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.

Total assets decreased over 7% for both year to year comparisons. This is a weakness. Decreased assets demonstrate a decreased worth for the company.

Total liabilities increased 1.2% from year 6 to 7 and decreased 1.9% from year 7 to 8. This demonstrates strength in the company because the last year they lowered their total liabilities which increases their worth.

Retained earnings