Business Systems Case Study

Business Systems Case Study

  • Submitted By: sisi99
  • Date Submitted: 02/02/2009 12:38 PM
  • Category: Business
  • Words: 341
  • Page: 2
  • Views: 881

Business Systems Case Study {draw:frame} The above chart describes the pattern in which the sales of motorbikes have changed throughout the period of 2002 till 2006; thus we are able to deduce that the Dirt Bike’s best performing product is Enduro 550 and the worst performing product is MOTO {draw:frame} It is clearly evident that there is a significantly large difference between domestic and international sales. Based on the above graph, we can conclude that generally domestic sales constitute a great proportion of the total sales (91.1%) while international sales are insignificant in comparison to the total sales (8.89%). Although international sales seem to have grown over the years, however this increase had very little effect on the total outcome. On the contrary, Domestic Sales have witnessed a steep decline after reaching its peak by the year 2005. Total domestic sales/total sales= 38239/41969 Total international sales/total sales= 3730/41969 According to the comparative income statements, sales are not growing steadily, since the growth rate from year 2004 to 2005 was 4.12%, but -6.12% from year 2005 to 2006. Percentages of Cost of goods sold compared to revenues are as follows: We can notice that the % of cost of goods sold to sales is increasing. Moreover, operating expenses are also increasing. From year 2004 to 2005, they increased by 18.9%, and by 7.19% from year 2005 to 2006. Consequently, gross and net incomes are decreasing. According to the comparative balance sheets, we can compute the debt to equity ratio, which forms an image of the firm’s capital structure: Formula: (Total debt/Total equity) x 100 This reveals that the company is heavily loaded by debt and especially long term debt, which creates an obstacle to finance new products and information systems; since they require long term planning and financing. However, the company’s liquidity is still in a good state, and can afford paying...

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