Jet2

In: Business and Management

Submitted By asdftest1234
Words 3979
Pages 16
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.

1 / 18

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…...

Similar Documents

Jet2

...Competition Bikes Task 1 Kevin Moore JET2 July 1, 2013 Competition Bikes Task 1 The financial statements have been released for the past fiscal year. The economic down turn has had an effect on the company; the company is performing well considering the state of the economy. The state of the economy is no excuse for the dip in the company; we must find ways to improve the company’s performance. Reviewing the financial statements will allow us to determine how to improve the company’s financial performance for the future. A1a. The horizontal analysis based on the income statement has indicated the net sales from years 6 and 7 were 33% , net sales from years 7 and 8 were -15%. That is huge differences in nets sales; this decrease is net sales in a weakness. The cause of the decrease can be a result of many different things, such as the company’s product is not being well received by the consumers. There is a similar change with the cost of goods sold, years 6 and 7 was 31.8% and years 7 and 8 was -14.5%. Change is cost of good sold is also a weakness, when the cost of good sold decreases but revenue increases that is a strength in this case the cost of good sold and revenue has decreased. Sales commission has also decreased, sales commission was 33.3% for years 6and 7, then decrease to -15% for years 7 and 8, the weakness can have a long lasting effect on the company. If the salespeople are not selling and making commission the salespeople may leave to work......

Words: 5815 - Pages: 24

Jet2 Task 2

...JET2 TASK 2 1 JET 2 TASK 2: Financial Analysis Theo Adams Western Governors University MBA Program JET2 TASK 2 2 (A1) Budget Concerns Investopedia defines Budget as an "estimation of the expenses and revenues over a specific future period of time. Budgets can be made for a group of people, family, person, country, business, government, organization or anything else that makes or spend money. The budget is a micro economic concept that shows the trade-offs made when one good is exchange for another." When looking at the year 9 budget for CB first thing that jumped out at me was the sales goal of 3510 is a 5247450. This is my first immediate concern considering that the storyline has clearly stated it is a down market due to the reductions in monies for sponsored professional riders from their sponsors. This is the main sources sales for the Carbonlite model from CB. The professional riders not having the same resources they had in year 7 when sales went to 4000 from the 3000 sold in year 6. which meant CB's revenue went from 4485000 in year 6 to 5980000 in year 7. This 33.3% jump was followed by 15% drop from 4000 units sold in year 7 to 3400 units sold in year 8. Again this drop was due to the cut in sponsorship money for the professional riders which ended up reflecting at the drop in revenue as well from year 7 to 8 of 5980000 to 4485000. These facts do not seem to warrant an increase in sales from 3400 units to 3510 units and an Increased Revenue to 5247450.......

Words: 2595 - Pages: 11

Jet2 Task 1

...capital management and working capital acquisition concepts to balance the related trade-off between profitability and risk. 326.4.4: Risk Evaluation and Mitigation - The graduate evaluates internal and external risks and recommends risk mitigation strategies and techniques to an organization. 329.4.6: Government Regulation - The graduate analyzes applicable legal and regulatory requirements to determine whether organizations meet legal responsibilities and act with social responsibility.Introduction: In this task you will use the “Competition Bikes Inc. Storyline” case study to prepare a summary report based on your evaluation of the company’s operations. Task:   Note: Be sure to submit a copy of your Excel workbook when submitting your JET2 Task 1 work.  The evaluator will need a copy of your data to ensure correct evaluation. A.  Prepare a summary report in which you do the following: 1.  Evaluate the company’s operational strengths and weaknesses based on the following: a.  Horizontal analysis results b.  Vertical analysis results c.  Trend analysis results d.  Ratio analysis results 2.  Analyze the working capital of Competition Bikes Inc. Consider the following in your analysis: •  Ways to improve the working capital •  Ways to use excess working capital to generate an increase in profits 3.  Evaluate the internal controls for the Competition Bikes Inc. purchasing system. a.  Recommend corrective actions for any weaknesses. b.  Identify the risks to the company. i.......

Words: 351 - Pages: 2

Jet2 Task 4

...Costing Method: The excel document title, “JET2 Task 1-4 Workbook” and tabs ‘Task 4 Cost-Volume-Profit’, and “Task 4 Activity Based Costing” is where the information is derived from and recommendations will be made based off of the information in these tabs. The excel document title, “JET2 Task 1-4 Workbook” and tab ‘Task 4 Cost-Volume-Profit’ highlights two unit costs methods: traditional and activity based. Each unit cost method will be analyzed and a recommendation will be made regarding which costing method should be used by Competition Bikes. Traditional method to figure out costs- this method computes the overhead cost of titanium bikes at $239,020 and the overhead costs of carbonlite bikes at $232,380 for a total overhead cost of $471,400 ($239,020 + $232,380= $471,400). Again this information was derived from the excel document titled, “JET2 Task 1-4 Workbook” and by clicking on tab ‘Task 4 Cost-Volume-Profit’ and by viewing the second half of the page, looking at the summary of traditional and carbonlite overhead costs. Once the overhead costs are known the direct costs for each bike will be added to that number. So for titanium bikes the direct cost is $402,300 plus the overhead cost $239,020= $ 641,320 for titanium bikes. For carbonlite bikes the direct cost is $447,000 + $232,380= $679,380. The $641,320 for the titanium bikes is considered the total cost and the $679,380 is considered the total cost for the carbonlite bikes. Take the total cost for each......

Words: 1954 - Pages: 8

Wgu Jet2 Task 1

...JET2 Task 1 I. Evaluation of company’s strengths and weaknesses: a. Horizontal Analysis Results evaluation Net sales increased 33.3% from year 6 to 7 which signifies strength in the company. Increasing sales increases stockholder value and the overall value of the company. Net sales decreased 15% from year 7 to 8 which is a weakness for the company and affects the overall value. Advertising expenses decreased 16.3% from year 7 to 8 as well. This is a weakness for the company because the decrease in advertising can have a direct impact on the sales. In addition research and development was 37.55 from year 6 to 7 and -16.3% from year 7 to 8. Research and development will also have a direct impact on sales and year 7 to 8 shows a weakness in the company for research and development. Net earnings increased 313.4% for year 6 to 7 which is strength. Net earnings increase the value of the company. The net earnings from year 7 to 8 were -81.6% which is a weakness and decreases the overall earnings for the company. Utilities increased from 3.8% from year 6 to 7 and 11.1% from year 7 to 8. This is a weakness because it is an added expense for the company and affects overall earnings. Total operating expenses increased 23.9% from year 6 to 7 which demonstrates a weakness in the company. This decreases earnings and the value of the company. Totals operating expenses from years 7 to 8 decreased 3.6% which shows strength in the company and increases the value...

Words: 1607 - Pages: 7

Jet2 Task 3

...Jet2 task 3 Competition Bikes, Inc.Financial AnalysisJET2 Task 3 Introduction Competition Bikes, Incorporated (CBI) has decided to weigh their options for expansion into Canada by either acquiring or merging with Canadian Bikes, Inc. This report will discuss the proposed expansion and make recommendations based on the company's capital structure. Capital structure can be described as how a business finances its assets. There are two main types of capital: Equity and debt. Capital structure is usually a mix of debt, preferred stock, and common stock that the company can use for expansion and to remain financially healthy. The key is to choose the right mix in order to maximize shareholder return. A1. Capital Structure Capital structure is generally defined as how a company finances its assets. It is measured as a percentage of debt and equity (common and preferred stock). Potential investors tend to look positively on a company that has more equity and less debt. The best capital structure approach for CBI to take is to implement the 50% Preferred and 50% Common Stock scenario. This alternative provides the best overall way to improve CBI's financial position with strong capital structure while maximizing shareholder return. A1a. A review of Canadian Bikes data over five years indicates consistently increased earnings before interest and taxes (EBIT), increased net profit, and increased shareholder returns (EPS). Offering the 50% preferred and 50% common......

Words: 5829 - Pages: 24

Wgu Jet2 Task 3

...JET2 Task 3 A. Competition Bikes, Inc. (CBI) currently finds itself in a position in which it can feasibly expand its business. As such, the company has identified Canada as a potential market into which it may expand and has further identified Canadian Biking, Inc. (CABI) as a potential avenue of expansion. Specifically, CBI is investigating whether it should merge with CABI or instead purchase the company. This report will analyze the company’s various options with regard to such an expansion and will ultimately make a recommendation as to whether merger or acquisition of CABI would be best for CBI. A1. Capital structure refers to the money being utilized within a company, and it is divided into two types of capital: debt capital and equity capital (Kennon, 2013). Debt capital refers to the percentage of the company’s capital that is borrowed, while equity capital is money provided by the company’s shareholders (Kennon, 2013). Furthermore, equity capital is represented in two types: retained earnings and contributed capital. The latter, contributed capital is the money that was originally put forth to fund the company (Kennon, 2013). These funds were provided in exchange for stakes in the company’s ownership. Retained earnings refer to the profits that have been earned and collected from previous years and put aside to be used by the company for expansion (Kennon, 2013). As CBI looks to expand into the Canadian market, it must first determine which capital......

Words: 3153 - Pages: 13

Jet2 Task 2

...JET2 Task 2 A1. Concerns There are many concerns with the budget planning for Competition Bike. From year 2006 to 2008, Competition Bike experienced a 13.3% increase in sales. In year 9, sales are projected to increase to 3510 units to give sales revenue of $5,247,450. This is a bold increase after 3400 units sold in 2008 and 4000 sold in 2007. I do not think the sales will be as robust with the economy rebounding. Sales projections should be 3425 with net sales at $5,120,375. Since the Competition Bike Company projected overly optimistic sales, there are several areas in the budget that will be affected. The areas affected are Sales Commission, Transportation Out, Advertising, Research and Development, Raw Materials, and Labor. * Sales Commission: With commissions budgeted for 3% of sales revenue, this amount is budgeted too high since the budgeted net sales is inflated * Advertising: This expense line will be incorrect due to it being based on 2% of the Gross Margin. The Gross Margin will be off due to inflated projections. * Raw Materials: Due to inflated sales projections, the raw materials cost should be lowered to reflect a realistic net sales projection. * Labor: Labor cost should be reduced due to fewer hours being used with my projection of fewer units being sold as compared to the 2009 projections. It takes 15 hours/unit, so with fewer than projected sales, this should be reduced. * Transportation Out: Since the projected sales...

Words: 2195 - Pages: 9

Jet2 Task 1

...JET2 Task 1 Horizontal Analysis Results Horizontal Analysis is defined as “a procedure in fundamental analysis in which an analyst compares ratios or line items in a company’s financial statements over a certain period of time. The analyst will use his or her discretion when choosing a particular timeline; however, the decision is often based on the investing time horizon under consideration.” (investopedia.com). This data is calculated in both dollars and percentages using data from the balance sheet and income statement. It is an extremely useful tool to evaluate trend situations. The Horizontal Analysis is used to determine Competition Bikes actual financial operating performance from years 6 through 8, with year 6 as the base year. When I looked at the analysis between years 6 and 7, I looked at the financial changes to see what the actual performance was by percentage. The net sales for years 6 and 7 showed a change of $1,495,000 which is a positive increase of 33%. This shows that sales have increased and leads the company to believe that the operating performance was also good and tha customers/dealers really like the product. There was a change of $1,048,000, an increase of 31%, for cost of goods sold. This shows that there is financial strength for the company and also shows that customers/dealers like the products. When looking at cost of goods sold, they should remain lower that the sales increase so that the company can control the cost...

Words: 5924 - Pages: 24

Jet2 Task 1

...Financial Statement Analysis JET2 Task 1 Evaluate the company’s operational strengths and weaknesses: A-1a Horizontal Analysis is defined as the following: A procedure in fundamental analysis in which an analyst compares ratios or line items in a company's financial statements over a certain period of time (Investopedia). Vertical Analysis is defined as the following: “is a popular method of financial statement analysis that shows each item on a statement as a percentage of a base figure within the statement” (Accounting, formanagerment.org). Trend Analysis is defined as the following: An aspect of technical analysis that tries to predict the future movement of a stock based on past data. Trend analysis is based on the idea that what has happened in the past gives traders an idea of what will happen in the future (Investopedia). Ratio Analysis is defined as the following: Ratio Analysis is a form of Financial Statement Analysis that is used to obtain a quick indication of a firm's financial performance in several key areas (Mathis). Competition Bikes, Inc. Comparative Income Statements Revenue Net Sales- The company’s net sales increased from year 6 to 7 by $1,495,000.00 or as the spreadsheet shows 33.3%. This is a very strong in increase. However, year 7 to 8 showed a net sales decreased of -$897,000.00 or -15%. This decrease shows a weakness, it is vital that net sales grow or at least stay even. Gross Profit- Gross profit shows an increase......

Words: 6793 - Pages: 28

Jet2 Task 1

...JET2 Financial Analysis Task 1 Western Governors University Kim Laudig, RN, BSN, MSN 11/01/2014 JET2 Financial Analysis Task 1 A1a Horizontal Analysis Results The Horizontal Analysis Results are taken from Competition Bikes’ Income Statements and their Balance Sheets. A Horizontal Analysis looks at data from one year to the next, usually over a three year span. This company’s Horizontal Analysis is comparing year six to year seven and year seven to year eight. While evaluating the company’s operational strengths and weaknesses, and analyzing the results of the Income Statement for years six, seven, and eight, there were several areas of concern. Years seven and eight shows the most areas of concern for the company. However, while analyzing years six and seven, there were some positive results for the company. During years six and seven, there was an increase in revenue. Net sales increased by 33.3% increase. The cost of goods sold also increased. This was an increase of 31.8%. The fact of increase with both of these analysis showed positive results. The increase of net sales should always be more than the increase in cost of goods. If this does not happen, than the company is spending more on parts and supplies than they are making on goods sold. This also showed the company was able to sell more bikes at a lower cost than they had to spend on the supplies needed to make the bikes. This was proven by the company showing a 37.5% increase in gross......

Words: 5846 - Pages: 24

Jet2 Task 1

...Running head: JET2 TASK 2 1 JET2 Task 2 Budgeting Bonnie Wilson Western Governors University JET2 TASK 2 A.1. Operational Strengths and Weaknesses A.1. Budget Concerns 2 Revenue from sales is budgeted too high. In year 8 Competition Bikes experienced a 15% decline in sales revenue, and yet for year 9, they have budgeted for a 3.2% increase. This is likely to be an overly optimistic projection and relies heavily on economic factors outside of the company’s control. Inaccuracy in this projection will have a negative impact on the rest of the budget. Advertising is budgeted too low. The year 9 budgeted amount of $28,412 represents a 3.5% increase over year 8, but it is still almost 20% shy of the amount spent on advertising in year 7 when sales were at an all time high. If the company is to have any hope of realizing its revenue projection, then the amount budgeted for advertising is too low. Executive compensation is budgeted too high. In year 7 executive compensation increased by $50,000 dollars. This made sense then because sales had increased by 33%. However, holding that number steady in year 8 when there was a 15% decrease, and again in year 9 when even a 3.2% increase is optimistic, is not a financially sound budgeting decision. Research and development is budgeted too low. The budgeted amount for year 9 is $85,237. While this represents the same 1.6% of sales revenue that Competition Bikes consistently allots, research and development is an investment in......

Words: 1470 - Pages: 6

Jet2 Task 1

...| Competition Bikes: Task 1 | | Jamila Mitchell | | Competition Bikes: Task 1 | | Jamila Mitchell | Western Governors University JET2 Financial Analysis Western Governors University JET2 Financial Analysis Competition Bikes: Task 1 Jamila Mitchell Operational Strengths and Weaknesses Horizontal Analysis To evaluate changes in financial statements, a horizontal analysis is necessary so the company can determine whether there is positive or negative growth over time. The changes in percentages is calculated and decisions are made according to the increases or declines. Competition Bikes: Year 7 Overall, year seven was a successful year for the company based on the horizontal analysis of the following financial aspects. Revenue Net sales went from $4,485,000 in year six to $5,980,000 in year seven, an increase of $1,495,000 or a 33.3% increase. The cost of goods sold in year six was $3,294,000, which increased to $4,342,000. This increase of $1,048,000, or 31.8%, was expected considering the increase in net sales. The cost of goods sold remained less than net sales, so this is a strength for the company. While both net sales and cost of goods sold increased, there was still a balance between the two. This shows that the company sold more products at a lower cost, which also attributed to the 37.5% increase in growth profits. Total Selling Expenses Total selling expenses increased from $299,220 in year six to $397,960 in year seven. This......

Words: 5232 - Pages: 21

Jet2 Task 4

...JET2 - Financial Analysis - Task 4 JET2 – Task 4 A1. Costing Method Costing is used in business accounting strategies as a way of determining cost of manufacturing a product in relation to the revenue generated by that product. Costing systems determine the overhead of production and then allocate those overhead costs to a business’s product. There are two common methods for allocating these indirect costs to products, traditional costing and activity based costing. Both of these methods assess overhead costs and then attach these costs to products based on certain cost drivers, “a factor that causes cost to incur, such as machine hours, direct labor hours and direct material hours (Johnson 2014).” The first of these methods is Traditional Costing. This costing method drops all overhead costs into one bucket and then disperses them across three drivers, units produced, labor, and machine hours. Although this method works well for lines that are similar and consistent, one of its drawbacks is that this method does not account for customization requirements and overall complexity of the lines. So the company ends up allocating the same cost drivers across all production lines. The second method is Activity Based Costing. Activity based costing on the other hand, utilizes multiple cost pools as it relates to overhead costs based on resources used. Overall, this is a better cost system methodology for the company as it allows for the customization and specialty......

Words: 2113 - Pages: 9

Jet2 Task 2

...Stacy Raudman 000202145 JET2 Task 2 A1 Discuss budgetary areas that raise concern in the budget planning In any business, a budget serves a specific purpose. It serves as a forecast of money coming in and money going out which then shows whether or not there is a profit. It also serves as a tool for making decisions. And, lastly, it is a means to monitor how a business is performing. Watching for profits and/or losses, will tell a company if their strategies are working or not and whether they should move in a different direction for improvement. Money, in any business, needs to be controlled and decisions need to be made on where is best for that money to be spent in the best interest of the company. Monitoring how a business is performing can tell management or investors if the company is living up to their expectations. If it isn't, the company can have the opportunity to move in a different direction for improvement. In reviewing the budget and proforma statement for Competition Bikes, there are a few areas of concern which are discussed below. In 2006, the company sold 3000 units and had a nice increase in sales in 2007 to 4000 units. In year 8 however, there was a decrease in sales down to 3400 units. The company is forecasting sales in 2009 to be 3510 units and continuing increasing the following two years as well. Due to the stated economic decline and cut back on sponsors that pay for bikes for professional riders, the company is......

Words: 1665 - Pages: 7

Harley and the Davidsons | Trọn Bộ Thuyết Minh Ngi Nh Nhỏ Trn Thảo Nguyn :Phần 6 Little House On The Prairie :Season 6 1979 | Regina King