Custom Snowboards, Inc. (CSI) is considering if they should expand into Europe and if it is a sound financial decision. They are going to present their financial status to see if they are able to obtain funding for the company to be able to successfully expand themselves into the European market. The growth of sales and increases in revenue has shown to be a substantial percentage. CSI will want to borrow capital funds of $1 million to be able to finance the project of expanding into the European market. The sales in the future are projected to continue to increase that will allow enough revenue to satisfy what is needed for the lender and for CSI both. A horizontal analysis will be used to document the data of CSI’s financials that will span a three year time period. This data will include their profitability, liquidity, as well as their solvency so that they are able to show that they are a good financial risk for the approval of the loan for their capital. The analysis will show all of the key pints that will affirm CSI’s ability to be successful in their expansion into Europe and still be capable of maintaining the shareholder returns at a maximum.
*CSI Profitability-
Showing a breakdown of CSI’s income statement will be able to show their income and their expenses during a three year time frame. This will show a full picture of CSI’s financial well-being.“The results of the profitability analysis will display how profit was earned in relation to sales, total assets and net worth.” (Hunt, 2013).
*CSI Net Sales-
CSI’s management and financial teams are very cognizant of how their sales will help determining what the profitably of the company is. CSI’s income statement shows a net sale increase of $32,200 increase in sales. The increase in sales is a very slight increase; however, this does show strength of the organization to be able to increase their net sales. “Not only will an increase in sales benefit the company, it
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