A1. This financial analysis is for Competition Bikes that was taken from balance sheets and income statements from years 6, 7 & 8.
A1a. Horizontal Analysis
Strengths
Net Sales – totaled $4,485,000.00 for year 6, and grew +33.3% or $1,495,000.00 between years 6 to 7.
Cost of Goods Sold – totaled $3,294,000.00 for year 6, and from years 6 to 7 grew +32.8% or $1,048,000.00.
Sales Commissions – totaled $134,550.00 for year 6, and from years 6 to 7 grew +33% or $44,850.00.
Gross Profit – totaled $1,191,000.00 for year 6, and from years 6 to 7 grew +37.5% or $447,000.00.
Strength is shown in these positive amounts from the income statement because they reflect positive growth. Year 6 to 7 (according to a Horizontal Analysis) is definitely the most profitable. Because the Sales Commissions and Cost of Goods sold were equal to or less than 34%, allowing for profit to take place and sending acceptable numbers of capital to employee compensations and investment.
Spending on Advertising – totaled $23,820.00 for year 6, and from years 6 to 7 increased +37% or $8,940.00. Because sales grew with it, we consider that a strength.
Distribution Network Support – totaled $44,850.00 for year 6, and from year 6 to 7 increased +33% or $14,950.00. Because business and the progress in the distribution network, this is a strength, and critical in moving product to the customer.
Transportation Out – totaled $90,000.00 in year 6, and in year 6 to 7 grew +33% or $30,000.00.
This reflects the condition of the economy and was demanded in the different areas of movement and delivery of merchandise to our clients. The price of gas also affected Transportation Out yet had nearly zero interference with sales gain.
Utilities – total was $130,000.00 in year 6, and from year 6 to 7 grew 3.8% or $30,000.00.
This is strength as the amount of business completed should have