writer Da Qiu
2. Real estate investment trust (REIT) Industry and company’s historical background3
3. Conceptual framework4
4. Marketing metrics6
4.1 Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA)6 4.2 Profitability metrics7
4.3 Asset efficiency analysis9
4.4 Return on equity10
4.5 Year-on-year growth revenue11
4.6 Return on investment12
4.7 Capital structure ratios:12
5. Conclusion and recommendation14
This study aims to figure out Essex Property Trust’s competitive advantage and marketing strategy compared and contrasts with two major competitors by using key financial marketing metrics which used to measure companies’ financial health and success.
All the using metrics are calculated based on three years data from 2010 to 2012 in the annual financial reports including balance sheets, income statements and cash flow statements which provided by Essex Property Trust Inc. Via analyzing and discussing the interrelated financial ratios over these three years, the performance and developing trend of Essex Property Trust Inc. Will be measured and understood. Moreover, this study illustrates what the two rivals BRE Properties and Brandywine Realty Trust’s positioning were in property industry.
The companies’ official website has comprehensive information like histories and backgrounds of company, internal and external environment that influencing business running, every detail of financial data and even critical issues. Therefore, it is the most critical resource. In addition, there are other useful methods such as academic reports, journal articles, books and electronic database that provide theoretical knowledge’s about each metric.
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 accounts and depreciation accounts. In order to attract more investors, the economic performance can be inflated by intentionally manipulating figures on financial reports (Dennis, 2010).
Furthermore, besides the financial factors in financial reports, other several elements including economic, social, and environment can also influence an enterprise’s financial position. Thus, due to ignorance of other 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, customer’s satisfaction, employees’ loyalty and efficiency, etc. that also impacts business decision making (Dennis, 2010).
2. Real estate investment trust (REIT) Industry and company’s 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 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...