代写Milestone 1: Preliminary Insight Development代写数据结构语言

 

Milestone 1: Preliminary Insight Development

CHINA AND AUSTRALIA

Introduction

The purpose of this report is to help businesses make better commercial decisions and gain a better understanding of economics (PWC, 2024), which PWC performs for its clients. For the period from 2019 to 2022, the study examines the financial performance of wholesale distribution companies, and compares their performance with macroeconomic variables. For PWC, this report is necessary to gain a deeper understanding of the profitability of wholesale distribution companies.

Traditionally, wholesale distribution is a business that deals in large quantities of goods and has warehouses, distribution centers, and logistics in place to manage and deliver inventory to retail stores. Based on the data given, we will investigate the profitability drivers of the wholesale distribution company, as well as the impact of COVID-19 pandemic on the target countries, with an initial analysis of correlation and trends. Three main components make up the intricate process of profitability, which is dependent on several variables. These are ERP tailored to a particular industry, warehouse management, and profitability analysis (Weygand, 2022).

The report will be structured in the following parts. After the brief introduction, we will conduct data summary and descriptive statistics. A short conclusion will be provided on the analysis results, as well as a plan for further investigation. An analysis of the numerical and graphical results from Excel software will follow.

Data Summaries and Descriptive Statistics

The macroeconomic statistics of Australia and China, two target countries, as well as the raw financial data of several wholesale enterprises have been made available to us. There are many similarities between these two nations, including their huge landmasses and populations, which support the growth of wholesale commerce. However, their disparities in politics and the economy may also influence how domestic wholesalers expand their businesses. There are a total of 1786 samples in Australia and 2879 samples in China for wholesale enterprises between 2019 and 2022. There are four macroeconomic factors that span the years 2019 through 2022. Since the provided data set is far from perfect, data cleaning is required before it can be used. Ultimately, as Table 1 (appendix) illustrates, we have obtained the mean value for the variables of interest.

Furthermore, the data was further analyzed in the COVID-19 effect analysis phase in order to investigate the influence of the virus on various businesses in Australia and China. Eliminating businesses that are linked to distinct industries and businesses where a single company represents an industry is the primary technique of data processing. Tables 2 and 3 (appendix) indicate the average profits for various industries in China and Australia from 2019 to 2022.

Initially, in order to investigate the fundamental economic conditions in China and Australia between 2019 and 2022, the following factors will be of relevance for the research.

A. Variables that could serve as a stand-in for profitability

(1) Operating profit / Turnover (%)

(2) Operating profit/Total Assets (%)

(3) Return on capital employed (%)

B. Variables that reflect important economic indicators or local jurisdictional events:

 (1) GDP growth rate (OECD 2024)

(2) OECD 2024 exchange rates

(3) Lending (OECD, 2024)

(4) Nett national income (OECD 2024)

Total Assets / Operating Profit (%) is used to compare how COVID-19 has affected various industries in China and Australia. Statistical analysis, comparison analysis, correlation analysis, and the study of the COVID-19 impact are among the analysis's outcomes. The appendix contains the results of the data analysis method that was followed.

(i). Statistical analysis 

The preliminary statistical summary for the data set, like the statistic description for mean, median, standard deviation (SD), etc. For details, please see the appendix (Table 4).

(ii). Comparative analysis

The bar chart and the trend line chart to present the development of variables over time, and compare two countries’ performances in the same variables of interest. For details, please see the appendix (Figure 1, Figure 2 and Figure 3).

(iii) Correlation analysis

The Correlation of GDP growth, Exchange rate, Lending, Income,EBIT/Turnover, EBIT/Assets and Return on cap were conducted in the Correlation analysis.For details, please see the appendix (Table 5).

Research was done on how COVID-19 affected various businesses in China and Australia. The most and least affected industries in each nation were identified for comparison in the COVID-19 effect analysis in order to determine how each has been impacted. Additionally, using graphs and charts made from the data of the individual companies in these areas, trend analysis was carried out. Please refer to Figures 4 and 5 in the appendix for more information.

The data analysis results indicate that the pharmaceutical wholesale operation, which is represented by China Resources Pharmaceutical Commercial Group Co. Ltd., is the least affected industry in China with respect to the COVID-19 pandemic's effects on various industries. According to the data trend, there will be a steady demand for pharmaceuticals between 2019 and 2022.During COVID-19, there has been an increase in demand for medications, which has led to strong profitability. The printing and writing paper wholesale business is the one most impacted. Utilizing Tianyi Ufos Technology Co. Ltd. as an instance, the data trend shows that demand decreased significantly in 2020 and then gradually increased in 2021–2022.

The least affected industry in Australia was the wholesale trade in fresh fruit and vegetables, according to data from Export Trading Group Australia Pty Ltd. of C.A.L. Marketing Pty Ltd., which shows that demand generally stabilized but continued to decline somewhat in 2020 before progressively increasing in 2021 and 2022. This outcome is consistent with what we anticipated, as individuals required resources to survive the outbreak. Due to the fact that exports were restricted during COVID-19 and employees were not required to work in offices, industries like printing and exporting were badly impacted. Since people still required food and medicine, the availability of such items was rarely impacted.

The study discovered a strong association between GDP growth and the profitability of Australian wholesalers, with correlation coefficients of 0.90% for return on capital, 0.98% for return on assets, and 0.96% for profitability. A stronger national economy will make more money available for consumption, which will raise the demand for wholesale items and boost wholesalers' profitability. The analysis demonstrates that the exchange rate has a negative impact on wholesalers' profitability (option of profit margin percentage = -0.59, choice of return on assets percentage = -0.48 and return on capital percentage = -0.41). This is because a stronger Australian currency lowers nett exports from the nation, which has an impact on economic growth and lowers demand for wholesalers.

For China, it is found that the wholesalers’ profitability are moderately related with GDP growth (r=-0.08 for Opt Margin%, r=0.44 for Opt Asset Return%, r = 0.67 for Return on capital employed %). But the exchange rate is positively affecting the wholesalers’ profitability (r=0.54 for Opt Margin%, r=0.35 for Opt Asset Return%, r = 0.07 for Return on capital employed %). Such result might be attributed to the imbalanced wealth re-distribution mechanism in China, which might result in the unequal sharing of economic development among people with a high social wealthy gap. As a result, the good economic growth might not lead to the better income of mass population in China, and thus the economic growth and FX rate variance might not so directly affect the general wholesalers’ profitability as expected.

Based on a temporal trend analysis of GDP growth comparison and exchange rate comparison graphs, it can be observed that China and Australia had weak GDP growth during the COVID-19 epidemic in 2019 and 2020, but recovered in 2021 and 2022 when the pandemic subsided. However, in 2022, China's GDP growth and foreign exchange rate decreased in contrast to Australia's increasing GDP growth and favourable foreign exchange rate in the same year. This suggests that factors other than COVID-19 have been influencing the economies of both countries recently.

From 2019 to 2022, profitability proxies for Australia are expected to increase gradually. As an illustration, the operating margin of Cargill Australia, a typical Australian wholesaler, increased from 6% in 2019 to 11% in 2022. On the other hand, China's profitability has been declining and varies significantly over the same period. For instance, throughout the course of the four-year period from 2019 to 2022, Xiaomi Communications, a representative wholesale firm in China, had operating margin values of 9%, 9%, 10%, and 9%, respectively.

Provide your plan for the next step of the analysis

Although the research results are still far from adequate, we have identified several helpful ideas for PWC to consider based on the analysis above. To achieve improved economic analysis results for commercial purposes, additional study is required to address the unresolved issues stated above, which include the following points:  

1. In order to explain the discrepancies in the two nations' respective trends of economic growth, what other notable events besides the COVID-19 pandemic have had an impact on the target countries' economic growth and the profitability of their wholesale firms?

2. Describe the variations in the business strategies and patterns of economic growth between China and Australia that account for the disparities in profitability between the two nations' wholesale industries.

3. Which specific government measures were implemented in both nations over the research periods to account for the variations in economic development and profitability of wholesale businesses?