Custom Snowboards Inc. Managing Capital & Financial Assets 04/19/2014 WGU JET2 Financial Analysis Task 5, Part I - PASSED To: Vice President for Chief Financial Officer (CFO) The following is a summary report is an analysis of the current financial statements of Custom Snowboards Inc. The company wishes to be considered for an extended long term loan for a European expansion. We have arrived at a selection of key financial statement line items, conducted a risk assessment, and ratios and if the loan is granted, analysis on how to track the progress of the company’s ability to repay the loan. Financial Statement Analysis Income statements and balance sheets were reviewed to summarize the following key points that could …show more content…
The other risk is the increase in compensation. Maintaining highly qualified and trained staff may be what the company needs. Custom Snowboards will need to ensure employees stay motivated to produce inventory and drive sales. A commissioning program could be implemented in addition to salaries or awards based on performance and higher net sales. Custom Snowboards can minimize risk by continuing to grow sales and reinvesting into the company. Expansion to Europe is one way. Another is to invest money into research and development, and marketing. No increase in research and development happened in the past three years and could prove beneficial to the company. Website create and maintenance can also be used to mitigate risks. A well working website can bring in more sales and possible reduce the compensation budget as employees leave through natural attrition. Another way the company can impact liquidity and mitigate risk is by paying debts on time and as soon as possible. This lowers interest and saves the company money it can be investing in short-term investments. Collecting outstanding debts is also an important way to mitigate risk. Custom Snowboards can maintain its accounts payables increase without increasing portion of long-term debt. The company can mitigate the risk of accounts receivable not paid on time by ensuring products are delivered on time, properly invoiced, and accurate goods. Accounts receivable should be paid under 30
In accounting there is much to be learned, about the financial aspects of a business. In the past five weeks I have learned the importance of financial reports and how they relate to the success of an establishment. These reports may include balance sheets and income statements, which help accountants and the public grasp the overall financial condition of a company. The information in these reports is really significant to, managers, owners, employees, and investors. Managers of a business can take and deduce financial
11. Investors and creditors are particularly interested in this financial statement because it tells them what is happening to the company’s most important resource?
A1. Budget Concerns Competition Bikes budget has several areas of concern that need to be address. 1. Units expected to be sold for year nine is 3510. Competition Bikes is predicting that they will sell 3510 Bikes but they only sold 3400 Bikes in year eight down 15% from year seven 4000 units sold. Competitions Bikes has budget to high because the current economic down turn is showing no signs of relief for the next three years. Many of Competition Bikes customers are sponsored riders and many sponsors have pulled their funding to their rides. Competition Bikes has not presents a plan that would support their projections. Competition Bikes should lower there should lower the expected units sold so not to over order raw materials that will
Snowboards had a cash and cash equivalent of 83.8% during year 12 and year 13, but that
The income over the last three years has been fluctuating.. This tells us the company has an initial growth period. Sales also drop between years 7 and 8 and the gross profit margin decreased as well. This may be due to operating expenses. This leads to the prospect of stable future sales. The stakeholders are continuing to back the company and the company does predict sales will remain stable. The modest increase in sales does not show enough to recover without making adjustments to free capital.
1. Visit the website of a large national bank, regional bank, or credit union, and use the information you find there to answer the questions below. EXAMPLE: Some large banks you might consider include Bank of America®, JPMorgan Chase®, Wells Fargo®, Citibank®, and U.S. Bank®.
f) To evaluate the material misstatement in the accounts, I think both of the consolidated income statement and the three financial statements are useful. We need to use the information properly from all the financial statements. However the consolidated income statement is the most useful one. If there is a significant change in an account balance comparing with preceding two years, the auditor will examine whether there a material misstatement exists. For instance, the bad debt expense as a percent of net sales in 2011, 2010 and 2009 are 0.56%, 0.70% and 0.69%, respectively. There should
I have reviewed the past two years liabilities and stockholders’ equity sections of Tootsie Roll Industries, Inc. and compared the balance sheets using Debt to Equity Ratio and Times Interest Earned. The calculations presented in thousands:
The CEO of Dynamic Manufacturing was at a conference and talked to a supplier about a new piece of equipment for its production process that she believes will produce ongoing cost savings. As the Operations Manager, your CEO has asked for your perspective on whether or not to purchase the machinery.
The financial statements are showing that the firm is fiscally sound. This helps executives to capitalize on new opportunities in order to increase the company's earnings. For example, three important areas which are showing how the firm is enhancing their profits margins are in the sales, net earnings and dividends per common shareholder from 2010 to 2012. ("Built to Deliver," 2012)
Reports the variance in the main income statement and balance sheet accounts and the reasons thereof.
All of the primary comparative financial statements were audited, namely the Consolidated Balance Sheet, the Consolidated Statement of Earnings, the Statement of Stockholders Equity and Comprehensive Income and the Consolidated Statements of
The “financial statements are formal reports providing information on a company's financial position, cash inflows and outflows, and the results of operations” (Hermanson, p.22). There are four main components that make up a financial statement. The four parts are, balance sheet, income statements, cash flow and, statement of owner’s equity. The balance sheets role is to define the company’s assets liabilities and revenue of the business. The income statement shows the income within the company. Cash flow reviews the position of the company by cash payments and receipts. Lastly, the statement of owner’s equity shows the amount of earnings, stock and other capitals of people in the company. (Hermanson, p.34-35).
To overcome this weakness, they need to focus their attention on what will drive the market share up as well as their sales. To make this come to life, the new Risk Management system will need to address the budget weakness and any other weaknesses or opportunities in order to improve the marketing and other areas in the company. This may result in budgeting more money to use new technology to overhaul the system instead of building as many new products as they normally do.
Sprint has been affected by a number of factors over the past few years, and continues to be vulnerable to many financial threats. When evaluating the company’s vulnerability to current financial