Financial Analysis Task 5 Wgu

4520 words 19 pages
Financial Analysis Task 5 Part B-Report to CEO B1. Custom Snowboards sales history has been steadily increasing per the table below. CSI has had small growth in sales with an equal increase in COGS. The COGS is relative to the increase in the net sales, however, CSI should look further into ways they can decrease their COGS line item in order to see more profit growth from year to year. We can see on the Horizontal Analysis below that net sales, COGS and Profit all had the same increases from years 12 to 13 and from years 13 to 14. This is indicative of CSI needing to do more cost based analysis to see where they can make production cost cuts and boost sales. Per the data, operating costs also increased alongside the net sales. Items such …show more content…

I would like to point out a positive though, CSI has a great current ratio in comparison with their competitor, Winter Sport, as well as acid test ratios, which is a great selling point for obtaining a loan because to shows that CSI can payback their debt and have enough to cover its immediate liabilities. The historical data is also suggestive that CSI will be able to maintain their COGS as well as reduce them. It is shown in the data that the COGS have increase along with the increase of net sales at the same percentage. I believe this can equate to the fact that CSI has a good internal control process in place, it just needs to be tweaked slightly to find those areas they can make cuts to through their ABC analysis. It can also assume for future performance that CSI will continue to increase their assets once they have identified why year 12 showed a drop. CSI has shown that they have been able to increase their stockholder equity over the years which is also indicative that CSI has an increasing net profit and will continue to increase their net profit with or without the expansion. CSI can increase their leverage and along with this asset increase and give themselves an edge to attract investors. When planning future it is important for managers to set future goals and create interventions that will measure those goals based on financial data. B2. Improvement **this is mixed with the external and