President of Financial PerspectivePresident of Financial Perspective Amanda Amanda ForgioneForgione

President of Customer PerspectivePresident of Customer Perspective Meghan Meghan RyanRyan

President of Internal ProcessesPresident of Internal Processes Keith BurseyKeith Bursey

President of Learning and GrowthPresident of Learning and Growth Janine Janine TomalaTomala

CEO of Extreme BikesCEO of Extreme Bikes Chris LeasorChris Leasor

Financial GoalsFinancial Goals

• Achieve Gross Margin of 40%Achieve Gross Margin of 40%

• Increase Shareholder Value by 10% Increase Shareholder Value by 10% AnnuallyAnnually

• Increase Sales RevenueIncrease Sales Revenue

• Lower Costs of Goods SoldLower Costs of Goods Sold

• Increase Net IncomeIncrease Net Income

HypothesisHypothesis

• Decrease cost of goods sold in order Decrease cost of goods sold in order to achieve our financial goals.to achieve our financial goals.

• By decreasing our advertising we By decreasing our advertising we thought we could cut the cost of thought we could cut the cost of goods sold and achieve our goals.goods sold and achieve our goals.

•Shareholder value increased from 2008-2011 by 53.3%

•$5.09-$3.32 x 100 = 53.3% $3.32

• Increase caused by the effects we made on our revenue growth• Targeting our net profit and cost of goods sold.

$0.00$1.00$2.00$3.00$4.00$5.00$6.00

Shareh

older

Pric

e

2008

2009

2010

2011

Gross Margin increased as we decreased our cost of goods sold and also as we tried to increase our sales.

$1,789,600 X 100 = 31.2%$5,725,740

$3,468,680 X 100 = 43.1%$8,037,450

$3,197,560 X 100 = 42.8%$7,458,550

$3,019,551 X 100 = 43.2%$6,982,101

Period of Period of YearYear

Gross Gross MarginMargin

Gross Margin %Gross Margin %

2008 2008 $1,789,600$1,789,600 31.2%31.2%

20092009 $3,468,680$3,468,680 43.1%43.1%

20102010 $3,197,560$3,197,560 42.8%42.8%

20112011 $3,019,551$3,019,551 43.2%43.2%

Period Period YearYear

ValueValue PercentagePercentage

20082008 $5,725,740$5,725,740 (29.5)%(29.5)%

20092009 $8,037,450$8,037,450 40.3%40.3%

20102010 $7,458,550$7,458,550 (7)%(7)%

20112011 $6,982,101$6,982,101 (6.3)%(6.3)%

$6,982,101-$5, 725,740 X 100 = 21.9% $5, 725,740

Our sales revenue growth increased from 2008-2011 by 21.% Increase in revenue growth due to our decrease in cost per goods sold

Road Bike

Period YearPeriod Year Advertising Advertising ExpenditureExpenditure

20082008 $870,000$870,000

20092009 $525,000$525,000

20102010 $525,000$525,000

20112011 $525,000$525,000

$525,000-$870,000 X 100 = (39.6)% $870,000

Period YearPeriod Year Advertising Advertising ExpenditureExpenditure

20082008 $400,000$400,000

20092009 $270,000$270,000

20102010 $270,000$270,000

20112011 $270,000$270,000

$270,000-$400,000 X 100 = (32.5) % $400,000

Mountain Bike

Period Year Net Income2008 ($1,512,790)2009 $931,5542010 $533,5122011 $140,777

$140,777-($1,512,790) X 100 = 90.6%($1,512,790)

By decreasing our advertising expenditure for both bikes we created a greater gross margin that lead to a greater net income

Decreased by 1.29% from 2008-2011

Improve efficiency to improve employee performance

Production and Efficiency:

Year Value

2008 .77

2009 .70

2010 .73

2011 .76

.76 - .77 X 100 = (1.29%)

.77

Increased by 3.65% from 2008-2011

Have high employee skills

.85-.82 X 100 = 3.65% .82

Quality Index:

Year Value

2008 .82

2009 .80

2010 .83

2011 .85

*Creating a Better Quality Awareness

- We only increased the awareness index by a small amount of 3.22%. We should have raised in more.Year Percentage

2008 9.33%

2009 9.61%

2010 9.69%

2011 9.64%

Calculations:

9.64 - 9.33 X 100 = 3.32%

9.33

* For the Mountain Bike segment are awareness index decreased by (27.5%)

YearPercentage

2008 14.96

2009 12.15

2010 11.30

2011 10.82

* This is due to our cuts in advertising, we did this to increase our gross margin

Calculations

10.8 – 14.9 X 100 = (27.5%)

14.9

Weeks in Demand

2008 2009 2010 2011

Mountain Bikes 0 8 22 38

Road Bikes 20 12 11 20

-Our Weeks in Demand is too high, due to lack of sales

*Delivery Index for both the Mountain Bike segment and the Road Bike segment stayed constant at 1.00.

Internal ProcessesInternal Processes

20082008 18.74 18.74

20092009 18.74 18.74

20102010 18.74 18.74

20112011 18.74 18.74

Period Year Value

Road Bike SegmentStyle and Design

20082008 44.0044.00

20092009 44.0044.00

20102010 44.0044.00

20112011 44.0044.00

Period Year Value

Mountain Bike SegmentStyle and Design

ConclusionConclusion

We achieved our gross margin goal We achieved our gross margin goal by achieving 43.2%.by achieving 43.2%.

We increased our shareholder value We increased our shareholder value by 53% over a four year period.by 53% over a four year period.

Our costs of goods sold decreased.Our costs of goods sold decreased. Net profit was significantly increased Net profit was significantly increased

over the last 4 years.over the last 4 years.