Custom Snowboards Expansion Case Study

1081 WordsFeb 7, 20184 Pages
Part 1 Summary of Key points Custom Snowboards, Inc., a Delaware Corporation operating out of Minneapolis, Minnesota, designs and manufactures one of the most durable and reliable snowboards offered. They have made their reputation through an almost unheard of 36-month guarantee against breakage with a free replacement warranty. The company is trying to borrow $1million in order to expand into the European market. Summarizing their financials, we find: The company has a fairly moderate Gross Profit marking of 30.4%, fairly steady over the past three years; and is able to handle its present expenses. Twenty percent of its business currently comes from the European market in which, despite the economic downturn, has been growing slightly. Additional capital would provide a strong investment into an already robust and growing market. The company's current ratio is 6.1, or its assets exceed its liabilities by six times. This figure varies by industry, but shows that the company is liquid enough to meet its needs. The industry standard for inventory turnover is 30.4%; CSI had an average of 33.37 in years 13-14. Essentially, this is a small weakness, meaning it is taking CSI an average of 3.5 days longer to turn inventory into a finished product. CSI's operating margin in at 1.8%, down from 3.4%, and off industry standards of 5.14%. Accounts receivable decreased from $203,343 to $195,132 (-$8211 or 4%); but 2.6 times current accounts and notes payable. CSI can certainly

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