JET 2 Task 3 Deborah U. Myers The definition of capital structure is a “combination of a company’s long term debt, specific short term debt, common equity, and preferred equity, the capital structure is the firm’s various sources of funds use to finance its overall operations and growth. Debt comes in the form of bond issues or long-term notes payable, whereas equity is classified as common stock, preferred stock, or retained earnings. Short-term debt such as working capital requirements also
Words: 2575 - Pages: 11
Financial Statement Analysis JET2 Task 1 Evaluate the company’s operational strengths and weaknesses: A-1a Horizontal Analysis is defined as the following: A procedure in fundamental analysis in which an analyst compares ratios or line items in a company's financial statements over a certain period of time (Investopedia). Vertical Analysis is defined as the following: “is a popular method of financial statement analysis that shows each item on a statement as a percentage of a base figure
Words: 6793 - Pages: 28
EXECUTIVE SUMMARY The purpose of the following report is to evaluate Competition Bike Inc. operations and the possible direction of the company in the next few years. Figures were obtained from comparative balance sheets and profit and loss statements from the relevant years as well as additional information that were forwarded for review. This information enabled the development of percentage and ratio analysis, which was then used to create the report. Administrative expenses were indirectly
Words: 3717 - Pages: 15
Jet2 task 3 Competition Bikes, Inc.Financial AnalysisJET2 Task 3 Introduction Competition Bikes, Incorporated (CBI) has decided to weigh their options for expansion into Canada by either acquiring or merging with Canadian Bikes, Inc. This report will discuss the proposed expansion and make recommendations based on the company's capital structure. Capital structure can be described as how a business finances its assets. There are two main types of capital: Equity and debt. Capital structure
Words: 5829 - Pages: 24
Financial Analysis (COURSE CODE: JET Task 1) A1 a. Horizontal Analysis Results Income Statement Based on the review of Competition’s Bike’s Horizontal Analysis, revenue shows a decline of $897,000 or 15% in Year 8 compared to Year 7. The decline was mainly due to the current economic conditions. This also resulted in the decline in gross profits by $266,600 or 16.3%. The selling expenses of the company fell by 14.9%, compared to a 16.3% decline in the gross profits from year 8 to
Words: 4547 - Pages: 19
Task 3 A1. Recommend a capital structure. Capital structure is defined as " how a firm finances its overall operations and growth by using different sources of funds."(investopedia.com). In order for Competition Bikes Inc to expand to Canada, it has to choose the best method that will maximize shareholder return. In order to do this the company has to have a capital structure that is sufficient enough to be able to increase its cash flow, pay its debts, and have a return on its investments
Words: 3452 - Pages: 14
RJET Task 1 A. Prepare a summary report in which you do the following: 1. Evaluate the company’s operational strengths and weaknesses based on the following: a. Horizontal analysis results Horizontal analysis is to determine dollar and percentage changes by comparing financial statements. (Investopedia.com, 2011) Between years 6 and 7, Competition Bike Inc.’s net sales increased 33.3% at $1,495,000. Between years 7 and 8, net sales of the product decreased 15.0% with a loss of $897,000
Words: 4615 - Pages: 19
Rachel Johnson Addy JET Task 2 March 29, 2014 JET Task 2 1. A budget is an itemized estimate of expected income as well as estimated expenses over a specified period of time. The reason to design a budget is to regulate spending. There are multiple causes of concern with Competition Bikes budget plan. The main cause for concern is that the sales estimated for year 9 is 3,510 units. This estimate is not supported by past sales data. Due to the current economic status, the amount of units sold
Words: 1749 - Pages: 7
competitiveness and overall stability of the Competition Bikes, Inc. based on their finance statements. This analysis provides information based on working capital, horizontal analysis, vertical analysis, ratio analysis and trend analysis. This analysis provides essential information on forecasting budget limits and overhead expenses based on overall sales potential. The analysis is based on the last three fiscal years of data provided by Competition Bicycles, Inc. A.1.A. : Horizontal Analysis A horizontal
Words: 4486 - Pages: 18
Requirements for Task 1: A Prepare a summary report in which you do the following: 1) Evaluate the company’s operational strengths and weaknesses based on the following: a) Review the horizontal analysis, analyze the results, and discuss operational areas of concern. “Horizontal analysis of financial statements involves comparison of a financial ratio, a benchmark, or a line item over a number of accounting periods. This method of analysis is also known as trend analysis
Words: 10434 - Pages: 42
