Financial Accounting Company Research Paper

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The company I decided to research was the homebuilding company Hovnanian Enterprises. I chose to analyze this company and their financial information because I recently own shares within the company. This past summer my grandmother decided to buy stock for me as a college gift. She felt investing and starting early is important since she has been for 60 years. Up until this paper, I had no knowledge about the only company I own stock in. I decided this was the perfect opportunity to learn more about them so I can make better investing decisions in the future. Hovnanian Enterprises was founded in 1959. They design, construct and market a variety of for-sale housing in 178 residential communities in 18 states. The company works with an array of housing groups. They cater to individual detached housing and higher-occupancy dwellings, such as townhouses, condominiums, and retirement homes. Hovnanian is one of the nation’s largest homebuilding companies in the U.S., with total revenues of $1.6 billion on 5,362 home deliveries in fiscal 2009. As one of these nation’s largest homebuilders, they have operations all throughout the US. The states includes California, Delaware, Florida, Georgia, Illinois, Kentucky, Maryland, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The company acquires and develops the land where the developments are built; although in some regions offer to build their house designs on private land. Their homes are marketed and sold under the trade names K. Hovnanian Homes, Matzel & Mumford, Brighton Homes, Parkwood Builders, Town & Country Homes and Oster Homes. The company is greatly diversified by product type, selling a wide range of attached and detached home styles to buyers ranging from first-time purchasers to luxury buyers. As the developer of K. Hovnanian's® Four Seasons communities, the Company is also one of the nation's largest builders of active adult homes and has developed a specialization in urban infill locations. Hovnanian Enterprises builds about 14,600 houses a year, with base prices ranging from $46,000 to $2,350,000 and averaging about $280,000. The Hovnanian family controls about 30% of the company shares, a stake worth $1 billion in 2005. As of 2006, the company’s corporate headquarters reside in a new building in Red Bank, New Jersey. Hovnanian Enterprises was created by Kevork Hovnanian in 1959. He was an ethnic Armenian originally from Iraq. He and his three brothers each contributed $1,000, in addition to $20,000 they borrowed, to create Hovnanian Enterprises. The company earned a reputation of selling low cost condos and townhouses. They built typical two-bedroom, two bathroom homes each costing about $30,000. Hovnanian eliminated extra amenities like communal swimming pools, which by other buyers were used to attract their customers. According to Hovnanian, “There are limited recreation facilities going in because people are having little time for socialization.” To his point, it was becoming unnecessary to build and include these amenities when people were hardly using them, not to mention afford them. By 1989, Hovnanian Enterprises had built and sold more than 30,000 homes and condos. Between 1989 and 2009 the company sold an additional 200,000 residences. At this time they expanded their construction to include luxury homes, mid-priced homes and retirement centers. Kevork Hovnanian, the main establisher, stepped down as president in 1989, while his son Ara K. Hovnanian took his place. Hovnanian remains one as one of the top homebuilders in America because of their strategy. They targeted the average family and family income to build their clientele. They have leveraged their market position by providing mortgage and title services to homebuyers. They have also been a leader in implementing streamlined processes and technology solutions for home sales and construction, which has lead to...
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