Reald vs Imax Financial Accounting Analysis
Accounting Analysis | RealD Inc vs. IMAX Corp. | |
EXECUTIVE SUMMARY
RealD Inc is a leading global licensor of 3D technologies while IMAX Corp specializes motion picture technologies and presentations. While the two markets may seem mutually exclusive, they are not, and with indications of both parties having intentions to foray into broader market segments, the competition between both parties could not be more intense than it is now. Even though it may seem that IMAX is performing better, a deeper look into the financial statements of both companies shows that each company has its own strengths and weaknesses. It is also reassuring to see that RealD is improving upon its financial position while IMAX seems to be slipping. RealD also appears to have its finger on the pulse of new trends in consumer electronics and has also developed and expanded a recycling plant that not only curtails costs but boosts its corporate image. Provided RealD positions itself in the right way, it is very likely that it will gain the upper hand in this bitter-sweet rivalry.
INTRODUCTION
One of the main concerns with RealD vis-à-vis IMAX is that RealD has a much longer collection period. This affects its ability to pay bills faster and may also lead to large write-offs associated with bad debt. The company should look into minimizing this problem by perhaps offering its clients incentives to pay early or by introducing a late fee (if these measures are already not in place). RealD also may appear to not generate as much profit as IMAX but it is investing a large amount of money in R&D, advertising and personnel costs as it is seeking to expand into new segments and markets.
It was also found that IMAX appears to be operating in a more risky environment. Given the seasonal nature of the business and varying consumer trends this may not be the best way in which to conduct operations.
ANALYSIS 1) IMAX’s Financial Performance Compared to RealD.
While IMAX
EXECUTIVE SUMMARY
RealD Inc is a leading global licensor of 3D technologies while IMAX Corp specializes motion picture technologies and presentations. While the two markets may seem mutually exclusive, they are not, and with indications of both parties having intentions to foray into broader market segments, the competition between both parties could not be more intense than it is now. Even though it may seem that IMAX is performing better, a deeper look into the financial statements of both companies shows that each company has its own strengths and weaknesses. It is also reassuring to see that RealD is improving upon its financial position while IMAX seems to be slipping. RealD also appears to have its finger on the pulse of new trends in consumer electronics and has also developed and expanded a recycling plant that not only curtails costs but boosts its corporate image. Provided RealD positions itself in the right way, it is very likely that it will gain the upper hand in this bitter-sweet rivalry.
INTRODUCTION
One of the main concerns with RealD vis-à-vis IMAX is that RealD has a much longer collection period. This affects its ability to pay bills faster and may also lead to large write-offs associated with bad debt. The company should look into minimizing this problem by perhaps offering its clients incentives to pay early or by introducing a late fee (if these measures are already not in place). RealD also may appear to not generate as much profit as IMAX but it is investing a large amount of money in R&D, advertising and personnel costs as it is seeking to expand into new segments and markets.
It was also found that IMAX appears to be operating in a more risky environment. Given the seasonal nature of the business and varying consumer trends this may not be the best way in which to conduct operations.
ANALYSIS 1) IMAX’s Financial Performance Compared to RealD.
While IMAX