Running head: CUSTOM SNOWBOARDS 1
Custom Snowboards
Western Governors University
CUSTOM SNOWBOARDS 2
Custom Snowboards
A1. Key Points
Custom Snowboards, Inc. is interested in securing funding to expand into the
European market. Financial statistics have been provided within this report to discuss the feasibility of this expansion. To fund the project, Custom Snowboards wishes to secure capital debt of $1,000,000. Custom Snowboards has seen considerable growth in the percentage of sales and substantial increase in revenue. They expect future sales to continue to rise, which would be beneficial to the lender and Custom Snowboards.
A horizontal analysis will be reviewed and will reveal the Custom Snowboards financial position
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Cash and Cash Equivalents
Shares and bonds that can be easily converted into cash are considered cash and cash equivalents. This converted cash is then immediately available for use. Custom
Snowboards had a cash and cash equivalent of 83.8% during year 12 and year 13, but that dropped to 7.2% in year 13 and year 14 since sales dropped during that period of time.
This would be a concern for Custom Snowboards and indicates they may not have the
CUSTOM SNOWBOARDS 5 assets available to keep immediate cash flow available, especially if sales are not as expected in Europe.
Total Current Assets
$142,260 or 19.3% represents the total current assets of Custom Snowboards during year 12 and year 13. However, in year 13 and year 14 total current assets fell
16%. This is a concern for Custom Snowboards since the company must have enough assets to fund operations and pay expenses. Continued low sales and limited assets is a concern for lenders and poses the question if Custom Snowboards would be able to meet its financial short-term obligations.
Solvency
Custom Snowboards appears to be financially solvent from the review of the income statement and balance sheet. Custom Snowboards has reduced liabilities and maintained consistent repayments to reduce long-term financial obligations. This is strength for Custom Snowboards since they saw sales drop.
Long-term Liabilities
Net income on the income statement: $2,377,000,000 ($5.37 per share), which is an increase of 15% compared to 2014.
Waking up and looking outside, the snow is several inches deep covering the grass, the street, and the snow-banks are knee high. These are the perfect conditions, for one thing, snowboarding. A snowboarder knows the prime conditions to ride and will do anything to make sure they are on the mountain ready to go when those conditions arise. In preparation for snowboarding, you’ll need to consider the temperature, where you will be riding, and what type of gear is needed for the conditions.
Throughout time, the progression and evolution of snowboarding has increased greatly. It has gone from non existence in the late 1970’s, to one of the most watched action sports in a matter of thirty-five years. The upward takeoff and popularity of snowboarding relies on two people, Jake Burton and Shaun White. Jake Burton back in 1977 had the vision for what snowboarding would be, but Shaun White had what it took to manifest that vision. Evidence has shown that time brings change in sports, history has repeated itself with snowboarding, this history reflects the time & changes that has occurred in America.
Given the net sales in 2011 is still higher than 2010, we can assume the problem is most likely with its operating cost management. On the other hand, HH’s assets turnover rate dropping 0.30 from 2010 suggests an inefficiency of generating more sales with its increased assets in 2011.
In the financial year that ended June 2013, the total revenue was lower than that of 2014. The breakdown of
Burton Snowboards takes surfing to the mountains, with premium snowboards and equipment. Jake Burton, the world’s first snowboard maker, founded the company in 1977 in Londonberry, Vermont. Despite it being small and privately owned, Burton is the industry leader in snowboards and equipment controlling 40% total market share in the winter sports industry. Burton is a global business with its main headquarters in Vermont, Japan and Austria and worldwide distribution capabilities in over 35 countries. Burton Snowboards operates three factory outlet stores in Vermont, Massachusetts, and Austria. To create buzz marketing, Burton encourages newbie’s to experience the slopes with its Learn To Ride (LTR)
Quick Ratio: This ratio is decreasing slightly per year, with an average of a 4% loss.
It decreased by 20 percent over a year which means that the company successfully paid a part of its long-term loans.
P&R Ski and Snowboard Shop sells a range of items related to skiing and snowboarding; we will also sell items suitable for
The productive assets of property, plant, and equipment changed dramatically in 1996 they were 5,581 to 2010 an increase to 21,706. In total current assets there was a increase in 1996 from 5,910 to in 2010 21,579. Another significant change is in long term debt in 1996 of 1,116 to in 2010 an increase to 14,041. Also an important figure to note is in the retained earning in 1996 they were 94% (15,127) to 2010 68%
Asset turnover has trended downward slightly from 1.46 in 1983 to 1.32 in 1986 due to a decline in inventory turnover (3.99 in 1983 and 3.16 in 1985). In addition, any AMT"s product sits in inventory 255 days before being sold (for 1985). The fixed asset turnover ration has trended upward (from 14.6 in 1983 to 17.1 in 1985) indicating low capital intensity.
During the period 2012 and 2013, the Operating profit margin decreased from 9.2% to 5.7%. This slight decline can be attributed to the decreased revenues and the increase in tax expenses.
Net income totaled $97.8 million in 1984, an increase of 5% from 1983.when looking at the Consolidated Balance Sheet (Exhibit2), we found that the total assets grew 15% to $2.7 billion at the end of fiscal 1984 due to addition of real estate inventories as part of the acquisition of another company. The ratio of debt to total capitalization jumped to 43% at 1984 from 20% at previous year.
January 2000, a major shortfall in profits relative to previous expectations. In June, the quarterly
YEAR 0 2009 1 2010 2 2011 3 2012 4 2013 5 2014 6 2015 7 2016 8 2017 9 2018 10 Initial Investment Gross Revenue 2 COGS 3 Add'l revenue Less: COGS Loan down payment 4 Loan repayment Depreciation Additional workers Land square required Moving cost 5 Operating Expenses Total Expenses Net Income Before Tax Income Tax Net Income After Tax After Tax Cash Flow ATCF Cummulative ATCF NPV through Year N