Competition Bikes Summary Report
Sherri Silva
Western Governor's University

Abstract Competition Bikes, Inc. is a successful business that makes bikes for professional cyclists helping them to live their dreams and compete in major cycling events to include triathlons and other competitive cycling sports. After three years in business, Larry Ferguson, the business owner decided to take the company public in efforts to gain the capitol needed to build the current two manufacturing facilities. Both facilities are staffed to manage an increase in bike sales if necessary. Competition Bikes, Inc. is unique in that it really honors the quality and design of the bike being sold. Money is spent on research in efforts to ensure the lightest most custom bike is offered to its customers. The company also invented the CarbonLite which was the first designed bike to offer drive shaft technology. Although Competition Bikes, Inc. has experienced tremendous success over the past eight years in business, they have also experience a 15% sales decline over the most recent years. It is imperative that a financial analysis take place in efforts to trend where the financial issues are arising from allowing Competition Bikes, Inc. to explore other means of increasing profit margins.

In completing a financial analysis for Competition Bikes, Inc. one must analyze financial data to include performing a horizontal analysis. This type of analysis is designed to show trends or changes between years in both dollar and percentage form. Showing changes in percentage form allows for better perspective in regards to the significance of financial change between years. In performing a horizontal analysis (current year minus base year divided by base year), the balance sheet as well as the income statements must be assessed. There are several trends noted when analyzing the income statement.