Dhruvi Gnadhi , Zananb Khan, Shivam Singh

ZDS Bikes Shop Report

ZDS Bikes ShopDhruvi GandhiZanab KhanShivam Singh

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

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

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

Mission Statement

“ZDS Bikes shop aim to produce top 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

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.

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

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.

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

2016 2017 2018 2019 2020 2021 20220

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

Sales Revenue

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

2016 2017 2018 2019 2020 2021 20220

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

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.

Net Income

2016 2017 2018 2019 2020 2021 2022

-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

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.

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

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.

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.

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.