Financial Analysis

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An analysis was conducted on the financial statements of Custom Snowboards, Inc. for consideration of a 5-year-loan with our institution. Financial statement line items, risk assessments, and ratios were all examined with pertinent items that need to be considered are included in this report, and if granted the loan, can track the progress of the company’s ability to repay the loan.

The financial statement line items of Custom Snowboards, Inc. were analyzed focusing on areas that were influential in determining the risk factors of extending a 5-year-loan to the company by assessing these bottom line issues: (1) the company’s ability to make money, profitability; (2) the company’s ability to pay it’s bills, liquidity
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Decreasing their debt is strength as there is an increase in available funds that can be used for methods to increase sales and also the ability to repay a loan if granted.

* Current assets increased year 12 to 13 from $738,690 to $880,950, an increase of $142,260 (19.3%). It decreased year 13 to 14 from $880,950 to $740,155, a decrease of $140,795 (16.0%). This is a strength for the company as it was able to increase its current assets and operating cash flow year 12 to 14, increasing funds available for loan payments.

Of the featured financial statement line items that the institution needs to take into consideration, there are risks with mitigation options that need to be considered are as follows:

* Net sales * Risk: sales decreasing in year 14 $225,400. This could be due to the saturation of their current market, with many riders now using the company’s snowboard, resulting in the sales decrease. * Mitigation: address the product, price, place of sale and promotions. Ensure that this is a product that the public wants by holding focus groups of potential customers and/or survey existing customers. Examine the competition and focus a sales pitch based on what the public wants. Reevaluate the product to see if there are modifications that need to be made. Prices should be considered and adjusted as needed but with caution as with a price increase the product can be viewed as upscale, and cheap if
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