by changing come in 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 manoeuver 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 rate heart and soul better likelihood of success to divide more satisfactory return to own ers and cover more other expenses (Atrill et al. 2008). Net profit margin reveals the symmetricalness 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 efficient productivity and creditworthiness and indicates the firm has more ability to grow (Business Dictionary, 2012).