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Wheels - PowerPoint PPT Presentation

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Wheels

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  1. Wheels Donald Tabor 201005706 Drew Garvie 201102361 Darcy McHugh 201102183 Adam Olsen 201102985

  2. Performance Overview (2018) • Sales:$13,298,680 • COGS:$7,076,874 • Units Sold (Total): 24,024 units • Mountain: 21,056 units at $709 • Road: 2,968 units at $1650 • Expenses: $3,177,017 • Profit:$2,311,740 • Shareholder Value: $23.56 • Earnings Per Share: $2.31

  3. Pricing and Quality Strategy • Pricing: • Mountain Price Point: Mid-Low, $709 • Road Price Point: Mid, $1600 • Quality: Low quality rating compared to other firms

  4. Financial Analysis • Sales have underperformed industry - Sales increased from 2014-2018 - COGS remained consistent over time (Avg. 56.3% of sales) • Expenses have increased over time, sales revenue increased as well • Profit after tax of just over 2.3 million (2018) - approximately 1.5 million below the industry average

  5. Financial Analysis • Sales increased 83.6% between 2015-2017 • 29% decline moving into 2018 • 36% decrease in COGS from 2017-2018

  6. Financial Analysis 2017 • 2017 was our best year in terms of firm performance • $18.8 million in sales • $10.9 million COGS • Gross margin of $7.8 million • Net Income of $3.5 million

  7. 2014-2018 I/S Vertical Analysis • Slight decrease in COGS over time • Gross margin increased over time • Net income increased over time

  8. I/S Vertical Analysis • The cost of goods sold in 2018 in relation to sales (53%) has decreased from that of 2017 (57%). • 2018 COGS is slightly higher than the industry average of 52%. • Gross Margin has increased over the last five years to 47% of sales, just above the industry average of 45%. • Net Income went down from 19% of sales in 2017 to 17% which is on par with the industry average.

  9. I/S Horizontal Analysis • Growth in revenue from 2014-2017 • Decrease in sales revenue in 2018

  10. I/S Horizontal Analysis • 2014-2017 Wheels experienced growth in sales revenue, COGS and net income • In 2018 management decisions lead to a decline in sales revenue and net income • Reason for decline: • Excess inventory • Did not reach forecasted sales for our road bicycle

  11. Wheels: Ratio Analysis (2018) • Current Ratio: 15.41 -Inventory at year end was high • $12.4 million in cash during this period ensures day-to-day operating costs are covered • Debt-to-Owner’s Equity: 0.028 - Low debt-to-equity ratio, low risk firm to invest in • Return on Sales 0.17 - Return on sales is undesirable

  12. High NAMKS - $1,700 *Wheels - $1600 RideIt. - $1,600 Mac Wheels - $1,550 2WD - $820 RideIt. - $720 Pedalz - $720 *Wheels - $709 NAMKS - $700 Mountain Road Youth Mac Wheels - $695 Cycle Solutions - $675 2WD - $425 Pedalz - $385 Mac Wheels - $380 Low