In addition, this report includes the recent history of the company and a recommendation on how to proceed with the expansion plans, which will be presented to the company’s CEO and the board of directors. A1. Key Points: There are several key points that could impact the bank officer’s decision in regards to extending a long-term loan to Custom Snowboards. The following summary will evaluate the company’s financial health, along with its ability to obtain resources and grow by utilizing several analytical techniques: horizontal analysis, vertical analysis, and trend analysis. Income Statement Horizontal Analysis: Revenue: Custom Snowboards was able to increase net sales between years 12 and 13 by 3.21% or $209,300.
TASK A. BUDGET AND BUDGET VARIANCE ANALYSIS The expansion to Europe is estimating to take approximately $1,000,000.00 in capital to accomplish and one of the ways to acquire that capital is through a bank loan. The report below has been prepared to show financial strength to various banking institutions considering extending a long-term loan to CSI for the needed capital. A1. Key Financial Data Points.
Financial Statement Analysis Income statements and balance sheets were reviewed to summarize the following key points that could impact the loan decision. Horizontal, vertical, trend, and ratio analysis were also reviewed to provide a solid understanding of the financial highlights of Custom Snowboards in the areas of profitability, liquidity, and solvency. Revenue. Revenue includes net sales, cost of goods sold, and gross profit. Gross profit continues to grow at 30.4% with .23%/ $4,900 from year 12 to 13, and .93%/ $19,600 from year 13 to 14.
A breakdown of the income statement will show income and expenses during each business year for a three year period. “The results of the profitability analysis will display how profit was earned in relation to sales, total assets and net worth.” (Hunt, 2013). · Net Sales “Custom Snowboards finance team is well aware that sales are an important factor in determining profitability.” (Hunt, 2013). During period from year 12 to year 13, net sales increased 32,200, 0.49%. Although the increase is slight, it’s an indication of strength in the company’s ability to raise sales volume.
This ratio shows that the average collection period in the year was approximately 24 days. This would indicate the effectiveness of Huffman’s collection policies promote rapid repayment. The calculations computed to determine these liquidity ratios of financial information are key components in examining Huffman’s ability to pay off short term debt. This information is necessary in deciding whether it is worth the risk to remain as a creditor of investor of this company. In the case of Huffman Trucking, these ratios impact their customer base, including their contracts with the United States Government and various automotive parts suppliers.
Table of Contents Introduction 3 Corporate Mission and Business Model 3 External Environments 4 Ethics and Social Responsibilities 6 Conclusion 6 References 8 Introduction Viterra is known as the largest grain handler in Canada. It was formed in 2007 and has rapidly flown past their competitors ever since, thriving off of western Canada’s strong agricultural economy as of the past decade. They bring in an extraordinary profit every year, with over $702 million in the year 2011 alone (Cross, 2012), and continue to dominate its competitors with locations out of Canada, the United States, Australia, New Zealand, and China. Viterra is involved in the processing, marketing, and handling of the grain they purchase off of farmers.
Debt capital is the borrowed money, typically long-term, that is used to invest in the company to finance growth (Investopedia, 2014). Competition Bikes has determined it will need $600,000 to fund the Canadian expansion if the decision is made to move forward with the expansion. There are five alternative capital sources that have been identified and that are available to optimize the company’s capital structure after obtaining the funds necessary for expansion. These alternative capital sources use a combination of bonds, preferred stock, and common stock for years 9 through 13: * 100% of 12% bonds * 50% preferred and 50% common stock * 20% of 12%
As with any major move in planning the future of a company, all purchases, any sell-offs, possible acquisitions, and any mergers must be thoroughly and meticulously analyzed for their impact and net value to the bottom line shareholders. Competition Bikes has located the Canada based Canadian Bikes and verified its fit and performance history. The prior year performance for Canadian Bikes delivered almost four times the earnings per share as Competition Bikes delivered to their shareholders for Year 8, which is impressive and leads them to believe they can also learn better ways to produce their current products and reduce expenses from this newly acquired company. The capital that must be raised to purchase Canadian Bikes is roughly $600,000. This report will review and summarize all of the possible options for joining Competition Bikes and Canadian Bikes, including merging vs. buying, leasing vs. buying, and all possible combinations of raising the capital through a
JET2 Task 5 Financial Analysis Susan Martinez JET 2 Task 5- Susan Martinez A1) Custom Snowboards desires funding to expand into Europe. The amount requested is a $1,000,000 loan. Over the past three years Custom Snowboards is a profitable company which has the potential for doing well with a European expansion. The horizontal analysis shows there has been an increase in net sales from years 12-13 by $209,300 (3.21%) and from years 13-14 by $128,800 (1.91%). The gross profits have increased from year 12-13 by $63,700 (3.21%) and from years 13-14 by $39,200 or 1.91%.
Target Corporation was incorporated in Minnesota in 1902. Reference: Part I, Item 1: Business, Form 10-K, Page 2 3. Who is the company’s independent auditor? Its independent registered public accounting firm is Ernst & Young LLP. This company is one of the established and largest accounting service firms in the world and one of the “Big Four” accounting firms, along with Deloitte, KPMG and PricewaterhouseCoooper. Its main service are accounting and financial reporting, external audit services, fraud investigation and dispute