Velocity Edge -Financial Analysis

Summary

Report submitted for Onyx Data DataDNA ZoomCharts Mini Challenge, August 2024. The report was built based on Fitness Company Finance Dataset and includes ZoomCharts custom Drill Down PRO visuals for Power BI. 

Author's description:

This analysis explores the financial performance of various business lines within Velocity Edge, a fictional U.S.-based sports company. The data covers a single year, limiting long-term trend observation. The company operates nationwide, following the U.S. sports calendar. While comprehensive, the analysis would benefit from additional product details to provide deeper insights.

Limitations:

• The data spans only one year, restricting the analysis of long-term trends.
• The analysis assumes nationwide operations, aligned with the U.S. sports calendar.
• Additional product information could have enhanced the depth of the analysis.

Financial Terms:

• Revenue: Total sum of all revenue sources.
• COGS (Cost of Goods Sold): Total sum of all costs associated with goods sold.
• Gross Profit: Revenue minus COGS.
• OPEX (Operating Expenses): Total sum of all operating expenses.
• EBIT (Earnings Before Interest and Tax): Gross Profit minus OPEX.
• Interest and Tax: Costs related to interest payments and taxes.
• Net Profit: EBIT minus Interest and Tax.
• Expense: Total sum of all expense categories.

Margins are calculated as a percentage of revenue.

Insights:

• While sports equipment generates higher revenue than sportswear, it has a much lower net profit due to high COGS. Sales expenses for sports equipment are nearly 3.5 times higher than those for sportswear, significantly reducing profitability.

Recommendations:

• Increase Marketing Spend: Focus on December, May, and June, aligning promotions with key sports events and seasonal trends. Adjust marketing budgets based on past performance, regularly reviewing strategies for effectiveness.

Key Trends:

• Sports Equipment:

  • MLB Season (October): Expect a sales spike during the playoffs and World Series, driving demand for baseball gear.
  • NFL Draft (May): Anticipate increased sales fueled by interest in football gear.

• Sportswear:

  • NBA Finals (May and June): Sales of sportswear, particularly basketball apparel, peak during the NBA Finals.

• All Sports Gear:

  • MLS Season (December): December typically sees increased sales across all sports gear categories due to the MLS Cup and holiday shopping.

Nutrition and Food Supplements:

The net profit margin for Nutrition and Food Supplements is currently around -39%, with the highest operating expenses among all business lines. To improve this, consider the following strategies:

1. Cut Costs and Adjust Prices: Identify ways to reduce expenses and set competitive prices that meet market demand.
2. Increase Marketing Efforts: Enhance promotional activities with special offers and loyalty programs to attract more customers.
3. Match Products to Market Needs: Conduct market research to understand customer preferences and consider expanding the product range to include trending flavors or items.
4. Track Performance and Gain Insights: Regularly monitor financial performance and use customer surveys to gather insights on preferences and needs.