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Custom Snowboards

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Submitted By bwillhite
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Custom Snowboards Inc.

A1: Key Points Looking at the Balance Sheet Horizontal Analysis for Custom Snowboards, the Total Current Assets increased from year 12 to year 13 by $178,080 or 23.6%. This includes Cash and Cash Equivalent increasing by $138,171. This shows there was an increase in Sales and some Accounts Receivable being collected. Bankers are interested in this account as it shows them how the company is doing in Sales. Short Term Investments increased by $30,000, which tells me that Custom Snowboards needed to take out a small loan to cover purchasing materials to manufacture the snowboards or to cover other expenses. Bankers need to know how much money, whether it is Short Term or Long Term loans, a company takes out for the business. Accounts Receivable increased by $483 dollars. This could be due to either a slight increase in Sales, collections on Accounts Receivable (A/R would be higher if there were not any collections), or both. Accounts Receivable is important to a bank since they will need to know how much you have allowed to be purchased on credit, and if you are collecting on the debts in a timely manner. Total Liabilities decreased by -$54,820 dollars or -5.5%. Although Accounts and Notes Payable increased by $180 (0.2%), Mortgage Payable decreased by -$50,000 (-6.3%) and Other Long-Term Liabilities decreased by $5,000 (8.3%). Retained Earnings increased $132,900 (81.9%). Taking into account these changes, Total Liabilities and Equity increased $78,080 (4.5%) from year 12 to year 13. This is good because it shows the banker the company is capable of paying their bills, but the company will have to explain why the Accounts and Notes Payables increased. Staying with the Balance Sheet Horizontal Analysis for year 13 to year 14, Total Current Assets decreased by -$24,605 (-2.6%). A decrease in Total Assets usually raises a red flag to

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