Financial Analysis

PART 13

Summary3

A1. Key Points3

A2. Risks4

A3. Ratio Analysis6

Conclusion8

PART 2:9

Introduction9

B1. Historical Analysis9

Income Statement10

Balance Sheet10

B1a. Future Performance11

B2. Improvement12

B3. Internal and External Risks and B3a. Recommendation13

Risk in the Market13

B4. Potential Returns15

B5. Summary16

B6. Presentation18

Custom Snowboards Inc.

PART 1

Report Presentation to Chief Financial Officer

Summary

This report is made in order to give an overview of the organization to the chief financial officer of the bank. Custom Snowboard Inc. wants an expansion in the United Kingdom market and is need of the loan of $1,000,000. This is the basic purpose of the report and this is done here through doing financial analysis of the related data. After doing this study it is seen that the organization is doing good but the recent recession has done bad to the overall industry. Expansion in United Kingdom market is looking like a good step for the organization and this will hopefully help the organization in making its operations more profitable. The forecasted figures along with the previous trends are supporting this given statement on a large scale.

A1. Key Points

By looking at the horizontal analysis of the balance sheet items is also performed, it can be seen in them that current assets have decreased by 3.4% and 0.49% from year 14 to year 12, long with the account recievables has decreased by 3.4% in year 14 but was showing a minor increse in the preceding year. Moreover, it can be further seen that the accumulated depreciation on assets is decreased by $100,000 or with a 33.33%, all of which has resulted in reducing total assets by 2.3% or $40,795. Furthermore, on the other hand, liabilities have shown decline, i.e. with the reduction in account receivables, the cash infusion is partially used for declining the total liabilities by 6.2% or $57,520.

Company is also experiencing a reducing trend in EBIT from -30.91% to -82.74% in year 12 and year 14 respectively, while, net income is also declines with respect to yearly sales.  There is an increase of 19.3% in the current assets in the yaer 12 to 13, but right afetr a single year there is a dcrease which is as high as 16%. Short term investment is the fundamental reason behid it, which has decrease in scuh a huge amiount with 83.3% in the year 13 yo 14.

 All of these declines have taken in non-current liabilities, that is, mortgages and all the other non-current liabilities. Ones again here an important area of concern on the balance sheet is recent decrease which was an increase In the preceding year for the raw material purchases despite the reduction in sales. This factor explains the cause of increasing current liabilities, at least fior the year 13. However the decission of reducing these purchases in a good step to be taken but it is not much reflected in the earnings so far. The recognised reason for decreasing earning is clearly visible in the general and admin expenses, where all the three; admin salaries, executive compensation and utilities are increasing the overall expenses incurred for the ...