Wgu Fin Analysis Task 1

We will also analyze the proforma(s): balance sheet, income statement, cash flow, ratios, and score board. In the income statement, we can see the predicted sales of our products and see if there are any adjustments needed. We also made sure that we are making a good net profit.

The current operations can also be improved by implementing a just-in-time inventory management system. This is where the company only buys the materials that it needs to produce the units that are actually sold. This cuts down on dollars that are tied-up in inventory held in raw materials inventory. This is a considerable amount for Competition Bikes, Inc. and will be lowered enormously as fewer materials are placed in raw materials. This will be billed in the same month in which they are produced creating fewer dollars to be tied up in inventory. This will then be converted to cash to be used as working capital.

Horizontal analysis is when an individual looks at the income statement of a company and compares one year to the other to see what kind of percentage it has increased or decreased within the different departments in a company for any given time period. When looking at Competition Bikes (CB) and performing a horizontal analysis, we would take a look at first year 6 and year 7. Between year 6 and 7 there was an increased net sales of 33.3%. This means that from year 6 to year 7 there was a great increase. This means that the customers were happy with the product being sold, and this is a sign of strength within the company. It was a profitable year.

Harley-Davidson’s interest expenses have been on the decline, and had a huge decrease in 2014 of forty-one thousand dollars. This means that they have paid down some of their debt and are no longer paying as much interest. The company’s income tax expense has been on the increase over the last three years, which means they are paying a higher tax rate. Their net income from continuing ops has also been increasing since 2012. According to Investopedia, “this allows us to see what portion of current earnings the company can reasonably replicate in the future, and what are one-time occurrences and abnormal events” (Investopedia, LLC., 2014). The increase in Harley-Davidson’s continuing ops shows that the areas they are making money in is working well for them, and they will want to continue to manufacture in those areas.

The horizontal analysis reflects a significant increase in the company’s cost of goods sold between years 2 and 3 with only a modest increase in their sales for the same period. The balance of their expenses remains stable or decreased modestly during the same time period but gross profits declined due to the significant increase in cost of goods sold.

In Chapter 5, we learned about evaluating financial performance. We can evaluate performance by looking at financial ratios and conducting different forms of analyses. Some useful analyses are trend analysis, cross-sectional analysis, and industry comparables analysis. Trend analysis is used to examine a venture’s performance over time. Cross-sectional analysis is used to compare a venture’s performance compared to another company at the same point in time. Industry comparables analysis is used to compare a venture’s performance against the average company’s performance in the same industry.

This report aims to analyse the financial position of HALFORDS PLC within its daily operating activities and it also compares the company’s performance with its key competitor, the SPORTS DIRECT PLC. The report also includes background of both the companies and an industry overview. To better understand the performance of both the companies, the segmental analyses have been done for both region and

Review the company’s income statement, balance sheet, and cash flow to determine the financial health of the company. Be sure to compare your company to at least two other companies in the industry. Be sure to answer the following:

The company will determine its financial health using its financial performance and financial position. This is shown by the profitability statement for the year under review, and its financial statement. The performance and financial position are measured using the accounting ratios. The raw data from the income statements for the four years 1009, 2010 and 2011 indicate progressive improvement over time. The table below illustrates the observation.

A company’s financial health is the deciding factor of future growth. As humans, we rely on health checkups to improve and maintain our health. Same thing goes for businesses. Without maintaining proper financial health that company will not be around long afterwards. I want to begin by presenting and comparing Ford Motor Company’s income statement, balance sheet, and cash flow to determine the financial health of the company versus two of the company’s current competitors.

For any company, the ability to meet its short-term and long-term financial goals is an essential factor in maintaining its operations and ensuring future growth. A company evaluation at regular time intervals helps to check its financial health, its capital structure and its potential to attract investors.

In order to make an informed decision about whether to change our current costing method to activity-based costing, we need to take into consideration a number of variables. To that end, an evaluation of cost, volume, and profit has been undertaken in order to weigh the pros and cons before recommending a shift in the manufacturing approach. Since Competition Bikes, Inc. has made the decision to acquire the Titanium technology that has been developed by Canadian Biking, both types of technology must be factored into the decision-making process. With regard to sales units and sales dollars, we need to analyze the breakeven point for both types of bikes, CarbonLite and Titanium. This report will summarize those findings.

However, according to Laudon and Traver (2012), financial analysis helps us to understand how a firm is performing. There are two parts to a financial analysis: the statement of operations and the balance sheet. The statement of operations tells us how much money (or loss) the firm is achieving based on current sales and costs. The balance sheet tells us how many assets the firm has to support its current and future operations.

The process will analyze whether the company is stable, solvent, liquid or profitable enough to invest in. The analysis will focus on three sections, (A) Sales and Income Record, (B) Structure of Expenses, (C) Assets Distribution and (D) Capital Structure.

Revenues Breakeven Basics Costs, Revenues and Profits Business Costs Using Budgets Using Breakeven in Decision-Making Investment Appraisal Basics Financial Strategies Measuring and Improving Profit Improving Cash Flow Working Capital Balance Sheet Income Statement Financial