Tech Start-up Financial Analysis

Tools used: Power BI

Project Objective:

This project is to conduct a comprehensive financial performance analysis of Tech Gear from 2022 to 2024, focusing on profitability, capital structure, liquidity, efficiency, and cost management. The goal is to identify trends, assess financial health, and provide actionable insights to support strategic decision-making and improve operational efficiency.

Key Observations:

1. Profitability:

   • Revenue peaked in Q4 2022 (over $650K) but declined to approximately $453K by Q3 and Q4 of 2024. Although gross profit margins remain stable, the contraction in revenue signals a need to assess customer retention strategies and market share performance.

   • COGS remains elevated, while marketing and administrative costs show fluctuations. To sustain profitability, it is essential to maintain a lean cost structure through tighter procurement and production controls. Additionally, the ROI of R&D investments should be evaluated to ensure they are contributing to meaningful innovation and long-term growth.

2. Liquidity & Solvency:

   • Overall liquidity is strong, supported by a healthy Current Ratio and Quick Ratio, although the Quick Ratio briefly dipped below the benchmark in Q3 2022.

   • The Interest Coverage Ratio remains high, indicating robust capacity to service debt.

   • Working capital is positive, but beginning to show early signs of strain in 2024 (except Q3). It is important to monitor short-term liabilities closely and ensure timely collection of accounts receivable to preserve liquidity.

3. Efficiency:

   • Asset Turnover and Inventory Turnover fluctuate significantly across quarters, reflecting potential operational inefficiencies. Continued efforts to refine demand forecasting and uphold just-in-time inventory practices are necessary to minimize excess stock and working capital tie-up.

   • While Accounts Receivable Turnover remains mostly below the industry benchmark (5–8), irregular spikes and dips further underscore the need for stronger credit control policies and more consistent collection practices.