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JET2 TASK 2 1

JET 2 TASK 2: Financial Analysis Theo Adams Western Governors University MBA Program

JET2 TASK 2 2 (A1) Budget Concerns

Investopedia defines Budget as an "estimation of the expenses and revenues over a specific future period of time. Budgets can be made for a group of people, family, person, country, business, government, organization or anything else that makes or spend money. The budget is a micro economic concept that shows the trade-offs made when one good is exchange for another." When looking at the year 9 budget for CB first thing that jumped out at me was the sales goal of 3510 is a 5247450. This is my first immediate concern considering that the storyline has clearly stated it is a down market due to the reductions in monies for sponsored professional riders from their sponsors. This is the main sources sales for the Carbonlite model from CB. The professional riders not having the same resources they had in year 7 when sales went to 4000 from the 3000 sold in year 6. which meant CB's revenue went from 4485000 in year 6 to 5980000 in year 7. This 33.3% jump was followed by 15% drop from 4000 units sold in year 7 to 3400 units sold in year 8. Again this drop was due to the cut in sponsorship money for the professional riders which ended up reflecting at the drop in revenue as well from year 7 to 8 of 5980000 to 4485000.

These facts do not seem to warrant an increase in sales from 3400 units to 3510 units and an Increased Revenue to 5247450. Even though the increased projection is based on a slight 3.2% increase, there has been no evidence to support any increase.

JET2 TASK 2 3 If perhaps there was a plan in place to increase sales like you possible marketing campaign for the Carbonlite then perhaps this increase would have made sense. However when looking at the budget it shows projected advertising budget to be at 28412, which

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