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Finance & Accounting
Pages 4 (1004 words)
Elite Running Inc. Identification of changes in company’s business and industry: using procedures The changes in the business of Elite Running Inc. could be identified by comparing the balance sheets of the company for the year of 2002 and 2003. The significant changes or developments in the business have been explained as follows…
The inventory of Elite rose by 39% in 2003 as compared to 2002. The rise in the level of inventory was preplanned by the management in order to be prepared to grab the offers from the suppliers when they offer favorable prices for the company. The changes also indicate that while the sales have declined for the company by 24%, the gross profits have declined by 53.8%. This fall in gross profits was mainly due to the changes in the product prices due to the change in competitive market scenario with the appearance of a new entrant named, Stampy. The other significant changes include fall of retained earnings of the company by 11.2% and the fall of equity by 8.4%. Explanation for tick-marks b, e & k The explanation for the tick-marks has been explained as follows. Tick-mark b The fall in the accounts receivable of Elite Running Inc. in 2003 as compared to the value of 2003 could be explained by the fall of sales figures of the company. Due to the fall in the level of sales volume of the company, the credit offered for sales also reduced. Thus the accounts receivable also declined in 2003 as compared to 2002. Tick-mark e The inventory of the company increased by 17 million dollars which is a rise of 39% in inventory level of 2003 as compared to that of 2002. ...
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