...Accounting & Finance: Weeks 1-3 Class | Tutor | Classroom | Campus Map | AF A1 | Iwona Winiarska-Pringle | Adam Smith 1101 | D8 | AF A2 | Aneta Keska | Adam Smith 1102 | D8 | AF A3 | Keith Delves | Adam Smith 717 | D8 | AF A4 | Damien Kerr | 25 Bute Gardens, room 130 | D17 | AF A5 | Joyce Laird | Sir Alexander Stone 206 | D5 | AF A6 | Duncan Minett Westwood | Sir Alexander Stone 403 | D5 | AF A7 | James McCallum | Sir Alexander Stone 404 | D5 | AF A8 | Rachel Elmslie | 11 University Gardens, room 201 | D15 | AF A9 | Vasiliki Papaionnou | 2 University Gardens, room 208 | D15 | AF A10 | Iain Gallacher | 3 University Gardens, room 202 | D15 | AF A11 | Gerry McLellan | 4 University Gardens, room 101 | D15 | AF A12 | Carol Irvine | 7 University Gardens, room 101 | D15 | AF B1 | Iwona Winiarska-Pringle | Adam Smith 1101 | D8 | AF B2 | Aneta Keska | Adam Smith 1102 | D8 | AF B3 | Keith Delves | Adam Smith 717 | D8 | AF B4 | Damien Kerr | 25 Bute Gardens, room 130 | D17 | AF B5 | Joyce Laird | Sir Alexander Stone 206 | D5 | AF B6 | Duncan Minett Westwood | Sir Alexander Stone 403 | D5 | AF B7 | James McCallum | Sir Alexander Stone 404 | D5 | AF B8 | Rachel Elmslie | 11 University Gardens, room 201 | D15 | AF B9 | Vasiliki Papaionnou | 2 University Gardens, room 208 | D15 | AF B10 | Iain Gallacher | 3 University Gardens, room 202 | D15 | AF B11 | Gerry McLellan | 4 University Gardens, room 101 | D15 | AF B12 | Justin O’Hagan...
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...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. Even...
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...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 line...
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...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 anticipating...
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...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...
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...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 structure...
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...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 stock...
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...Task 5 JET2 Financial Analysis CFO Report for Custom Snowboards Custom Snowboards is a worldwide company that is just starting to reach it more mature years as an organization. The company currently spans from Minneapolis to Canada as well as Europe. The company currently wishes to expand and it appears that they are financially ready to do so. Although there are risks as with any expansion but these should be resolved before any expansion takes place. The company is currently ready to get a loan from the bank for $1,000,000 in order to finance this expansion. A1. There are several different key points that will be addressed in this section; they include details on, decreasing operating income, increased profits, lowering net earnings, and increasing profits. The balance sheets will show the investments, accounts payable, the decreasing long term liabilities, as well as increasing total liability, and company equity. Each of these key points is important to a company so that they can show they are able to have liquid assets as well as be profitable in the future. Starting with the company’s gross profits for tear 12 were $2,053,100, $1,920,800 in year 13 and $1,945,300 by year 14. As you can see these gross profits fluctuated these years due to net sales initially going down in year 13 and the up again by year 14; this was a minor fluctuation for the company as it only netted them a 5.5% loss over the three year period, and the associated expenses related to this loss...
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...Andrea Y. Heard Western Governors University JET2 – Task 5 - Financial Analysis Chief Financial Officer Presentation Mentor, Business: Carl Israel, MBA October 10, 2013 A1. Key Points Custom Snowboards, Inc. would like to present financial statistics in an effort to secure funding for an expansion project into Europe. There has been considerable growth in the percentage of sales and a substantial increase in revenue. The company is requesting capital debt in the amount of $1 million to fund the extension project. Future sales are expected to continue to surge, allowing for an inflow of revenue to meet the needs of both Snowboard and the lender. A horizontal analysis will reveal data of the company’s profitability, liquidity and solvency over a three year period that will assist with the approval process. The results of the analysis will reveal key points that will confirm the company’s ability to successfully expand into Europe while continuing to provide maximum shareholder returns. Profitability A measurement of Snowboard’s profitability will divulge a picture of the financial health. A breakdown of the income statement will show income and expenses during each business year for a three year period. “The results of the profitability analysis will display how profit was earned in relation to sales, total assets and net worth.” (Hunt, 2013). · Net Sales “Custom Snowboards finance team is well...
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...Jet Task 5 Western Governors University JET2 – Task 5 - Financial Analysis Chief Financial Officer Presentation A1. Key Points Custom Snowboards, Inc. would like to present financial statistics in an effort to secure funding for an expansion project into Europe. There has been considerable growth in the percentage of sales and a substantial increase in revenue. The company is requesting capital debt in the amount of $1 million to fund the extension project. Future sales are expected to continue to surge, allowing for an inflow of revenue to meet the needs of both Snowboard and the lender. A horizontal analysis will reveal data of the company’s profitability, liquidity and solvency over a three year period that will assist with the approval process. The results of the analysis will reveal key points that will confirm the company’s ability to successfully expand into Europe while continuing to provide maximum shareholder returns. Profitability A measurement of Snowboard’s profitability will divulge a picture of the financial health. A breakdown of the income statement will show income and expenses during each business year for a three year period. “The results of the profitability analysis will display how profit was earned in relation to sales, total assets and net worth.” (Hunt, 2013). · Net Sales “Custom Snowboards finance team is well aware that sales are an important factor in determining profitability.” (Hunt, 2013). During period from year 12 to year 13, net sales increased...
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...Western Governors University Strategic Management Tutorials JET2 Financial Analysis (V2 GRADUATE-0212) JGT2 Decision Analysis (V2 GRADUATE-0710 Competition Bikes, inc, Executive Summary Report * Skip to Navigation * Skip to Content ------------------------------------------------- Top of Form Bottom of Form Horizontal, Vertical, Trend and Ratio Analysis The assessments of the financial health of Competition Bikes, Inc. (CB) are derived using the attached income statements and balance sheets. Focusing on calendar years # 6, 7 and 8 to gauge the growth and stability of this company. Between the years # 6 and 7, Competition Bikes, Inc. had a significant growth in new earnings that was not extended on into year # 8. The net earnings moved from a positive 313.4 % to a dramatic loss of 81.6% . A.1.a) Horizontal Analysis Results Horizontal Analysis is a direct comparative analysis of each line item across the same time frames of a particular company. It is calculated in dollars and percentages. An analysis will look at how the accounts have fluctuated from one year to the next. The formula used is: Dollar change = This Year’s Balance – Last Year’s Balance. Percent change = Dollar Change . The income statement from year # 6 to year # 7, exhibited a sales increase of 33%. There was only a 31 percent increase in product costs. This decrease in cost of materials was offset by sales expense of 33 percent and an increase in general...
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