Essay about Jet Task 1 Financial Analysis.

8422 WordsApr 20, 201334 Pages
Tatiana Safonova-Lynn. TASK 1 – FINANCIAL STATEMENT ANALYSIS AND CONTROLS Requirements for Task 1: A. Prepare a summary report in which you do the following: 1. Evaluate the company’s operational strengths and weaknesses based on the following: In order to evaluate company’s operational strength and weaknesses accurately it is important to have access to more than one year worth of data. The company, of course, will not be evaluated on the basis of couple of ratios, it is very important to analyze all the available information to put pieces of puzzle together to see the overall impression of the company and its attractiveness to creditors, investors and stockholders. To be able to compare company’s performance we will be evaluating three…show more content…
Choice made from year 7 to year 8 is a weakness. Sales Commissions, Distribution network support and transportation out showing the same trend: increase from year 6 to 7 at 33% (negative) and then a decrease of 15% from year 7 to 8(positive). To summarize on total selling expense, the amount increased by 33% from $299220 to $397960 and then dropped to $338748 at the most recent year, totaling 14.9%. Cost of being in business can be high; we can see that by having a high cost in the three above measurements company was profitable from year 6 to year 7. But it seems like the company realized that keeping expenses under control is strength and reduced it from year 7 to year 8. Total general and admin expenses show a constant increase. When expenses rise it is not always a negative trend as it could be justified by the fact that company grows. We can see that the total amount increased from $767,765 year 6 to $924,115 year 7, totaling 20% which can be considered a good change as company grew in its assets. Bigger company requires bigger expenses. From year 7 to year 8 company increase its general and admin expenses by only 1.2% which is a good thing. Again it seems that the executives came to realization that the company will not be as profitable as the year prior and that rise of expenses shall be tamed. We can see a constant positive trend in company’s reduction of interest expenses (constant decrease of $5000.00 from year 6
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