3. Table of Contents
Letter to Shareholders……………………………………………………………………… 1
Mission Statement………………………………………………………………………… 3
Management Analysis……………………………………………………………………… 4
Competitive Positioning……………………………………………………………............. 5
Income Statement Analysis………………………………………………………………… 6
Balance Sheet Analysis……………………………………………………………………… 9
Financial Analysis………………………………………………………………………….. 11
What Future Holds? ………………………………………………………………………... 12
Income Statement
Balance Sheet
4. Letter to Shareholders
To Shareholders,
ZDS Bikes Shop’s mission was to create the most amazing bikes for the people, who would have
the wonderful experience by using our ZDS bikes. Our team tried our best to fulfill those goals
which we had in our mind. But unfortunately, we did get succeed to accomplish our goals. In the
comparison of other competitors, we are currently ranked on the 5th position in terms of
Shareholder Value. As of 2022, our firms Shareholder value is $6.15 and highest competitor
SHV is $144.15 which is Hanuman Bikes. Moreover, we didn’t do as good as other competitors
because of making poor decisions every year plus we didn’t produce more than two products and
didn’t modify the ones we had such as Adventures bike and Racer bike. Also, ZDS bikes market
share price was 2.2% which was the lowest amongst other competitors; highest was 42.2% which
was Hanuman Bikes.
Results of 2022
Shareholder value: $6.15
Profit: (1,086,378)
Cash: 6,401,143
Sales: 8,724,385
Mistakes we learned:
Should have used the money to launch new products such as kids’ bike, commuters’ bike and
leisure bike
Should have made efficient decisions every year
Also, we didn’t make decisions as a team which we should have for the company’s benefit
5. Beginning of the year, the firm was doing well then we were steady from year 2018 to 2020 then
in 2022 we went down to $4.7 million. In 2017, we launched racer bike which made a profit for
our firm which was around S10 million. From the previous data, we are going to make best
decision for the firm because our team learned from the mistakes and we promise to make ZDS
the best firm in the future. Also, we will try our best to increase the shareholder value. So, our
team wants to thank you for believing us and supporting us.
Sincerely,
ZDS Bikes Shop Team
Dhruvi Gandhi, Zanab Khan, Shivam Singh
6. MissionStatement
“ZDS Bikes shop aim to producetop bicycles in the industry, which could benefit
our company and the wide number of consumers. Also, our aim is to satisfy
customers, shareholders, and retailers because it is our belief that each stakeholder
is intrinsically connected.”
These are the bikes which the firm launched
Adventure Bike launched in 2016
Racer Bike launched in 2017
7. Management Analysis
ZDS Bikes was steady for beginning of the years, but we didn’t realize how the competitors
getting so competitive. Our firm made mistakes and misunderstood the concept that led us to not
doing well as we thought. The mistakes such as not pricing the bikes right, not raising the
dividends and brand advertising. We didn’t learn from our mistakes right away, if we would then
we could have been competing with top three competitors. Now, when the team looks back at the
data of our company we realized our mistakes and we will be making efficient in order to get
succeed. Our main goal is to increase the firm’s shareholder values, modifying the recent
products and launching more products.
Poor Management
ZDS Bikes shop had a poor management since our team didn’t work as a team. To run a
business, you need to have a proper management in order to be successful. Our teams made
decisions differently and we never discussed how we should manage the business of bikes. Lack
of poor management skills, our team is very disappointed with ourselves, but we will make sure
this will not happen in the future.
Our firm’s strategy such as pricing the bikes, advertising and brand awareness, manufacturing
lines were bit of lacking. Racer bikes increased our company’s profit but now Adventures bikes.
In year 2018, we should have launched or modified the product to gain the company’s profit. In
manufacturing section, we didn’t offer good salary to the workers and we only had 85 employees
and the firm should have trained more per work and SCU was only 28,000.
8. Competitive Positing
Above is the pie chart of Market Share based on retail dollars and ZDS Bikes shop had the
lowest market share.
Multifirm Economic Value Created
9. This measures the business view as an investment which must produce a certain on the capital
invested in it. ZDS Bikes shop is doing better than the two competitors which are HAM bikes
and Max Bikes.
ZDS Bikes Shop stands rank 5th in the terms of Shareholder Value. Also, our firm has the lowest
gross margin as in the table shown which means our firms total sales revenue retains after
incurring the direct costs associated with producing the goods and services which sold by the
company. We have a book equity ratio of 0.11 which measures the company’s financial leverage
and it indicates that how much debt a company is using to finance its assets relative to the
amount of value represented in equity’s. So, 0.11 is a bit over leveraged which will make it
difficult for the firm to borrow money.
10. Income Statement Analysis
Sales Revenue against competitors
In a comparison with competitors, our firm had the lowest sales revenue in 2022 as you can see
in the graph above.
Sales Revenue of ZDS Bikes Shop
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
20,000,000
2016 2017 2018 2019 2020 2021 2022
Sales Revenue
11. In the graph above, it show ZDS Bikes sales revenue growth. In 2017, our firm made the most
revenue because we launched racer bikes which was successful among the other years. Revenue
is the amount of money which company receives during specific period for the merchandise.
Gross Profit
Gross Profit is a company’s total revenue minus the cost of goods sold which means it is the
profit after the deducting the costs associated with making and selling its products. As in the
graph above, 2017 was better year than others because of having the highest revenue in that year.
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
2016 2017 2018 2019 2020 2021 2022
Gross Profit
12. Net Income
Net income is the number which shows how profitable the company is over a period of time. Net
income is a company’s total profit. And as in the chart above, in 2022 the company had a net
loss. So, the firm may experience cash flow difficulties because of not having enough earnings to
cover the expenses. We might seek some financial help to turn the company around.
-1,500,000
-1,000,000
-500,000
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
2016 2017 2018 2019 2020 2021 2022
Net Income
13. Balance Sheet Analysis
Balance sheets are important when it comes to how well the firm is doing. It shows how much
the firm owns assets, owes liabilities and the amount invested by the shareholders.
Equity
Numbers of Shares Outstanding 2,000,000
Share Capital 2,000,000
Retained Earnings 13,777,538
Total Equity 15,777,538
Retained earnings is important because companies retain the earnings in order to invest into the
areas where company can have the growth opportunities. For example, launching new products,
or modify the ones which the firm already has or spending money on research and development.
Current Liabilities
Overdraft $0
Company Tax to Pay $0
$0
14. Current liabilities mean firm’s debts or obligations which are due within a year. Usually, these
bills are due to creditors and suppliers and our firm doesn’t owe anything to anybody as current
liabilities is a zero of 2022.
Non-Current Liabilities
Long Term Debt $ 1,800,000
Loans from Owner $0
$1,800,000
Non-current liabilities is firm’s long term obligations which are not due within a year. For
example, long term borrowing, bonds payable, etc. As of 2022, our firm has the long term debt
of $ 1,800,000 but it hasn’t have to be paid within a year. So, our team will try to increase
revenue and profit the following year so we can pay off the debt by next year.
15. Financial Analysis
2016 2017 2018 2019 2020 2021 2022
ROS .16 .17 .17 .16 .14 .08 .12
ROA .28 .28 .21 .16 .09 .05 .06
ROE .43 .38 .26 .19 .12 .06 .06
ROS is used to measure company's operational efficiency and ROS is also known as a firm's
operating profit margin. The measurement shows how much profit is being produced per dollar
of sales. If ROS increases which means that a firm is growing efficiently and in year 2017 and
2018 ROS ratio was the highest than other years. On the other hand, lower ROS means financial
troubles.
ROA indicates how much profitable a firm is relative to its total assets. It gives an idea as to how
efficient management is at using its assets to generate earnings. As in the table above, beginning
of the first three years our firm was using enough assets to generate earning, but from 2019 the
firm didn’t do well because the firm had a lack of innovation of the bikes.
ROE is the amount of net income returned as a percentage of shareholders equity. It measures a
corporation's profitability by revealing how much profit a company generates with the money
shareholders have invested. So, the higher the ROE the better because that shows the growth in
the company. In the table above, our firm’s ROE is decreasing from the beginning year.
16. What Future Holds?
Our ZDS Bikes shop team came to solution that we are going to modify the products we have
and planning to launch new products. Also, we will be making efficient decisions every year as
team and will have a strategy. Moreover, the firm is going to increase the stockholders value by
issuing bonds. The team also came up with that we will spread more awareness of ZDS Bikes
shop product advertising such as commercial on televisions, radios, magazines etc. and brand
advertising. Or venturing into the foreign markets, open new factories so that way cheaper
manufacturing prices over the seas.
This is the Multifirm Brand Awareness graph and it show how ZDS Bikes shop has the lowest
awareness among the other competitors.
The future of the ZDS Bikes shops will be better because of the mistakes we learned from and
are going to work as a team to make efficient decisions every year.
