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RXM1: Business Performance Report
Carbon Cycles
Business Performance Report
Student ID: 010779249
Date: 06/07/2023
C1. Business Overview
Carbon Cycles is a new business specializing in 3D custom carbon fiber bicycles. Our target segments are recreational and speed bicycles, but we also provide mountain bicycles. We started as a single store front in New York City and have expanded into Amsterdam and Bangalore. We will soon be expanding into Rio de Janeiro, as well. We utilize just-in-time inventory because all of our bicycles are customized to each customer’s unique measurements. By utilizing carbon fiber to 3D print our bicycles we are able to keep the bicycles light-weight and budget friendly.
C2. Financial Analysis
Pricing
Carbon Cycles utilized rebates on some of our bicycle models. We made the decision to use rebates in order to draw in more customers. I believe in the beginning we were underpricing our bicycles. The price judgement from Q2 was 100 for almost all of our models. We went from a gross profit of $39,259 in Q2 to a gross profit of $2,839,459 by the end of Q6. We continued to utilize the rebates while steadily increasing the price of our bicycles so as to not shock our customers with a rapid increase in the price of our products. Research and Development
Research and Development is important to the success of all businesses, either in the baby stages or a decade’s old business. Carbon Cycles decided to make a larger investment in Research and Development around Q4 with an expense of $722,723. This brought our total expenses to $1,318,414 in Q4, but we were able to nearly double our gross profit in Q5 in response to the higher investment in Research and Development.
Loans and Cash
As you can see from the Balance Sheet, Carbon Cycles did not take out any conventional bank loans or emergency loans for the life of our business. Because of this decision, Carbon Cycles was able to operate without going into debt. We were able to turn a gross profit of $2,839,459 by the end of Q6. Had we taken out a conventional bank loan or emergency loan
our gross profit would have been much lower due to the increased debt expense. C3. Ethical Decision-Making
During all 6 quarters Carbon Cycles was able to pay the employees above the industry standard salary. We provide an excellent paid-time off incentive of two weeks, which is a full week above the industry standard. We were slightly below the
average industry on our health benefits and pension, but we were able to increase PAGE 1
RXM1: Business Performance Report
Business Performance Report
the health benefits to an expanded package in Q4. Our pension was also increased in Q4 and Q6 to put us at a more competitive edge. Carbon Cycles staff was satisfied with the compensation package and ended Q6 with a satisfaction rate of 82.5%. I believe this was a fair business practice and the increase to expanded health benefits was a great ethical decision based on the rights and well-being of the workers.
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