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Competition Bikes Task 1
Kevin Moore
JET2
July 1, 2013

Competition Bikes Task 1 The financial statements have been released for the past fiscal year. The economic down turn has had an effect on the company; the company is performing well considering the state of the economy. The state of the economy is no excuse for the dip in the company; we must find ways to improve the company’s performance. Reviewing the financial statements will allow us to determine how to improve the company’s financial performance for the future.
A1a.
The horizontal analysis based on the income statement has indicated the net sales from years 6 and 7 were 33% , net sales from years 7 and 8 were -15%. That is huge differences in nets sales; this decrease is net sales in a weakness. The cause of the decrease can be a result of many different things, such as the company’s product is not being well received by the consumers. There is a similar change with the cost of goods sold, years 6 and 7 was 31.8% and years 7 and 8 was -14.5%. Change is cost of good sold is also a weakness, when the cost of good sold decreases but revenue increases that is a strength in this case the cost of good sold and revenue has decreased. Sales commission has also decreased, sales commission was 33.3% for years 6and 7, then decrease to -15% for years 7 and 8, the weakness can have a long lasting effect on the company. If the salespeople are not selling and making commission the salespeople may leave to work for another company. Advertising expenses were at $23,820 in year 6, increased to $32,760 in year 7, and then decreased to $27,428 in year 8. The company saved some money on advertising during year 8 but the decrease in advertising may have hurt sales. With sales and commission of sales on decline the company’s general expenses increased. The general expense were $120,500 in year 6, $158,00 in

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