Jet Financial Analysis

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Submitted By laxmi9846
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Competition Bikes, Inc.
Competition Bikes, Inc. makes bicycles for professional and other highly accomplished riders who compete in bike races, biathlons, and triathlons. Sixty percent of all race winners have been victorious using a Competition Bikes bicycle when at least ten percent of the entrants were also using a Competition Bikes bicycle. This extraordinary success rate consistently is a topic of conversation among racers and this word of mouth advertising has been effective in promoting sales. The company also uses these statistics to promote sales, although its advertising efforts have been quite limited. The Main Competitor Two Wheel Racing, Inc. is the only other manufacturer that offers a competitive product in this market space. Their product weighs only a few ounces more than the bikes made by Competition Bikes, but Two Wheel Racing builds a chain driven product. Two Wheel Racing is also a publicly traded company. Their financial ratios are provided for comparison and analysis.

THE COMPANY AND ITS CENTRAL OPERATIONS
OWNERSHIP Larry Ferguson formed the company in 2001 in his garage. An avid racer, Larry often heard comments from other riders about how heavy and unreliable their bikes were. Larry identified and sought to remedy this market niche by creating a specialized product that would satisfy the needs of racers. His new company also proved to be a vehicle for financial success. Early success prompted Larry to take the company public after three years in order to acquire sufficient capital to build the two current manufacturing facilities. His bikes enjoyed high demand and good profit margins. Larry continues to be the CEO of the Competition Bikes, Inc. and retains a 40% interest of company shares.

STANDARD COMPANY OPERATING PROCEDURES
Each of the manufacturing locations for Competition Bikes uses operating procedures based on department and…...

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