To: Vice President It would be in Competition Bikes‚ Inc.’s best interest to change from a traditional costing system to an activity-based costing system. In this summary you will find information as to why this change is important as it will highlight the differences between traditional based costing and activity based costing systems. This summary will also give you further findings on Competition Bikes‚ Inc. breakeven point when evaluating the sales units and the sales dollars and also the
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Competition Bikes Finical Analysis Dan Petersen WGU – JET2 Finical Analysis Task 4 A. 1. To: Vice President This report has been prepared to argue the case that the company’s current costing method should be changed to the activity based costing method. This report will review; the difference between traditional based costing and activity based costing; traditional split and allocations with activity based costing; and discusses the breakeven point for Competition bikes Inc. with
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RUNNING HEAD: COMPETITION BIKE INCS Brent Allen Competition Bike Incs 1-11-13 Financial analysis “COUNTRY BIKE INC” Revenue 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
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Competition Bikes‚ Inc. Task 2 A budget is a plan expressed quantitatively in detail. This detailed plan spells out how the company will acquire resources as well as how the resources will be allocated for a specific time. The budget is used for projecting future income and expenses. The purpose of a budget is the assist the company in providing a methodology in determining what direction to go‚ to improve efficiency‚ delegate responsibility and provide a means of controlling the finances of the
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This report will provide a financial analysis and evaluation of Competition Bikes‚ Inc financial statements over a select range of financial years reported by the company. The financial analysis will assist the company in identifying strengths and weaknesses‚ with recommendations in areas of improvement to strengthen its financial position in hopes to induce overall efficiency of operations. Horizontal analysis results The horizontal analysis is a method used to analyze changes in the company’s
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Jet2 Task 4 Competition Bikes management decide to retool and now manufacturing both Titanium and CarbonLite Frames bikes. Competition Bikes was using the Traditional based Costing (TBC) method‚ however the Activity Based Costing (ABC) may give more insight to management and helpful in analyzing the per unit costing of the different types of frames and pinpoint the area of improvement. Also the management wants to know the Breakeven point caused by the potential increase of fixed cost by $5‚000 and
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Financial Analysis JET2 Task 3 A1. Capital Structure Recommendation A sound capital structure needs to be in place for Competition Bikes to maximize its shareholder return and expand. A good capital structure would ensure adequate funding and future business stability. However‚ adequate funding involves capital financing which also has its own risks. If bonds are issued‚ the company would have to pay interest on them but if sales projections aren’t met‚ this could have a huge negative impact
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lender and the borrower. Equity financing‚ on the other hand‚ involves the selling of shares to investors as a means of raising capital for the business. (Palermo‚ 2014) Competition Bikes Inc.‚ therefore‚ has two options to finance its operations. As found earlier under the best alternative to financing working capital‚ Competition Bikes has one best option of raising the money. This is the use of 50% preferred
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Competition Bikes Inc. Storyline Managing Capital & Financial Assets 04/12/2014 WGU JET2 Financial Analysis Task 4 - PASSED To: Vice President The following is a summary report to recommend whether Competition Bikes should change its traditional costing method to activity based costing‚ and an analysis of the breakeven point with regards to sales units and dollars for both CarbonLite and Titanium bikes. It also discusses the impacts to the breakeven point. The cost-volume-profit evaluation
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of a firm’s cost of capital in which each capital source (bonds‚ stock and other long-term debt) are proportionally weighted to determine how much interest the company has to pay for every dollar it finances (Investopedia‚ 2012). Part of Competition Bikes’ (CB) main consideration in the decision to merge or acquire Canadian Biking is working capital. Lets use the EBIT – EPS approach to determine how to maximize shareholder return while minimizing the cost of capital. We currently know Canadian
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