Competition Bike Incs
Competition Bike Incs
“COUNTRY BIKE INC”
Horizontal analysis compares a company’s performance from year to year. I will be reviewing Competition Bikes Inc(CBI) balance sheets and income statements. During CBI year 6, 7 and 8 I have found their net sales , cost of goods to be fluctuating, and few various other items. The net sales from year 6 to 7 increase 33.34 %. The cost of goods from year 6 to 7 was 31.82 %. The gross profit increase 30.89. Comparing year 6 and 7 I found that year 7 improved, but when I compared year 7 to 8 the results were not good for year 8. The company had experienced a 15 percent reduction in net sales. Cost of goods drops 14.8 % from year 7 to 8.
CBI advertising expenses increased by 37.5 % from year 6 to 7. CBI made a great investment from year 6 to 7 because the net sales increase at a higher rate the increased advertising cost. CBI reduced their advertising expenses by 16.3 % from year 7 to 8. I believed this was done because of the fragile economy. Many companies are trying to make cuts back during a weak economy. These reduces expenses will hold them over until the economy becomes stronger.
The website creation and maintenance expenses during year 6, 7 and 8 stayed the same price. Sales commission increase 33.371 % during year 7 from the previous year. Sales commission decrease by 15 % the following year (8).
The Distribution network expenses had a positive increased in year 7 by33.3 % jump from the previous year. Distribution expenses are normally supposed to maintain similar numbers, but when you have an increase in sales it is acceptable to increase the distribution expenses. Distribution network expenses decreased 15 percent in year 8. This was caused due to less revenue.
CBI had 33% transportation increase from year 6 to 7. This was caused CBI had more
References: Free Dictionary(2013) http://legal-dictionary.thefreedictionary.com/Sarbanes-Oxley+Act+of+2002 Investopedia(2013) http://www.investopedia.com/terms/h/horizontalanalysis.asp#axzz2Hh4rgfuE True Bussiness(2013) http://truetobusiness.com/finance/ratio-analysis Wikipedia(2013) http://en.wikipedia.org/wiki/Internal_control