The objective of this article is to analyse the strengths and weaknesses of Speedster Athletics Company’s financial position. Company has a good profitability and a attractive asset base. However following strengths can be highlighted in the financial position of Speedster Athletics Company; • Favourable Gross profits – Speedster Athletics Company has been able to generate favourable gross margins over the last three years consistently over the industry average of 26%. Gross margin is in a declining trend over 2010 to 2011 where 2011 gross margin is 27% (1371/5075*100%) which is 1% lower than 2011, however this is above the industry average level, proving that Speedster company is capable of generating better margins. • Increase in Fixed assets base in 2011 over 2010 – From 2010 to 2011 there has been a 23.8% increase in gross fixed assets value. The raised funds through long term debts would have been used to enhance assets base of Speedster. This is a very positive sigh of future profitability and capacity of the company. Higher assets should be able to generate more cash inflow...
In 2007, Harley Davidson was the world’s most profitable motorcycle company. They had just released great earnings and committed to achieve earnings per share growth of 11-17% for each of the next three years. Their CEO of 37 years, James Ziemer, knew this would be an extremely difficult task seeing Harley’s domestic market share recently top off at just under 50%. The domestic market was where Harley’s achieved the most growth over the past 20 years and with it leveling off, where was Harley going to get the 11-17% was the million dollar question.
Another highlight of the company was the company’s gross margin, which was 32.8 in 2012, just a little more than the 31.9 in 2011 and their selling rate went down by 20.9
Net income increased from $70.6 million in 2007 to a high of $214.9 million by 2011 – CAGR (32.1%)
Looking at the individual ratios seen in exhibit 1 and comparing it to the industry average shown in exhibit 2 gives a sense of where this company stands. Current ratio and quick ratio are really low and have been decreasing. For 1995, the current ratio is 1.15:1, which is less than the industry average of 1.60:1, however to give a better sense of where this stands in the industry, as seen in exhibit 3, it is actually less than the average of the bottom 25% of the industry. The quick ratio is 0.61 is less than the industry is 0.90. Both these ratios serve to point out the lack of cash in this company. The cash flow has been decreasing because, it takes longer to get the money from customers, but the company still needs to pay for its purchases. Also, the company couldn’t go over the $400,000 loan limit, so they were forced to stretch their cash.
After conducting a basic 10 year financial analysis of the company, it has become evident that even with a highly competitive market structure they are able to improve on their performance. Ranging from 2004 to 2013 financial information, the company has shown a significant increase in their sales revenue roughly $3865 million sales in 2004 to almost four time that valuing $12970 million in 2013, which was an “increase of 10.4% over the 53 week prior year” The company’s growth strategy has been to diversify its product market and make them...
The main contributing factor to the decline in the return on stockholders’ equity (25.37% to 8.73%) was the decline in the profit margin (11.79% vs. 5.08%). The decrease in asset turnover (1.11 to 1.00) made a small contribution to the decline, as did the decline in the debt ratio (48.4% to 41.8%).
The report will give an overview of each company, an explanation of what type of companies we are analyzing, the purpose of each company in terms of its goals and objectives, the products and services each company produces, and what future prospects we see these companies having. The reader should gain an understanding of each company as well. We also analyze the type of industry these companies are competing in. This will help us understand where each company fits in the marketplace. This is important because it places the two companies into a broader picture. The most important part of the financial report is the financial statement analysis. In this, the annual report of each company was analyzed. It studies the firms’ past earnings to understand their operating performances. It also forecasts future profitability and risk (short-term and long term). The financial statements give information on how these risks affect expected return. In the end, the reader will have an understanding of the two companies, the industry in which they operate, its financial standing in the past and present, and future profitability.
The proforma trend for 2007’s gross margin remained at 28.5%. These larger COGS would continue to effect the organization to the 2007 year. However, it should be noted that the ROE for Brodie Industrial Supply was larger than the industry average at 47.5% compared to the industry at 14.4%. This difference can be attributed to the expansion of their faculties as well as their sustainable growth which occurred from 2004 to 2006. The 2007 trend indicates that profitability will slow down but would still have significant growth in the 2007 year.
...rs, setting a good trend for the corporation. They also have a very low debt-to-equity ratio, indicating that they have enough equity to easily pay off any funds acquired from creditors. As a creditor I would feel safe in lending them funds for any future projects or endeavors.
A portfolio manager, Kimi working for a large cap fund company called NorthPoint Group, had a difficult decision to make while looking at Nike Inc. financials: whether Kimi should buy Nike shares or not for the fund Group she was working for. Kimi needed to consider all aspects of Nike Inc. financial position. On July 28,2011 Nike Inc. held a analyst’s meeting to disclose their fiscal year 2001 as well as to revitalize the company who wasn’t performing well. Thus, the meeting showed that Nike Inc. experienced some difficulties during the past years. First, Nike Inc. revenues have reached a plateau since 1997 of $9 billion and its net income has decreased from $800 million to $520 million. Also, it showed that Nike Inc. market share for their US athletic shoes had decreased from 48% in 1997 to 42% in 2000, their supply chain systems wasn’t efficient enough and a strong dollar has drove the company’s profitability/revenue down.
The income statement shows both strengths and weaknesses. There is a jump in net sales from year 6 to year 7 by 33%; this is a substantial increase for the company and strength. In year eight compared to year seven, the company has seen a decrease in net sales by 15%. Net sales show to be rather unstable and a possible source of weakness as well. The reduction in revenue is ultimately due to the current economic situations; which could be attributed to funding cuts by sponsors for some of the riders. This kind of up and down in net sales may be common for the company over the years to come. The company should also consider having a product to balance this out. Since their main source of sales is a specialty item it would benefit the company to have additional products that are more main stream to even out sales in the future. However, unit sales will most likely stay below year sevens high of 4,342,000, it is expected that unit sales will increase over the next three years to make up for its decline in year eight.
Evaluating a company’s financial condition can be done by looking at its profitability or its ability to satisfy long-term commitments. These measures can be viewed through an analysis of a company’s financial statements, including the balance sheet and income statement. This paper will look at the status of Scholastic Company’s (Scholastic) ability to satisfy its long-term commitments and at the profitability of Daktronics, Inc. (Daktronics). This paper will include various financial ratio calculations and an analysis of the notable trends. It will also discuss the profitability and long-term borrowing positions of the firms discussed.
Any successful business owner or investor is constantly evaluating the performance of the companies they are involved with, comparing historical figures with its industry competitors, and even with successful businesses from other industries. To complete a thorough examination of any company's effectiveness, however, more needs to be looked at than the easily attainable numbers like sales, profits, and total assets. Luckily, there are many well-tested ratios out there that make the task a bit less daunting. Financial ratio analysis helps identify and quantify a company's strengths and weaknesses, evaluate its financial position, and shows potential risks. As with any other form of analysis, financial ratios aren't definitive and their results shouldn't be viewed as the only possibilities. However, when used in conjuncture with various other business evaluation processes, financial ratios are invaluable. By examining Ford Motor Company's financial ratios, along with a few other company factors, this report will give a clear picture of how the company is doing now and should do in the future.
The purpose of this paper is to provide data and analysis of PepsiCo, Inc. and The Coca-Cola Companies financial statements so that a potential investor can make an educated decision about where to place their money. The paper shows a vertical analysis of each company’s consolidated balance sheet, a horizontal analysis of their consolidated statement of income ratios showing solvency, liquidity and profitability.
In the past, the company performance was measured by asking ‘how much money the company makes?’ To a certain extent, they are right because gross revenue, profitability, return on capital, etc. are the results that companies must bring to survive. Unfortunately, in today business if the management focuses only on the financial health of the company, numerous unwanted consequences may arise.