Financial Analysis Of Software Company Sample Paper

Company Overview

Aztec software, set up in 1995 in Bangalore, promoted by Mr. S Parthasarathy, work with software product development companies (Independent Software Vendors- ISVs). The company originally incorporated as a Private Limited Company was converted to a Public Limited Company with effect from June 12, 2000.

Five key technology focus in Aztec are in Data Management/ Business intelligence, Integration Engineering, Mobile Applications, Secure Identity Management and Web Services. The Group’s principal activities are to provide comprehensive software product engineering and quality engineering services that accelerate development of software products and reduce time to market. It has built, tested, and released over 1500 products in the 10 years of its existence. Aztec’s clients list includes Microsoft, AOL, Honeywell, Hyperion, Embarcadero, STEEL 24-7, and Cadence.

In the year 2004 Aztec acquired Disha, India’s largest independent software testing solutions provider. The integration of Disha with Aztec is complete. The Group’s (Aztec and its subsidiaries) operations predominantly relate to providing software development services (Aztec) and independent software testing services (Disha), delivered to clients operating globally.

Shareholding Pattern: Recent Developments

The Company continues to improve its record of flawless delivery, and has implemented Project Insight, a new and powerful Project Management tool. This tool enables enhanced global collaboration between the clients and the delivery teams and reduces time and distance barriers and improves operational visibility.

Aztecsoft’s Bangalore development center were assessed at the highest level of 5 and is a reflection of its ability to consistently apply Quantitative, Project and Process Management techniques to its Services.

The Company launched a set of Expert Services – such as Performance Engineering, Security Engineering, System and Database Architectural Services etc. These services have been created out of the vast xperience and expertise your company has developed over the several years of focus on select technologies and product engineering services. In a rapidly-maturing and competitive software products market, such services become very attractive to clients, who are looking to showcase better value for their products.

Aztecsoft announced its entry into two new Technology segments this quarter -Wireless & Networking Technologies and Embedded & Devices technologies. A few clients engagements have concluded successfully and growth of these initiatives appear bright. During this year Aztecsoft added 20 new clients with a good mix of small and large clients. The total active client count increased to 72 at the end of March 3 1, 2006.

Significant investments have been made on infrastructure to meet the current and future growth of the company. The Company’s development centers and Test Labs are spread across Bangalore, Pune, Hyderabad, Santa Clara and Seattle.

Industry Overview

Global Scenario

The worldwide market for InfoTech products and services was estimated at $2. trillion in 2005, according to IDC (International Data Corporation). Growth in this sector picked up considerably in 2004-2005, as the global economy rebounded from the recession of the early 2000s and organizations increased IT budgets in order to purchase new systems, software and services. Software alone was about a $200 billion global market in 2005. Hardware and peripherals were about an $800 billion global market (about 200 million PCs were sold in 2005), while computer services were worth about $1 billion.

Worldwide sales of chips grew to about $235 billion in 2005, up from $218 billion in 2004, thanks to very strong demand from makers of everything from iPods to cell phones to PCs. In the U. S alone, spending on information technology for 2005 was about $416 billion, up about 7%. The GIT report ranks nations on the basis of how good they are at exploiting global IT developments and takes into account the following: affordability of Internet access, telephone connection charges, and quality of mathematics and science education, government prioritization and procurement of ICT.

The US maintains global leadership in the business readiness component of the rankings as well as in variables such as the quality of its scientific research institutions and business schools which have no match in the world — and the availability of training opportunities for the labor force as well as the existence of a well-developed venture capital market, which has spurred innovation. Singapore ranked second in the GIT report, which is primarily due to its superior performance in terms of the ability of individuals and government to tap the potential of ICT, as well as actual government usage of ICT.

Singapore’s remarkable performance is a consequence of the government’s consistent and continuous efforts in fostering ICT penetration and usage, as well as the quality of the country’s educational system and its able use of foreign technology.

Indian Scenario

The vision of Information Technology (IT) policy is to use IT as a tool for raising the living standards of the common man and enriching their lives. Though, urban India has a high internet density, the government also wants PC and Internet penetration in the rural India. The annual growth rate of India’s software exports has been consistently over 50 percent since 1991.

No other Indian industry has performed so well against the global competition. According to a NASSCOM-McKinsey report, annual revenue projections for India’s IT industry in 2008 are US $ 87 billion and market openings are emerging across four broad sectors, IT services, software products, IT enabled services, and e-businesses thus creating a number of opportunities for Indian companies. In addition to the export market, all of these segments have a domestic market component as well.

It is expected that the industry will generate a total employment of around four millions peoples, which accounts for 7 per cent of India’s total GDP as in the year 2008. Software exports has major share in India’s total exports. As of the year 2004-05, both software and services revenue grew by 32 percent to $ 22 billions and $ 28. 5 billions in 2005-06. According to NASSCOM, India’s domestic market grew by 24 per cent. Presently Indian companies have concentrated on only two largest IT service markets. They are USA and the UK. Even Canada, Japan, Germany and France represent huge growth potential in the industry.

The off shoring momentum continues unabated. Indian companies, with their global delivery capabilities, execution skills, skilled human resources, low cost base and unique location, continue to grab the largest share of the pie. Going forward, the broad trend in the industry globally has been that deal sizes are getting smaller. This has suited the Indian industry perfectly, as they do not as yet have the capabilities, scale and resources to execute huge billion dollar deals, which require a lot of upfront investments and have proved to be a drag on profits and margins for the MNC companies.

However, as far as the global software products business is concerned, it is a totally different story. There are very few Indian product companies. Infosys, TCS and Geometric have their own products, but they do not form a major share of their business. Globally, the software products industry, given its nature, is not as fragmented as software services. Large investments in research and development (R&D), sales and marketing (S&M) and sustained product development are required to keep the product relevant and better than the competition.

Therefore, companies like Oracle, Microsoft and SAP globally dominate the products market in their respective spheres. Budget 2006 to hit software industry adversely: Eight percent excise duty has been imposed on packaged software; additionally service tax has been increased to 12%. This is bound to have a negative impact on the growth of the Indian software industry. Commenting on the implications of the Union Budget, Mr. Kiran Karnik, president NASSCOM said “Increase in levies on packaged software and on IT hardware will result in higher prices and have an adverse impact on millions of customers and on the domestic IT market.

It will be a setback to efforts to promote IT utilization in the Indian economy and for vital applications like education and health. ” According to a recent study by the International Data Corporation, a reduction in the software piracy by 10 points can have a significant impact on India’s economy. It will add 115,847 jobs; contribute $5. 9bn to GDP, $386mn in taxes and $8. 2bn in revenues to local vendors. ” India has become an R&D hub for IT software services sector. A plethora of opportunities have sprung up in recent years, making it one of the most viable destinations for R&D activities. R&D snapshot – India Google, the world’s largest search engine, has set up an R&D centre in Bangalore

  • Leading web portal Yahoo also carries out R&D work in Bangalore
  • US-based chipmaker Intersil is setting up a design centre in Bangalore
  • IBM has set up a research lab in Delhi to tap Indian talent; it is one of eight such labs in the world. It has 70researchers in India.
  • Mobile phone giant Nokia plans to set up a R&D hub in India
  • Indian Institute of Science, Bangalore, and the Indian Institute of Technology, Mumbai, has been commissioned to set up nanotechnology centers with a total outlay of US$22m over a period of five years


Though the volume of software business is low compared to other global giants, it must be noted that the IT spending and staff recruitment by businesses and government departments in India is increasing at higher rates than North America, Europe and Asia-Pacific countries. The silver lining is that Indian software firms are already being invited to bid for contracts such as the ABN Amro deal for TCS and Infosys, and the General Motors contract for Wipro and indirectly Satyam. A major share of revenues flow in from contracts like these.

Future Outlook

The company Aztec Software has a bright future. Company basically deals with roviding technology services for building products. This Outsourced Product Engineering market segment continues to be robust and is in line with predictions from various bodies. Gartner projects this market to be worth $8 billion in 2010. The outsourced testing market is predicted to be worth another $8-10 billion by 2010 as well. Nasscom predicts the OPD market will generate revenues of US$ 8-11 billion by 2008-10 from the current levels of $2-3 billion annually. Company has also commenced building for the next phase of growth, introduced new technology-based solutions and expanded its management team to help it grow further.

It continues to make investments in several new technology-based services and technologies such as Web 2. 0, SaaS, SOA, WiMax etc and is working with its clients to architect and implement the next generation of products. The company continues to leverage its deep technology strengths in Data Management, Quality Engineering to build industry-specific and technology-based solutions for enterprise customers. Aztecsoft’s mission is to build deep relationship with our clients on a long-term basis to enable us to be a strategic partner for software life cycle services.

Company’s focus on technology, very high levels of expertise in all the major technology platforms that matter to software companies, enhanced service offerings to its customers and aggressive growth plans will make Aztecsoft an exciting company for its employees, customers, investors and other stake holders.


Assumptions: (take year as 2010, 2011, 2012, 2013)

  1. Seasonal and yearly fluctuation has been circumvented by taking a weighted average of income and expense over a three year period. However, more weightage has been given to recent happening.
  2. For risk-free return we have taken 364 day treasury bills yield which is 7%.
  3. After 2009, the Free Cash flow shall grow at 5%.
  4. The company is under Tax holiday till 2009.
  5. Net investment takes into consideration the investments made for getting operational performance and does not include the investment made in subsidiaries.
  6. Final value is arrived at by giving 70% weight to fundamental value and 30% weight to relative value as present market price of the share has shown a lot volatility in the recent past

Aztec Software is ranked 11th in the Top 25 Great Places to work in India. It is amongst the World’s 100 Most Innovative Service Providers.

Product development outsourcing is slated to become a big wave in outsourced IT services. Product companies are not looking for just programming services. They are looking at partners who can add significant value to them in terms of process efficiencies, build products faster and better, and create more services around outsourced product development.

Clients therefore want to partner with Outsourced Product Development (OPD) providers who will input the complete product development life-cycle services and also provide exclusive on- demand services which would help engineer a product in a better way.

Aztec software is a specialist in this space and is better positioned than competition to partner with many of the top software companies.

Aztecsoft’s Bangalore development center were assessed at the highest level of 5 and is a reflection of its ability to consistently apply Quantitative, Project and Process Management techniques to its Services. The Company launched a set of Expert Services – such as Performance Engineering, Security Engineering, System and Database Architectural Services etc. In a rapidly-maturing and competitive software products market, such services become very attractive to clients, who are looking to showcase better value for their products. • Aztecsoft announced its entry into two new Technology segments this quarter -Wireless & Networking Technologies and Embedded & Devices technologies.

Symbolism Of “the Flowers” Story

In the short story “The Flowers,” there are examples of diction, symbolism, and setting that prepare the reader for the ending. The example of diction throughout the story is the narrator’s word choice, which prepares the reader for shifts in mood. The example of symbols in the story are the flowers, which represent innocence and youth. The setting that changes from light and cheerful to dark bring forth the grotesque ending. Despite all the example differing, they all foreshadow the ending to the short story.

In the beginning of the story, Walker uses diction to create an atmosphere that is happy and innocent: “It seemed to Myop as she skipped lightly from hen house to pigpen to smokehouse that the days had never been as beautiful as these” (Walker). As the story goes forth, there is a shift in the mood between paragraph four and five. The diction in paragraphs 1-4 was care-free and happy, on the other hand, language in paragraphs 5-9 are negative and dreadful. Myop describes the “strangeness of the land” and how it was “not as pleasant” as her usual adventures.

Furthermore, she uses words like “gloomy” and “damp” to convey the dark setting and prepare the reader for the conclusion of the story. Secondly, Walker uses symbolism in the short story by using the flowers, representing the beauty and sweetness of innocence: “She found, in addition to various but pretty ferns and leaves, an armful of strange blue flowers with velvety ridges and a sweet suds bush full of the brown fragrant buds” (Walker). Myop carries flowers with her that are as beautiful and blind as she is herself about the harsh world.

Ironically, she find a beautiful “wild pink rose” in the middle of the remains of a noose and is blind to the cruel way the skeleton laying in front of her died. She is young, naive, and completely unaware of the face that people were hanged just based on the color of their skin. The flowers represent the blindness that childhood possesses. At the end the “wild pink rose” is her epiphany, and as Myop laid down her bouquet down by the skeleton in the woods she laid down her innocence. She went into realization of maturity and could never go back.

Her laying her flowers down meant “the summer was over,” in other words, her childhood and innocence was gone. Thirdly, the setting is important in conveying the ending of the story. For example, the seasons and times represents the coming of age: “By twelve o’clock, her arms laden with sprigs of her findings, she was a mile or more from home” (Walker). Twelve o’clock is a sing of adolescence, and it being summer represents young age. Also, the setting shifting from “sunny” to “gloomy” shows a dark ending. Myop is surrounded with nature and death itself.

The harvest and “warm sun” make the reader feel calm and care-free. The family’s sharecropper cabin mentioned in the story tell you Myop and her family are African American. The “fallen leaves” and familiar woods explored before put the reader at ease, but when the setting shifts to “strange and “silent” the reader automatically feels negative. The body she found changes the setting to sympathetic knowing his head was laying beside him the remains of a noose near by. The bones and green buckles on the over alls show how long he has been there under ” an over hanging limb of a great spreading oak. The setting gives the details needed to feel as if the reader was there with Myop on her adventure to adult hood. In Walker’s “The Flowers” examples of diction, symbolism, and setting prepare the reader for the ending. The transition in diction, symbolism, and setting all propel Walker’s theme, the coming of age, and help draw conclusions to the ending of this short story. The last sentence clearly indicates a complete end of summer, but the meaning is the complete end of innocence for Myop.

Ford Motor Company – Alan Mulally


Alan Mulally’s conflict management style is examined in this paper. I will explore the wisdom of William Clay Ford, Jr. ’s decision to diversify Ford Motor Company’s executive management staff with an auto industry outsider in order to support financial, operational, and innovation excellence.

Alan Mulally’s Conflict Management Style

Alan Mulally was hired in September of 2006 by Ford Motor Company to be their President and CEO at a time when the company was struggling for its very survival. Mulally’s challenge to reinvent Ford would be great as the company was rife with dysfunctional conflict which was caused by ineffective fiefdoms, leaders who cared more about their careers and rank than the health of the company’s financial longevity, a changing competitive landscape, a culture of complacency and mediocrity, a lack of standardization and excessive duplication, and an environment that had become too comfortable losing money.

William (Bill) Clay Ford Jr. , executive chairman of the board and great-grandson of Henry Ford, recognized that it would take an auto industry outsider to pull the company from the brink of going out of business. His brave choice to bring Mulally to Ford would pay off handsomely. “The revitalized company returned to profitability during the third quarter of 2009. ” (McCluskey, 2010, p. 45) It emerged once again as a leader in the auto industry by delivering innovative products hat customers wanted.

Under Mulally’s leadership, Ford was the only one of the big three Detroit automakers who did not receive a bailout from the US Government during the Automotive Industry crisis of 2008-2009. Mulally’s leadership at Ford has not only returned the company to profitability, it has also returned the company culture to support innovation. Mulally’s background of managing and leading innovation at Boeing prepared him for the challenge at Ford.

He came to Boeing directly from college as an engineer and worked for over thirty years in various roles on several design teams with specific accolades associated with delivering the first all-digital flight deck in a commercial aircraft and leading the design of the 777. Having participated in transportation innovation from an engineering and management perspective for over thirty years, Mulally was more than prepared to take on the challenge of returning Ford to a profitable and innovative company.

In order to accomplish this, he had to work on changing the culture of the company and leverage conflict management techniques that would manage and support creativity and innovation. The company was suffering from dysfunctional conflict which Mulally sought immediately to address. As an example of how eloquently he manages conflict, consider his handling of a visit he and two senior engineers made to one of Consumer Reports automobile testing facilities. As the Consumer Report tester was reporting the test results, the engineers got defensive and began explaining design decisions to Mulally.

He immediately recognized that there was a conflict caused by incompatible goals. That is, he had flown to Consumer Reports to get information and test results, not to understand why design decisions were made. Observing this conflict caused him to comment that, “We seek to be understood more than we seek to understand,” (Mulally as cited in Kiley, 2007) In order to get the visit back on track he used a problem solving conflict style to refocus the engineers by suggesting that they just listen to the test results and write down their notes.

While the Business Week article recounting this visit does not tell the final outcome of the visit, it seems obvious that the team could focus on the goal of the visit and Mulally’s intervention would be helpful to ensure that the goals of the visit were met. Mulally’s tenure at Ford has focused on operational and financial excellence. In order to reduce dysfunctional conflict, he encourages a culture that shares information, is safe to admit that you “don’t know”, standardizes where appropriate, eliminates duplication, includes subordinates in privileged executive meetings, and treats white and blue collar workers the same.

His hard work to change the culture is paying off. “Later this year, as the 2012 Ford Focus goes into production, an American car company will be producing a global car—80 percent its parts are the same no matter where it’s built. ” (Johnson, 2010) Mulally’s work has also created some conflicts. Some of the executives he inherited are struggling to find their place in the organization. In order to support constructive conflict management, Bill Ford will not entertain executives that want to complain to him about Mulally. He encourages them to work with Mulally directly to resolve conflicts.

Bill Ford commented that, “If I had even cracked the door open an inch to let anybody complain to me or to think that there was ever any separation between the two of us, I think the culture would have overwhelmed Alan and ultimately brought the company down. ” (“Time Chooses Mulally”, 2010) Bill Ford’s commitment to the long term goal of improving the health of the company is causing him to support a strong team identity; which is the most important indicator that team members will adopt a constructive conflict management style.

Mulally’s appointment as the President and CEO was a risk for Bill Ford to take; given that Mulally had no auto industry experience. His appointment has been a good investment. Since his arrival at Ford, Mulally is returning the company to profitability, supporting a culture that delivers innovative products that customers want, and investing in employee motivation so that they can focus on the long term success of the company. Bill Ford’s analysis of Mulally’s progress is that, “Alan was the right choice [to be CEO], and it gets more right every day,” (Bill Ford as cited in Taylor, 2009)


  1. Kiley, D. (2007). THE NEW HEAT ON FORD. BusinessWeek, (4037), 32-38.
  2. Johnson, M. (2010). Turnaround Tale. CIO, 23(17), 4.
  3. McCluskey, E. (2010). Alan Mulally, SM’82. Technology Review, 113(5), M45.
  4. Glinow, M. (2010). Individual Behavior, Personality, and Values.