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Competition Bikes Inc
Written by Administrator Tuesday, 03 July 2012 08:45 -

Financial analysis:

Company name: Competition Bikes Inc.

Activity: Financial Analysis

The financial analysis of a business organization involves the complete assessment of the liquidity, profitability, competitiveness and stability of the business. The process is done through using the financial statements of the business. The financial reports are generally presented to top management for purposes of decision making and setting up goals.

Analyzing Competition Bikes Inc.’s financial status requires evaluating its internal operations reflecting the horizontal, vertical, ratio, and trend analysis, as well as its working capital. These reviews provide profit margins allowing for projecting any necessary budget restraints in overhead costs and sales potential. Yearly production performance comparisons, based on overhead versus profit, enable a budget projection for ordering production materials on a month-to-month basis. (Shim, J. and Siegel, J. 2009).

Horizontal Analysis

The horizontal analysis is the study of percentage changes of comparative statements in the case of Competition Bikes Inc.’s years six and seven, and seven and eight. Using the horizontal analysis chart, Competition Bikes Inc., shows the accounts payable, between years six and seven increased as it did between years seven and eight.

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Competition Bikes Inc
Written by Administrator Tuesday, 03 July 2012 08:45 -

According to the horizontal analysis, Competition Bike Inc.’s net sales between year six and seven increased 33.3 percent at $1,495,000. Net sales of the CarbonLite product, between years seven and eight, decreased 15.0 percent with a loss of $897,000 over the previous year. Gross profits between years six and seven show a 37.5 percent increase at $447,000, and for years seven and…...

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