Task 5

CFO Presentation
A1. Key Points
The profitability of the Custom Snowboards Inc can be seen in the following areas: net sales, gross profits and net earnings. Net sales increased between years 12 and 13 by 3.21% and again between years 13 and 14 by 1.91%, as shown in the horizontal analysis line 10. The company has continued to grow its net sales for the past three years. Custom Snowboards Inc has the ability to continue increasing net sales.

Gross profits have remained constant at 30.4%, as shown on the vertical analysis line 12, between years 12, 13, and 14. This demonstrates that the company has kept the margin consistent each year with the cost of goods sold which can be seen in the horizontal analysis lines 11 and 12. These two lines show that between years 12 and 13, the cost of goods sold increased at 3.21%, the same rate that the gross profit increased. And again between yeas 13 and 14, the gross profit increased the same as the cost of goods sold at 1.9%. Custom Snowboards Inc has not allowed the cost of overhead to rise faster than the sales increase.

The net earnings of Custom Snowboards Inc have decreased over the last three years. Line 41 of the horizontal analysis shows a 14.42% decrease between years 12 and 13, and a 27.79% decrease between years 13 and 14. The decreases in net earnings have been mainly due to the increases in administrative salaries and executive compensations. As the company has grown, so has the need compensate administrative staff and executives to ensure knowledgeable staff that can continue to grow net sales.

Sales are projected to rise over the next three years. The sales trend analysis demonstrates this growth between years 15 and 14 with a 3% growth and again between years 16 and 17 with an additional 1.7%, as shown on line 25. The trend analysis takes into consideration that year 16 will not be a