However, the account receivable turnover and inventory turnover ratios went down in 2008 as compared to 2007. They went down by 3.71 and 6.7 times respectively, in the year 2008 as compared to 2007. The account receivable turnover went down due to decline in revenues and increase in account receivable in 2008; it shows that the company generated fewer revenues in 2008 against its account receivable in 2008 as compared to 2007. The inventory turnover ratio was also down due to no change in inventory but the revenues went down. All profitability ratios are showing decline in the year 2008 as compared to 2007.
An integral part in performing a horizontal analysis is the ability to see the variation from one period to the next which are called trends (Horizontal analysis, n.d.). . Within the income statement, net sales increased by 33.3%, $150k, from Year 6 to Year 7. Then, a drastic decrease of 15% which is roughly $900k, took place from Year 7 to Year 8. The 33% increase showed the strength of the company, but the huge drop in sales demonstrated how Competition Bikes, Inc. (CB) struggled to attain a surge in its revenue which is the result of the 15% decline in sales caused by economic situations.
Shortterm debt increased from 0.3 percent in 1984 to 16.8 percent in 1987. Accrued expenses went from 16.6 percent in 1984 to 1.9 percent in 1987. In addition, the inventory turnover decreased from 4.6 in 1984 to 3.2 in 1987 while the age of inventory increased from 79.7 days in 1984 to 113.2 days in 1987. This is a miserable sign because the electronics innovate day by day but Crazy Eddie needed more time to sell the products. The accounts receivable turnover decreased from 135.4 in 1984 to 53.9 in 1987 while the age of accounts receivable increased from 2.7 days in 1984 to 6.8 days in 1987 indicate that Crazy Eddie had some problems on realizing accounts receivable.
The next question was if they decreased price by 105 and increased sale tickets to 14,000, if there income would increase. After solving this, in exhibit 5, I found that this would not of helped in 2006. They would be in more debt if they had done this, they would have lost $379,197. With the price reduced the break-even points for units and for dollars would have increased due to the contribution margin per unit changing. Next they wanted to see what would happen if they took away sales commission
Along with provided data the company has its financial statements for the years range from 2006 to 2008. Evaluation of this data will help to highlight budgetary items that raise concern in the budget planning. Sales budget The company plans to realize 3510 units in 2009, which is 110 units more considering realized units in 2008. In its statement, the company noted that the current economic situation and declining sponsorships are the reason for the decrease in sales and it is expectation of the further decline for the three following years. However, the company doesn’t provide strategy to support its plan to realize more units.
While gas grills were seeing a 8 percent increase since the previous year charcoal grills had dropped by 3 percent. Charcoal grill penetration was trending down since 1997 and gas grill penetration was trending up. Another contributing factor may have been a increase in price by stores to their private label brands as well as their main competitor (who also produced these stores private brands) increase their price as well. Kingsford had kept the prices the same though some stores had increased the prices on their own. Kingsford had also reduced their media presences since 1996 (because of a decrease in media spending), a direct from the text by Warren explains " The charcoal category was now paying the price for the several years of reduced advertising".
LB160 LB160 TMA 1 17 May 2012 Summary Brompton Bicycle (BB) plans effective productivity and performance in a bid to keeping one step ahead of competition by not compromising the uniqueness of its folding bicycles. Butler-Adams, managing director of BB understands the need for innovation and is currently working on a £1m revamp, spearheaded by new management. BB estimates they will sell 19,000 bicycles generating an income of £7m and a pre-tax profit of £925,000. Bikes Bicycles in the UK sell for between £550 and £1,200. Competition among key players is rife on the global market with some competitors manufacturing up to 350,000 bicycles.
So we can say revenue growth for Coors is less then its competitors during the period of 1977 to1985. [pic] Analysis for operating income is done for four companies as data is available for these four only. • Coors operating income decreased during the period1977 to 1985 by 15%. • Operating income of Aneheuser-Busch increased by 358% & that of Heileman by 168% • Coors performance is poor compared to its competitors during this period. WHY the performance deteriorated:- [pic] • Coors spend on advertisement was lowest (2.56% of sales) in 1977 but its spend was highest (15% of sales) in 1985.
The proposal was negotiation about selling the Eagle brand tire in Sears. Goodyear reconsidered the proposal by Sears in 1992 because the decreasing in market. During 1987 to 1991 Goodyear decline an average of 3.2 percent in the tires market share for passenger car tires in the US. The loss from the sale fall through the Goodyear Tire dealers and warehouse membership club stores and discount tire retail outlets due to the increasing trend. Discounts and multi-brand dealers saw the market share grew by 8%, while warehouse clubs saw a growth of 6%.
Slump is when business activities begin to slow down, and the economy slowly goes into recession. Following slump is recession and this is when there is a decline in the economy and usually occurs when there is a fall in the GDP in two successive quarters. Recovery is when the economy begins to return to a normal state and business activities begin to increase once the economy has gone through recession. Finally, boom is when the economy is processing continuously with business activities and the demand is high, the unemployment rates are lower and further expansion due to higher GDP. British Airways faced recession in 2009/2010 where business faced a decline.