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Jet 2 Task 1

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Horizontal analysis results
Horizontal analysis compares the company’s finances over several years, with a base years for comparison. Competition Bikes uses year 6 as the base year, and a comparison of changes from year 6 to 7 and then with years 7 and 8. The strengths are mostly for year 6 to year 7. Net sales were $4,485,000 for year 6 and increased by $1,495,000 to $5,980,000 in year 7. Then from year 7 to 8 there is a decline in sales by $897,000 this decrease was the major weakness. The cost of goods in year 6 equaled $3,294,000 then increased in year 7 by 32.8% to $4,342,000. The Gross profits were up 37.5% in year 7 compared to year 6 for a growth of $447,000.
The operating expenses increased due to the increase in sales from year 6 to 7. This is always a strength when you a company spend more because they are making more money. Advertising could have played a role in the increased sales. They spent the greatest amount of money on year 7, which was $32,760. There was a decreased in advertising expenses in year 8, by 16.3%. The company had fixed percent that they spent in sales commissions, distributions, network support, and transportation out, which all increased 33% from the 6th to 7th year and decreased 15% from the 7th to the 8th. The overall selling expenses were $299,220 in year 6 and increased to $397,960 (+33%) year 7 and then decreased to $338,748 (14.9%) year 8. Competition Bikes selling expenses were high for the 6th to the 7th year, but they managed to regain control form the 7th to the 8th which would be considered a strength.
General and Administrative expenses constantly increased. Rises in the company’s expenses are not always a trending weakness, when the increase is an effect of the company’s growth. There was an increase in spending from $767,765 the 6th to 7th year which was a 20% increase. The company’s sales grew and as a result so

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