Velocity Edge Financial Analysis

Project Overview:

This analysis delves into the financials of various business lines, providing insights into their performance. The data covers only one year, which limits long-term trend observation. The company operates across the U.S. and follows the U.S. sports calendar, though additional product details would have enriched the analysis.

Limitations: The data covers only one year, which limits the ability to observe long-term trends. The analysis assumes the company operates across the U.S. and follows the U.S. sports calendar. Additional product details would have enhanced understanding and insights.

Financial Terms:

• Revenue: Sum of all revenue groups

• COGS (Cost of Goods Sold): Sum of all costs of goods sold

• Gross Profit: Revenue - COGS

• OPEX (Operating Expenses): Sum of all operating expenses

• EBIT (Earnings Before Interest and Tax): Gross Profit - OPEX

• Interest and Tax: Costs associated with interest and taxes

• Net Profit: EBIT - Interest and Tax

• Expense: Sum of all expense groups

Margins are calculated based on revenue.

Insights:

• Although sports equipment generates higher revenue compared to sportswear, it has a much lower net profit due to high Cost of Goods Sold (COGS). Sales expenses for sports equipment are nearly 3.5 times higher than those for sportswear, significantly impacting profitability.

Recommendations:

• Increase Marketing Spend: Focus on December, May, and June to drive sales through strong promotions and campaigns during these peak times. Align marketing with sports events and seasonal trends. Adjust marketing budgets based on past performance and results, and regularly review strategies for effectiveness.

Key Trends:

Sports Equipment:

• MLB Season (October): Expect a spike in sales as the playoffs and World Series boost interest in baseball gear.
• NFL Draft (May): Anticipate increased sales from the buzz around football gear.

Sportswear:

• NBA Finals (May and June): Sales of sportswear, especially basketball apparel, peak during the NBA Finals due to high interest in basketball-related clothing.

All Sports Gear:

• MLS Season (December): December generally sees a rise in sales across all sports gear categories as the MLS Cup and holiday shopping increase demand for soccer equipment and apparel.

Nutrition and Food Supplements:

Our net profit margin for Nutrition and Food Supplements is currently around -39%, with the highest operating expenses. To address this issue, consider the following:

1. Cut Costs and Adjust Prices: Reduce expenses and set competitive prices.
2. Increase Marketing Efforts: Boost promotions and use special offers or loyalty programs.
3. Match Products to Market Needs: Research preferences and expand to include trending flavors or products.
4. Track Performance: Monitor financials and conduct surveys for insights.