Envy Rides

Executive Summary Envy Rides Incorporated is a motorsport recreational dealership. It was opened in 2007 and is located in Mississauga, Canada. The owner, Jacob Hessels, does not only make it his business to sell recreational vehicles with a focus on the motorsport industry but also to store them for a certain period. Sufficient money supply is needed in order to run the business successfully in the future. Therefore the owner of Envy Rides is recently asking for an amount of $60,000 long term loan for its longterm expansion and a $450,000 working capital loan for operations in order to manage seasonal fluctuation in sales. In the previous weeks a team of junior consultants has analyzed the company’s performance of the past three years, from 2007 to 2009. Afterwards it dares to give a projection of the future situation. This consultancy case report contains of an analysis of the past financial situation with the focus of the years 2007, 08, 09 and of the macroeconomic factors that influenced Envy Rides’ performance. In the latter case the whole decade from 2000 onwards will be examined. According to the research made Envy Rides faced a stable economic environment in Canada. It is generally characterized by an increasing GDP and rising living standards. Although it was also been affected by the financial crisis, it seems to have been recovered rather quickly. Of great significance is the fact that the interest rate is at a low point of 0,2 %. This again gives the business the opportunity to borrow money cheaper than before. Analyzing the past financial performance, it becomes apparent that Envy Rides had a rather high net profit margin of almost 5 %, which compared to the industry level is higher. Even though it was confronted with a high level of inventory, Envy Rides has managed to convert it into cash. As a consequence, Envy Rides is not only profitable but also liquid. Besides, the business was also able to pay back the interests. Summing it up it can be said...