DIGITAL PORTFOLIO PROJECT PART III



DIGITAL PORTFOLIO PROJECT PART III

BUS 340—SECTION 2

FALL 2007

Incognito

Brittany Crossland & Tracy Russell

Chapter 2, page 70

Problem: Analyze Financial Performance

Required Business Skills: Financial statement analysis

Required Software Skills: Spreadsheet charts and formulas

Project Name: Dirt Bike’s financial analysis

Description (Exercise 3):

As part of our analysis of the company for management, we have been asked to analyze data on Dirt Bike’s financial performance. Therefore, the following includes such analysis by way of using Dirt Bike’s income statement, summary balance sheet, annual sales, and total domestic versus international sales.

Solutions (Exercise 3):

1. Dirt Bike’s best and worst performing products are Enduro 550 and Moto 450 respectively. We figured this by calculating the total sales per model using the formulas below.

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The following graph further illustrates our findings (through the years 2001 and 2005):

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The proportion of domestic to international sales is a bit overwhelming. Domestic sales account for 91% of Dirt Bike’s total sales, while international accounts for 9%. To illustrate this we utilized the following formulas.

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The graph below represents the domestic versus international sales. One can definitely see the huge disparity between the two.

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Upon further examination, we found that international sales have not grown relative to domestic sales for each year. As shown below, it seems as though when one increases in growth, the other decreases. In 2002 and 2003, international sales were growing, while domestic sales were declining. The opposite seemed to occur in 2004 and 2005.

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2. From 2003 to 2004 sales increased by $2,534. Then, from 2004 to 2005, sales decreased by $3,919. Thus, one can see sales are not growing steadily. In fact, they are in flux.

By finding the gross profit, which is the revenue minus the cost of goods sold, we were able to compare the cost of goods sold and the revenues. For each year the gross profits are positive, but they are decreasing.

By finding the gross margin(gross profit/revenues) for each year, we were able to determine whether the gross margin is increasing or decreasing. We found that the gross margin is decreasing.

The net margin, which is net profit divided by the revenues, has a decreasing trend, too.

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Operating expenses are increasing. This is most likely due to the growth of the company. Likewise, their debt is increasing.

We found the company’s debt for each year by taking the total assets and subtracting the total liabilities and stockholder’s equity.

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Although the company’s debt is increasing, they have assets and they should still be able to finance the development of new products and information systems.

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DIGITAL PORTFOLIO PROJECT PART III

BUS 340—SECTION 2

FALL 2007

Incognito

Brittany Crossland & Tracy Russell

Chapter 5, page 174

Problem: Managing Inventory through database technology

Required Business Skills: Inventory Management

Required Software Skills: Database design; querying and reporting

Project Name: Sylvester’s Relational Database (Suppliers and Products)

Description (Exercise 4):

Sylvester’s Bike Shop is a small business that sells road, mountain, hybrid, leisure, and children’s bikes. They currently purchase bikes from three suppliers, but plan to add new suppliers in the future. Due to this growth, Sylvester’s needs a database system to manage this information.

Solutions (Exercise 4):

1. [pic]

2. [pic]

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3. [pic]

4. This database could be enhanced to further improve management of the business by perhaps utilizing online analytical processing (OLAP) which would enable all users (Sylvester’s and suppliers) to view the same data. This may help make purchase orders more streamlined. It would also help Sylvester’s in that they would be able to forecast sales with more preciseness. Furthermore, fields such as type of delivery used (ground, 2-day, etc). Tables that could be added would be an order table that lists date last ordered, number ordered, supplier name and number, and order number. This may make accounting and keeping track of incoming inventory easier. Additional helpful reports would be the outgoing dollars to each supplier.

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