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Spoke City

Spoke City. Fraser White 201103398 Zac Hannam 201103841 Andrew Graham 201202808 Nick Parker 201105744. …Any Distance is Biking Distance. Sales of almost $13,000,000 Costs of goods sold just under $6,000,000 Profit of almost $2,500,000 Shareholder value of $26.04

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Spoke City

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  1. Spoke City Fraser White 201103398 ZacHannam201103841 Andrew Graham 201202808 Nick Parker 201105744 …Any Distance is Biking Distance

  2. Sales of almost $13,000,000 • Costs of goods sold just under $6,000,000 • Profit of almost $2,500,000 • Shareholder value of $26.04 • Earnings per share $2.41 • 34,349 units sold Overview

  3. Income statement

  4. Vertical Analysis of Income Statement

  5. Horizontal Analysis of Income Statement

  6. Balance Sheet

  7. Horizontal Analysis of Balance Sheet

  8. Vertical Analysis of Balance Sheet

  9. Ratio Analysis

  10. $14,786,655 was Spoke City’s greatest sales revenue, it was generated in the year 2016 Drop of sales of 14% from 2016 to 2017 Sales Growth of 2.2% from 2017 to 2018 Key Findings – Sales Growth

  11. The year 2018, Spoke City had their lowest cost of goods sold, as a percentage of sales, sitting at 45.7% Cost of goods sold increased by 1.7% from 2017 to 2018 Key Findings – Cost of Goods Sold

  12. Return on Equity decreased dramatically from 2016 to 2017, but increased from 9.8% to 14.2% from 2017 to 2018 Sales have increase by 51% in the last five years Net Income increased by 67.9% from the year 2017 to 2018 Key Findings – Profitability

  13. Spoke City introduced two new products, a Youth bike, and a Road bike Main source of income was supplied by Mountain bike (57%) Spoke City had the lowest capacity in the industry with a capacity of only 15000 Marketing Results

  14. Spoke City recorded 0% idle time in 2018, the industry average was 7.7% Spoke City recorded a wastage of 14.4%, the industry average was 17.6% Spoke City’s product quality index was 75%, the industry average was 85% Operations Results

  15. SWOT Analysis

  16. Decreasing debt to equity • After our first year we had a good ratio of 0.47, which shows investors that we would not be a risky company to invest in. Since that year our debt to equity ratio has gradually decreased to what it is now, 0.12 after the year 2018. • Constant Profitability • Our company generated a profit of $1 309 269 in our first year, and since then our profits have been increasing, aside from 2017, the year after our best year where we generated $3 098 510 in 2016. Last year we had profits of $2 409 791 which was up fro, 2017 by $974 663 • Increasing Sales • Like our profits, our sales have been increasing since year one aside from 2017 after our best year and we expect sales to continue to increase as we grow. • Efficiency • Our firm became very efficient through the years 2011- 2017. Our idle time was 0% compared to the industry average of 7.7% and we had a wastage of 14.4% which was 3.3% lower than the industry average. The more efficient our firm can be the more money we will save, maximizing our potential for profit. Strengths

  17. Shareholder Value • Currently our shareholder value sits at $26.04 which is less than half of the industry average of $56.22. • Awareness Rating • Of the six companies we have one of the lowest brand awareness ratings in the industry. We are very close with five of the companies though much below that of X-treme Bikes. • Product Quality • The three bikes that our firm chose to sell are the Adv1, Funksta_2016 and the Annihilator_2017. These three bikes have some of the lowest product quality ratings around 0.75. The highest rated bikes are the Bolt_2016 and the NinjaX_2016 which are around 0.92. • Capacity • In 2017 our firm’s capacity was 15 000, this was 25 000 below the highest of Extreme Bikes and Michael’s Bicycles. This was a major weakness for our firm as it restricted us from being able to meet the demand of our customers. Weaknesses

  18. New Product Options • There are many new products available for our company to begin selling that could help generate more income. The Bolt_2016 and NinjaX_2016 are both very popular bikes with the highest product quality ratings. The NinjaX_2015 was also the most selling bike in the industry recording a total of 64 784 sales. Opportunities

  19. Competitors • We are in a very competitive industry with there being five other companies selling similar products. The two biggest competitors are Michael’s Bicycles and X-treme Bikes whom control the majority of the market, having a combined market share of 61%. • Clustering of Competitors • Aside from the two majority market holders, there are four other companies competing to find an edge and have a larger proportion of the market. The four companies range from having a 4.3% to a 16.9% market share. Threats

  20. Objectives and Recommendations - General

  21. Objectives and Recommendations - Finance

  22. Objectives and Recommendations - Marketing

  23. Objectives and Recommendations - Operations

  24. Questions and Answers

  25. Spoke City: Any Distance is Biking Distance

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