Overall, a rise in revenue and reduction in cost adds to CB’s profitability in Years 6 and 7. In reviewing Competition Bikes total selling expense, it was able to ascertain a huge 33% increase from Years 6 and 7 then managed to decrease that spending in Years 7 and 8 for about 14.9% (approximately $59,000) which is a strength for CB because they were managing their spending. For the Total General and Admin Expenses, Years 6 and 7 had a 20.4 % increase while the following years, 7
Also, this increase can be attributed to the competition in the market. For every dollar of sales the company keeps the earning of 5.06%, which is a .16% increase compared to last year. Tire City’s Gross profit margin has been favorably steady through the years with a 42.09% in 1995. This might be due to an increase in selling prices, or a decrease in cost. The long term debt to capital shows that the company has an unfavorable decrease over the past years with a 13% of the debt to capital ratio.
In an ever expanding market 19,000 sales is diminutive compared to the sales of the company’s competitors, thiswhich is due to slow production methods and longer lead times [new sentence], tThis has meant that although the market has grown, the company has seen a loss in market share. [try avoid using three clauses in a row like this] New managing director Will Butler-Adams is aware of this problem, his solution is a system of double shifts and slicker systems which he hopes will increase production to 50,000 bikes a year. Brompton Bicycle has just implemented a 1 million [unit?] production overhaul and a change of management. [good – you take a main point, expand on it and provide some data.
Stock is up by +115% on last year, but a 20% rise in sales due to new machinery speeding up production is expected and planned for. The high levels of finished stock need to be available for immediate delivery with a +7 rise in orders on last year. Maintenance and cleaning is up by +135% on last year, with the increase in large machinery, this will be an expense that will have to factored in to ensure smooth production. Overall net profit is down, but machinery is a long term investment and will decrease in expense and generate profit in the next few years. Question 2 (A) The balance sheet will indicate the financial position of a business at any one point of time.
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Short Term Objective: Increase sales revenue by 30% over the next 3 years while reducing the cost of sales by 5% per year. Also, increase the earnings by 24% over the next 3 years. Long Term Objective: To become the premier financial firm in the world. What is the business model and how will it drive IDS’s growth? IDS representatives had the most success in small towns and mid sized communities in the Midwest where the cost of doing business was low and competition was not as strong as larger metropolitan areas.
Management feels that staffing changes and investing in new technology can increase production to 50,000 a year. Competitive pricing and maintaining high production standards is paramount to keeping ahead of the competition, particularly since 80% of bikes bicycles are outsourced. BB’s unwillingness to relocate leaves them at a disadvantage on keeping costs low (wages and overheads). However they outsource non-core elements of the manufacture and developing internal staff to carry out the skilled tasks i.e. machining and complex engineering locally which allows for consistency in quality.
To achieve the company’s stated CSR objectives REI has instituted an employee commuting policy, climate-neutral travel framework, and improved shipping procedures based on the greenhouse emission metrics. As a result, while 2010 sales increased 14% from 2009, its total climate impact increased by less than 7.3%. The addition of four new stores and moving two locations to larger spaces, has allowed REI to decrease its energy consumption by 2.4%. Beyond energy efficiency initiatives, REI took additional steps to decrease waste and its total paper consumption. Although REI admits it still has a very high rate of paper usage, because of its direct mail campaigns and catalogs, the company has taken steps to optimize its catalogs, use electronic means of advertising such a mobile phone and internet and also increased the share of FSC-certified
This upward trend for Competition Bikes continues from year 6 through year 8, giving the company ample cash on hand to meet their current liabilities. For every dollar they spend, they have over $5 on hand. This indicates that Competition Bikes is able to quickly turnover their short term debt and has less financial strain. However, a high amount of working capital may mean that management has not found a more beneficial way to utilize their cash on hand and is not making the most return on investment possible. Examining year 7 and year 8, higher accounts receivables is seen $717,600 for year 7 from $271,503 in year 6, and $609,960.
The companyfollowed a strategy which allowed it to increase its corporate profits, since most of its business units it retrenched were unprofitable. By 2006, five business units hadnegative net profit margins and negative operating margins. Four of those unitshad negative margins of more than 10%, with different units seeing steady or sharpdeclines in revenues in profits since 2004. The only two profitable units were the direct selling unit and the Europeansnack lines. These two lines were seeing declining revenues and operating margins,except in 2006, when both lines increased their margins.