Jet2 Task 1 Competition Bikes

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WESTERN GOVERNORS UNIVERSITY Financial Analysis RJET Task 1 Executive Summary An extremely crucial element to any business entity is the financial analysis process. So what exactly is financial analysis? The actual definition is The assessment of the (1) effectiveness with which funds (investment and debt) are employed in a firm, (2) efficiency and profitability of its operations, and (3) value and safety of debtors' claims against the firm's assets. It employs techniques such as 'funds flow analysis' and financial ratios to understand the problems and opportunities inherent in an investment or financing decision. (WebFinance, Inc, 2013) Simplified it is the process of evaluating the current business, let’s say their effectiveness, and their future in their industry. Why is it so important? Financial statement analysis involves the carful select of data from various financial statements, such as the one that we will be referring to in this report. The data from the reports is used primarily to forecast the financial health of the business [in this case Competition Bikes]. When analyzed it makes it easier for c-level executives and management to make future decisions. [It is important to note that this analysis is not a definite and/or detailed study of all the costs and all the benefits of Competition Bikes. This is strictly based from data received from certain financial statements. ] To analyze the financial health of Competition Bikes Inc. it will require the careful examination of it internal operations reflecting the horizontal, vertical, trend and ratio analysis, as well as the working capital of the company. HORIZONTAL ANALYSIS Horizontal analysis is the study of percentage changes of comparative statements. It provides a year – to – year comparison of Competition Bikes Inc. performance against different periods (years). In this particular

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