Acc 608 Adobe System Company Analysis

Company Analysis – Adobe System

I will analyze this firm’s business segments, foreign exchange risk, labor needs and issues and borrowing capabilities and needs for working capital and capital investment in this report.

The firm’s primary business segments

Adobe’s products and services can be categorized into three business segments: digital media, digital marketing and print and publishing. Digital media and digital marketing makes up 98% of their total revenue, while print and publishing only accounts for 2%.

Digital Media Segment

Adobe’s digital media segment focuses primarily on the needs of individuals and small enterprises to create, edit, design and publish their creative ideas.  Their customers include designers, artists, photophraphers, video makers and web developers. Adobe Creative Cloud is their most popular subscription service of their digital media business. It allows members to design, edit, store and share their photos. Documents, graphics and videos across desktops, web and phone. In Quarter 3, 2017, Adobe creative cloud reported a revenue of $1,063.9 million.

Digital Marketing Segment

The focus of their digital marketing business is to provide solutions which meet the needs their users to combine and analyze data, advertise, target selected customers and optimize media. Their users include marketing professionals, media managers, data analysts, and customer targeting specialists. Digital marketing segment includes Adobe Analytics, Adobe Target, Adobe Social, Adobe Media Optimizer and other five products. In Quarter 3, 2017, Adobe digital marketing segment reported a revenue of $507.8 million, 29% of their total revenue.

Printing and Publishing Segment 

Their print and publishing business address market need of high quality and efficient printing and publishing. They provide high printing technology to their users. Adobe PostScript and Adobe PDF are the two flagships of their printing and publishing segment. Adobe PostScript is a printing language that allows users to send their documents from platform to printers. Adobe PDF Print is a software that allows users to edit, store, share, print PDF-based documents.

Adobe’s need for foreign exchange

As a global company, 42% of Adobe’s total sales are generated from customers outside of United States. According to “Adobe Systems Investor Relations Data Sheet”, in Quarter 3, 2017, 58% of their total revenues are revenues in Americas. EMEA produced a revenue of $500.8 million, accounted for 27% of the total revenues. And Asia produced a revenue of $277.2 million, accounted for 15% of the total revenues.

As a result, the firm had a high need for foreign exchange. In addition, they are subject to the following risks: