A1.a. Horizontal Analysis Results Competition Bikes, Inc. has seen a rather large decrease in net sales from the current period (years 7 and 8) versus the period before (years 6 and 7). The decrease is attributable to the current economic situation. The company expects unit sales to increase over the next three years but to still stay below the high unit sales figure of the 4,000 units sold in 2007. While sales have decreased, the cost of goods sold as a percentage to net sales has remained
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statements over a certain period of time. The analyst will use his or her discretion when choosing a particular timeline; however, the decision is often based on the investing time horizon under consideration” (Investopedia, Horizontal Analysis, para. 1). According to the Income Statements Competition Bikes, Inc. was strong in many areas from year 6 to year 7. Net sales increased by $1,495,000 from Y6 to Y7 which is a 33.3% increase. When looked at with the cost of goods sold which increased only
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Horizontal analysis results After reviewing Competition Bikes Inc.’s financial statements I was able to analyze the different trends occurring within the company and discuss operational areas of concern. Overall net sales saw a significant increase from years 6 to 7 of 33%, but then fell 15% from years 7 to 8 which resulted in a decrease of $897,000 of revenue. The decrease was attributed primarily to the current economic situation. It looks like the company adjusted properly with the loss
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Horizontal Analysis Horizontal analysis is one of the two main ways to analysis the financial statements of a business. This analysis provides a year to year look at the financial performance of the business being evaluated. The spreadsheet that is attached provides a horizontal analysis of years 6, 7, and 8 for the balance sheet and income statement for Competitive Bikes and Two Wheel Racing. The horizontal analysis can take into account either the dollar amount of the changes over the years or
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A3. Internal Controls Competition Bikes manages their operations by producing and keeping inventory of raw materials in order to produce their bikes according to monthly forecasts and budgets. The purchasing department looks at inventory each month and purchases from the low cost supplier based on the needs for the upcoming month. The parts, once received, are sent to production, and if not used for during the month, are sent back to raw material inventory on the last day of the month so
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Managing Internal Cost and Controlling Finances JET Task #2 Competition Bikes, Inc. Budget Process Budgets are used for forecasting future business growth and outcomes. Providing a comparison between a forecasted budget with previous year’s actual results allows leadership to strategize and plan for the company’s future on past performance. Producing a master budget roadmap for future operations may be done in two ways--by using fixed budget or flexible budgeting processes. There are
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Horizontal Analysis Horizontal analysis is one of the two main ways to analysis the financial statements of a business. This analysis provides a year to year look at the financial performance of the business being evaluated. The spreadsheet that is attached provides a horizontal analysis of years 6, 7, and 8 for the balance sheet and income statement for Competitive Bikes and Two Wheel Racing. The horizontal analysis can take into account either the dollar amount of the changes over the years or
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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
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Financial Analysis – JET2 Task 1 Report for Competition Bikes, Inc. Competition Bikes, Inc was formed in 2001 and manufactures professional and performance bicycles used in a variety of racing events for expert riders. Bicycles produced by this company are ridden by 60% of all race winners and word of mouth has been their main marketing strategy. Competition Bikes is also the first company to use drive shaft technology in their bikes, which sets them apart from their competitors. A horizontal
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This paper is to be used as a reference only. Do NOT submit as is because it will not pass turnitin. Financial Analysis – JET2 Task 1 A.1.a. Horizontal Analysis Results Comparative Income Statements Revenue - Years 6 and 7: Net sales increased 33.3% showing significant boost of sales compared to prior year. Cost of goods sold also increased by 31.8% related to increased sales volume. Gross profit rose 37.5% commensurate with the substantial increase in net sales. Overall, this data
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