A.1 Throughout this paper, the “Competition Bikes Inc. Storyline” case study will be used to prepare a summary report based on the evaluation of the company’s operations.
The objective will be to evaluate the company’s operational strengths and weaknesses based on the following:
a. Horizontal analysis results
b. Vertical analysis results
c. Trend analysis results
d. Ratio analysis results
As defined by Business Dictionary (2014) Horizontal Analysis is ” Comparative study of a balance sheet or income statement for two or more accounting periods, to compute both total and relative variances for each line item.” Competition Bikes Inc. will be analyzed in each area in regards to years 6, 7, & 8. Analyzing the strengths and weakness of
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Lastly, a major strength of the Vertical Analysis is the year 7 Accounts Receivable, net listed at $717,600, 16.7%. This is a major strength for Competition Bikes Inc., meaning they have a positive cash flow and very efficient, strong credit collection policy. Competition Bikes Inc. also experienced weakness in regards to the Vertical Analysis. Firstly, Total General and Admin Expenses for year 8 are significantly higher than from year 6 and 7. The dollar figure is $935,119, at 18.4%. The larger the expenses are the less total revenue Competition Bikes Inc. will have at years end. Another noted weakness of the Vertical Analysis is the Accounts and Notes Payable for year 8. This is a significant increase from years 6 and 7 at $261,200, 6.1%. A much higher liability compared to previous operating years. Competition Bikes Inc. must carefully manage this area of spending to guarantee a successful operation moving forward.
Investopedia (2014) defines Trend Analysis as “an aspect of technical analysis that tries to predict the future movement of a stock based on past data. Trend analysis is based on the idea that what has happened in the past gives traders an idea of what will happen in the future. There are three main types of trends: short-, intermediate- and long-term.” Firstly, discuss the strengths of the Trend Analysis for Competition Bikes Inc. From year 6 to year 7, there was a strong growth in regards
Starting from a company of less than 75 workers and owning less than 20,000 SCU for production, research, quality assurance and conduct warranty work Off The Chain Bikes has doubled the plant capacity and hearing doubling the workforce within two short years. The company is successful by targeting and capturing lucrative market shares by heavily investing in the desired technical specs and design styles of one of the most influential Racing bikes. Our keen ability to thoroughly research market demands, predicting competitive strategies between the four market majority shareholders by reviewing and interpreting the marketing reports and our aggressive design and development plans have significantly increased our market share and increase shareholder value. Our core competencies and strategic goals will be realized by carefully following our established plans and aggressively price our bikes to increase total market share.
1. Evaluate key elements of the selected production or service organization’s operational efficiency with its operational strategy. Determine three (3) tasks that do not align with the operational strategy. Determine the weaknesses that are evident in each task.
Horizontal refers to the idea of one firm joining with another at the same stage of the same production process. It also allows for greater market share; achieves economies of scale; and an opportunity to enter a different market segment. An example of this would be Ford’s takeover of Volvo - both being car manufacturers.
1. Evaluate key elements of the selected production or service organization’s operational efficiency with its operational strategy. Determine three (3) tasks that do not align with the operational strategy. Determine the weaknesses that are evident in each task.
As shown in Exhibit, profitability has been a concern to Kootenay - gross margins are below industry average of 28-50% for its complete bike products (Entrée; -0.83%, Dlux; 7.76%, and Ultra;-6.73%) where materials have represented a high percentage of the costs (58 – 74%). Selling frame alone has shown stronger profitability (23.33%) but overall returns needs to be improved (ROA/ROE are -14%/-22%).
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
Determine the impact of the company’s mission, vision, and primary stakeholders on its overall success.
Competitive analysis main objective is to research, analyze, and compare the competition in relation to the company. Analytical tools used for competitive analysis include the five forces framework, value net, driving forces, strategic groups, competitor analysis, and key success factors are analytical tools. The competitive analysis will enable the trucking company to understand more about the industry and the competition, to be able to develop a competitive strategy that will give the company a competitive advantage by taking into account the actions and responses of the competitions (Thompson, Peteraf, Gamble & Strickland, 2016).
1. Evaluate the strengths and weaknesses of the balanced scorecard in this type of an organization.
This is the assessment of the historical and future performances of the two companies in order to fully project internal and external factors that will affect the forecasts. The purpose is to identify trends, year to year changes, in order to assess whether the two companies’ performance are stable or sporadic and highly volatile.
It is always important to know the value, strengths, and weaknesses, of a company to make proper assessments
There are three basic financial statement analysis, which consist of Horizontal, Vertical and Ratio (Edmonds, Tsay, & Olds, 2011). Each analysis play a very important part by allowing the company to see how the company is functioning daily. The Horizontal analysis is a trending way to compare multiple accounts over a monthly or year period. Being able to compare overall performance of different accounts will be very beneficial for the organization.
The cycling industry has grown in the last couple decades in becoming a successful business. In the last decade four companies have stand out in the cycling business Trek, Cervelo, Moot, and Seven Cycles. Each of these businesses have a different style of promotions strategies, product, and product development to the cycling customers. The cycling industry is in the maturity stage of the product life cycle. Each industry has to find a way to bring in new customers or they will be slowly step into the decline stage.
Trends analysis always helps to predict the trends like bull market is where the share pricing increasing and high purchasing demand run and ride until the trends suggested to reversal. For example, from bull market to bear market. This is will help to see the movement of the trends that will leads profits for investors because investors will pay attention to a company’s financial information, as well as general economic conditions, to accurately predict the performance of a security or other