Rollover 5: Year 2015
Review of Previous Year’s Results (2014)
From the industry benchmark report for 2014, (appendix) between the year 2013 and 2014 our share value increased from 15.80 to 27.04 placing us ahead of everyone in our world. That is an increase of 172%. From out firm reports (appendix), our net income of 2,764,446 unfortunately fell short of our profit forecast. of 3,501,014. Even though our share holder’s value was the highest amongst our competitors, our profit before taxes was second to Bikes ‘R’Us by a total of $450,000. They had a profit of 4,339,987 while we only had a profit of 3,949,209. A part of the reason why our net income didn’t meet our forecasts and profit before taxes fell short of Bikes’R’Us is due to the limited production of the youth bike. The demand for the product was above 80,000 units, however we were not able to capitalize on that because we had only projected the demand to be 30,000. Therefore we had a loss sale of 50,000 units according to the product report (appendix). The underestimation in sales was due to the lack of knowledge of how the market would react to the launch of the youth bike.
Our goal for this rollover is to continue our steady increasing our share holder value and maintain our lead in the industry. This year, we want to continue directing our focus on the launch of the new youth bike. In order to achieve this, we made major of our decision directed towards marketing. We decided that’s our best option to maximize our sells for the new youth bike is to increase the price of the mountain bike to reduce the sale and hopefully direct the demand to the youth. We always found a way to decrease our operational cost to increase our revenue. For our financial decisions, we shall repurchase our shares and try to pay out the maximum amount in dividends to potentially increase our shareholder value once again. Marketing Decisions
In order to promote our new youth bikes, we decided to switch our...
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