Financial Analysis Task 2
Task 2
Financial Analysis
Karen Wilson
A. Summary Report
A budget is a numerical expression of revenues and expenses for a specific period of time. (Sullivan, 2003) It expresses plans of business units in measurable terms. This document is a guide for predicting performance situations. The budget should assist the company in planning use of its resources and providing direction.
Concerns:
Sales:
Sales for FY 8 decreased by 15% when compared to FY7. The decline in sponsorships for the professional riders contributed to the decrease in sales to professional riders. There is no other customer base Competition Bikes are marketing to in the upcoming years. This is also no reason to believe the sponsorships will increase. The projections of increased sales for FY 9 seem to have no basis.
The Research and Development department has taken a cut in FY 8. There does not seem to be any concern to create new bikes to market to any other customer then the professional cyclist.
The decrease of customers is just one area of sales for this budget. The accounts that are currently uncollected debt are not listed separately. Will this debt be collected or will the continuing bad economy and lack of sponsorship lead these accounts to be uncollected?
Inventory:
An inventory management system for this company would allow for a more accurate on hand inventory and projected inventory for Competition Bikes. The company does not allow for inventory management of any on hand materials sue to lack of sales and inadequate inventory projections.
Marketing:
The Marketing budget was cut as well in FY8. Sales for FY 9 going to be increased without a progressive and positive marketing strategy, the customer base for Competition Bikes will need to evolve. To reach a new audience the marketing department will need a solid campaign for the upcoming years. Flexible Budget
Accounting Coach states, “A flexible budget is a budget that adjusts or flexes for changes in the volume of
Financial Analysis
Karen Wilson
A. Summary Report
A budget is a numerical expression of revenues and expenses for a specific period of time. (Sullivan, 2003) It expresses plans of business units in measurable terms. This document is a guide for predicting performance situations. The budget should assist the company in planning use of its resources and providing direction.
Concerns:
Sales:
Sales for FY 8 decreased by 15% when compared to FY7. The decline in sponsorships for the professional riders contributed to the decrease in sales to professional riders. There is no other customer base Competition Bikes are marketing to in the upcoming years. This is also no reason to believe the sponsorships will increase. The projections of increased sales for FY 9 seem to have no basis.
The Research and Development department has taken a cut in FY 8. There does not seem to be any concern to create new bikes to market to any other customer then the professional cyclist.
The decrease of customers is just one area of sales for this budget. The accounts that are currently uncollected debt are not listed separately. Will this debt be collected or will the continuing bad economy and lack of sponsorship lead these accounts to be uncollected?
Inventory:
An inventory management system for this company would allow for a more accurate on hand inventory and projected inventory for Competition Bikes. The company does not allow for inventory management of any on hand materials sue to lack of sales and inadequate inventory projections.
Marketing:
The Marketing budget was cut as well in FY8. Sales for FY 9 going to be increased without a progressive and positive marketing strategy, the customer base for Competition Bikes will need to evolve. To reach a new audience the marketing department will need a solid campaign for the upcoming years. Flexible Budget
Accounting Coach states, “A flexible budget is a budget that adjusts or flexes for changes in the volume of