C216 Task 2















Krank It Up Bikes Stakeholder Report

First and Last Name





Stockholder Report


The report seeks to provide insights to the board of directors and stakeholders by analysis of critical company strategic initiatives that were pursued to achieve the long-term goals and ambitions. Four selected strategic actions will be analyzed and explained on how they drove the financial and non-financial choices of the organizations.

  1. Strategic decisions that drove financial decisions

Strategy 1: Investment in research and Development

Expanding into new markets is a significant corporate strategic thrust that can drive various financial and non-financial decisions. To develop into new markets successfully, Krank It Up Bikes decided to invest in market research. The strategy includes gathering data on consumer preferences, market trends, and competitor analysis and allocating a budget for comprehensive market research initiatives. This involved dedicating resources to in-house research teams and research and development firms. Investment in market research is vital for understanding the dynamics of the new market, identifying opportunities, and mitigating risks. It’s a financial decision because it requires a budget allocation. Table 1 shows the industry results for quarter three.




Industry Results for Quarter 3
Indicator Minimum Maximum Average Krank It Up Bikes
Total Performance 0.144 2.589 1.229 1.725
Financial Performance 3.403 16.129 9.691 12.073
Market Performance 0.145 0.290 0.224 0.290
Marketing Effectiveness 0.640 0.765 0.710 0.713
Investment in Future 6.784 10.853 8.438 7.405
Wealth 0.716 0.821 0.778 0.792
Human Resource Management 0.685 0.721 0.702 0.695
Asset Management 0.211 0.470 0.334 0.371
Manufacturing Productivity 0.548 0.730 0.653 0.730
Financial Risk 1.000 1.000 1.000 1.000
Reputation 0.619 0.652 0.637 0.627

Table 1: Industry Results for Quarter 3

The findings show an average position in terms of company performance before investment in research and Development. The reason for the average performance is that there was no researched information to aid in developing new products, which hindered Krank It Up Bikes from staying relevant, efficient, and competitive in a rapidly changing business environment. Companies that neglect R&D may find it challenging to thrive and are at risk of performing averagely or poorly compared to their peers who invest in innovation and research. Table 2 shows improved ranking after quarter 6.




Industry Results for the 6th Quater
Indicator Minimum Maximum Average Krank It Up Bikes
Total Performance 9.228 31.173 17.839 18.441
Financial Performance 49.999 71.384 61.029 55.530
Market Performance 0.105 0.152 0.122 0.111
Marketing Effectiveness 0.730 0.893 0.825 0.770
Investment in Future 4.553 5.741 4.944 5.741
Wealth 0.855 1.076 0.982 0.892
Human Resource Management 0.831 0.916 0.882 0.916
Asset Management 1.061 1.196 1.141 1.172
Manufacturing Productivity 0.674 0.870 0.780 0.870
Financial Risk 1.000 1.000 1.000 1.000
Reputation 0.663 0.812 0.729 0.812

Table 2: Industry Results for the 6th Quater

Table 2 shows improved performance in quarter six after incorporating research and Development in the company. Investing in research and Development ensures improved market research, vital for insights into new markets, identifying new opportunities and preventing risks that may lead to financial loss.

Strategy 2: Customer Satisfaction Improvement

Improving customer satisfaction as a critical strategic thrust significantly influenced corporate financial decisions. By prioritizing customer satisfaction, Krank It Up Bikes aimed to enhance its brand image, increase customer loyalty, and boost financial performance. The company invested in training customer service representatives to improve customer satisfaction. The strategic thrust inspired this financial decision to enhance customer satisfaction. By allocating resources to training programs, the company aimed to ensure that its customer service staff was better equipped to meet customer needs, resolve issues effectively, and provide excellent service.

The financial impact of this decision included training costs and staff time dedicated to training. However, this investment yielded several financial benefits. Customers who receive excellent service are likelier to remain loyal to the brand, make repeat purchases, and potentially refer others. High customer satisfaction can lead to increased customer retention, reduced churn rates, and higher customer lifetime value. As a result, improved customer satisfaction, driven by better-trained customer service representatives, can translate into increased revenue and profitability over the long term.

  1. NonFinancial decisions

Strategy 3: Improving new product design

Improving new product design as a critical strategic thrust can profoundly impact corporate decision-making, both financial and non-financial. When a company prioritizes new product design, it often drives various decisions beyond financial considerations. One non-financial decision that can be caused by the strategic thrust of improving new product design is the emphasis on fostering innovation and creativity within the design process. This decision centres on non-financial factors such as company culture, employee motivation, and the approach to product development. To remain competitive and meet evolving customer needs, the company prioritizes innovation and creativity as part of its product design process. This strategic thrust recognizes that merely investing in financial resources may not be sufficient to drive groundbreaking designs and cutting-edge products. Instead, the company aims to nurture a culture of innovation and inspire its design teams to think creatively. The emphasis on innovation and creativity influences employee morale and job satisfaction. It fosters a sense of purpose and excitement among design teams, motivating them to explore unconventional ideas and push the boundaries of product design. Creativity-friendly environments, open communication, and encouragement to take calculated risks are non-financial elements driving this decision.

  1. Explain twodecisions that you would change and why

Decision 1: Decreasing Investment in Employee Training

The company invested in employee training in Quarter 4, focusing on cross-training employees to be more well-rounded. However, the investment in training is modest and confined to that one quarter. Increasing the consistency and depth of employee training throughout all three quarters (Q4–Q6) and beyond is very important. Continuous training and skill development should be an integral part of the company’s corporate culture, especially when innovation and creativity in the design process are critical. Employees require ongoing skill enhancement and exposure to new ideas to drive the company’s recent product design efforts. Also, prioritizing employee training is crucial to maintaining a culture of innovation and ensuring employees can contribute their best to the new product design process. Continuous training helps employees stay up-to-date with the latest technologies and design trends. It also keeps them motivated and engaged. Fostering creativity and innovation requires employees to feel empowered and well-equipped, making consistent training investments essential.

Decision 2: Expanding into a New Market in Q5

The company planned to open a new store in Bangalore in Q5 as part of its expansion strategy. It is recommended that the company advance the timeline for opening the new store in Bangalore to Q4, moving the expansion plan forward instead of waiting until Q5, allowing Krank It Up Bikes to capitalize on the market potential and customer demand as quickly as possible. Delaying expansion might mean missing out on potential sales. Expanding into new markets is a strategic thrust, and the sooner this expansion occurs, the faster the company can grow its market share and revenue. Customer preferences and market dynamics can rapidly change, and early entry positions the company as an industry leader. Moreover, the financial benefits of opening a new store may be realized sooner, helping to offset any initial setup costs and enhance the financial performance.

Explain two decisions that had a positive effect and how including specific examples.

Favourable Decision 1: Market Research Investment in Q2

The company invested in market research in Q2, which provided valuable insights into customer preferences and market trends. The decision had a significant positive impact on Krank It Up Bikes’ market performance. It allowed the company to identify customer needs and preferences more accurately. With these insights, the company was able to tailor its product offerings and marketing strategies more effectively. In Q2, after analyzing the market research data, the company identified a growing demand for hybrid comfort ride tires. They quickly introduced these tires to their product lineup in the subsequent quarters, which led to increased sales in the “Speed” category. This strategic product addition boosted sales and enhanced customer satisfaction, aligning with the strategic thrust of improving customer satisfaction.

Positive Decision 2: Increasing Sales and Service Personnel

The company invested in additional sales and service personnel over the last three quarters to improve customer service and increase sales. The decision positively impacted the company’s financial performance and customer satisfaction. By having more dedicated sales and service personnel, the company was better equipped to engage with customers, address their needs, and provide timely assistance. In Q5, when the company expanded into the Bangalore market, it hired seven new salespeople to meet the increased demand. The strategic move boosted sales in the new market and improved customer service. Faster response times, better product knowledge, and enhanced customer support led to higher customer satisfaction scores.

Such decisions positively affected the company by aligning with the strategic thrust of improving customer satisfaction and overall market performance. They demonstrated that by investing in market research and expanding the workforce, the company could better meet customer needs, boost sales, and enhance its reputation. Improved customer satisfaction leads to repeat business, positive word-of-mouth, and long-term brand loyalty, all contributing to the company’s long-term success.

  1. Discuss your company’s financial projections and valuation in relation to the company’s quarter six (Q6) statement of cash flow, balance sheet, income statement (result found in Q7 tab), and Q6 stock history report by doing the following:
  2. Calculate a valuation of the company and explain the critical components of how you came to that valuation.
  3. Valuation Formula

The valuation of a company is a critical financial metric that signifies its worth. It is calculated using the formula:

Valuation = (Total Assets – Total Liabilities) + Total Equity

The formula essentially represents the company’s residual value after deducting all its liabilities from the total assets. It indicates the net worth of the business.

Quarterly Valuations

Quarter 1 Valuation

Total Assets (Quarter 1) = $1,313,750

Total Debt and Equity (Quarter 1) = $1,313,750

In Quarter 1, the company’s valuation can be calculated as:

Valuation (Quarter 1) = ($1,313,750 – $0) + $1,313,750 = $2,627,500

The initial valuation shows the net worth of Krank It Up Bikes in Quarter 1.

Quarter 2 Valuation

Total Assets (Quarter 2): $1,731,783

Total Debt and Equity (Quarter 2): $1,731,783

In Quarter 2, the valuation can be computed as:

Valuation (Quarter 2) = ($1,731,783 – $0) + $1,731,783 = $3,463,566

The valuation in Quarter 2 indicates an increase in the company’s net worth.

Quarter 3 Valuation

Total Assets (Quarter 3): $1,981,177

Total Debt and Equity (Quarter 3): $1,981,177

For Quarter 3, the valuation is computed as follows:

Valuation (Quarter 3) = ($1,981,177 – $0) + $1,981,177 = $3,962,354

The valuation demonstrates the company’s growing net worth in Quarter 3.


Quarter 4 Valuation

Total Assets (Quarter 4): $2,971,129

Total Debt and Equity (Quarter 4): $2,971,129

The Quarter 4 valuation is calculated as follows:

Valuation (Quarter 4) = ($2,971,129 – $0) + $2,971,129 = $5,942,258

The valuation in Quarter 4 reflects a substantial increase in the company’s net worth.

Quarter 5 Valuation

Total Assets (Quarter 5): $3,569,501

Total Debt and Equity (Quarter 5): $3,569,501

For Quarter 5, the valuation is calculated as follows:

Valuation (Quarter 5) = ($3,569,501 – $0) + $3,569,501 = $7,139,002

This valuation in Quarter 5 depicts further growth in the company’s net worth.

Quarter 6 Valuation

Total Assets (Quarter 6): $4,249,936

Total Debt and Equity (Quarter 6): $4,249,936

In Quarter 6, the valuation is determined as follows:

Valuation (Quarter 6) = ($4,249,936 – $0) + $4,249,936 = $8,499,872

The Quarter 6 valuation shows a significant increase in the company’s net worth, highlighting its financial strength.

These quarterly valuations show Krank It Up Bikes’ consistent net worth and financial health growth. It demonstrates the company’s ability to generate and retain value over time, a positive indicator for stakeholders and investors. As the company’s net worth continues to rise, it signifies its financial stability and potential for future investments and expansion. Table 3 represents the pro forma cash flow in quarter 6.

Pro Forma Cash Flow
Report Item Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 5 Quarter 6
Beginning Cash Balance 0 183,750 791,783 601,177 931,129 1,139,501
Receipts and Disbursements from Operating Activities
Revenues 0 637,100 750,825 1,964,500 4,488,450 4,771,950
– Rebates 0 14,800 15,700 0 0 0
– Production 0 250,454 300,126 715,026 1,696,556 1,785,062
– Research and Development 60,000 90,000 90,000 1,409,595 938,508 493,369
– Quality Costs 0 62,656 45,548 63,123 95,048 81,350
– System Improvement Costs 0 5,000 60,000 800,500 423,838 844,455
– Advertising 0 70,781 88,376 111,438 105,438 192,558
– Internet Marketing Expenses 0 2,000 2,000 14,126 5,731 54,500
– Sales Force Expense 0 45,103 72,782 136,551 264,283 328,475
– Store Expense 136,000 134,000 261,000 123,000 207,000 136,000
– Marketing Research 0 15,000 15,000 15,000 15,000 15,000
– Shipping 0 9,272 10,899 26,190 48,676 50,746
– Excess Capacity Cost 0 0 0 0 0 0
– Income Taxes 0 0 0 0 0 0
+ Interest Income 9,750 0 0 0 0 0
– Interest Charges 0 0 0 0 0 0
+ Other Income 0 0 0 0 0 0
– Other Expenses 0 0 0 0 0 0
= Net Operating Cash Flow -186,250 -61,967 -210,606 -1,450,048 688,372 790,435
Investing Activities
Fixed Production Capacity 480,000 480,000 480,000 720,000 480,000 720,000
= Total Investing Activities 480,000 480,000 480,000 720,000 480,000 720,000
Financing Activities
Increase in Common Stock 1,500,000 500,000 500,000 2,500,000 0 0
+ Borrow Conventional Loan 0 0 0 0 0 0
– Repay Conventional Loan 0 0 0 0 0 0
+ Borrow Emergency Loan 0 0 0 0 0 0
– Repay Emergency Loan 0 0 0 0 0 0
– Deposit 3 Month Certificate 650,000 0 0 0 0 0
+ Withdraw 3 Month Certificate 0 650,000 0 0 0 0
= Total Financing Activities 850,000 1,150,000 500,000 2,500,000 0 0
Cash Balance, End of Period 183,750 791,783 601,177 931,129 1,139,501 1,209,936

Table 3: Pro Forma Cash Flow


Pro Forma Balance Sheet
Report Item Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 5 Quarter 6
Current Assets
Cash 183,750 791,783 601,177 931,129 1,139,501 1,209,936
+ 3 Month Certificate of Deposit 650,000 0 0 0 0 0
Long Term Assets
+ Net Fixed Assets 480,000 940,000 1,380,000 2,040,000 2,430,000 3,040,000
= Total Assets 1,313,750 1,731,783 1,981,177 2,971,129 3,569,501 4,249,936
Conventional Bank Loan 0 0 0 0 0 0
+ Emergency Loan 0 0 0 0 0 0
+ Common Stock 1,500,000 2,000,000 2,500,000 5,000,000 5,000,000 5,000,000
+ Retained Earnings -186,250 -268,217 -518,823 -2,028,871 -1,430,499 -750,064
= Total Debt and Equity 1,313,750 1,731,783 1,981,177 2,971,129 3,569,501 4,249,936

Table 4: Pro Forma Balance Sheet


Stock History
Stock Type Name of Owner Shares Price Per Share Total Amount Quarter
Common Stock Executive Team 15,000 100 1,500,000 1
Common Stock Executive Team 5,000 100 500,000 2
Common Stock Executive Team 5,000 100 500,000 3
Common Stock Venture Capitalists 25,000 100 2,500,000 4

Table 5: Stock History




Income Statement
Report Item Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 5 Quarter 6
Gross Profit
Revenues 0 637,100 750,825 1,964,500 4,488,450 5,224,850
– Rebates 0 14,800 15,700 0 0 0
– Cost of Goods Sold 0 250,454 300,126 715,026 1,696,556 2,019,970
= Gross Profit 0 371,846 434,999 1,249,474 2,791,894 3,204,880
Research and Development 60,000 90,000 90,000 1,409,595 938,508 493,369
+ Quality Costs 0 62,656 45,548 63,123 95,048 88,602
+ System Improvement Costs 0 5,000 60,000 800,500 423,838 844,455
+ Advertising 0 70,781 88,376 111,438 105,438 192,558
+ Internet Marketing Expenses 0 2,000 2,000 14,126 5,731 51,585
+ Sales Force Expense 0 45,103 72,782 136,551 264,283 328,475
+ Store Expense 136,000 134,000 261,000 123,000 207,000 136,000
+ Marketing Research 0 15,000 15,000 15,000 15,000 15,000
+ Shipping 0 9,272 10,899 26,190 48,676 54,565
+ Excess Capacity Cost 0 0 0 0 0 0
+ Depreciation 0 20,000 40,000 60,000 90,000 110,000
= Total Expenses 196,000 453,812 685,605 2,759,522 2,193,522 2,314,609
Operating Profit -196,000 -81,967 -250,606 -1,510,048 598,372 890,271
Miscellaneous Income and Expenses
+ Other Income 0 0 0 0 0 0
– Other Expenses 0 0 0 0 0 0
= Earnings Before Interest and Taxes -196,000 -81,967 -250,606 -1,510,048 598,372 890,271
+ Interest Income 9,750 0 0 0 0 0
– Interest Charges 0 0 0 0 0 0
= Income Before Taxes -186,250 -81,967 -250,606 -1,510,048 598,372 890,271
– Loss Carry Forward 0 0 0 0 598,372 890,271
= Taxable Income 0 0 0 0 0 0
– Income Taxes 0 0 0 0 0 0
= Net Income -186,250 -81,967 -250,606 -1,510,048 598,372 890,271
Earnings per Share -12 -4 -10 -30 12 18

Table 6: Income Statement

  1. Calculate the projected financial return on investment (ROI) at the end of quarter six (Q6) and explain the effects that this return would have on an investor.

Initial Investment Calculation

The initial investment is an essential factor in determining an investor’s return on investment (ROI). In this case, the initial investment is calculated as the change in Common Stock for the Executive Team from the beginning of Quarter 1 to the end of Quarter 6. It is a measure of the equity invested during this period.

For Quarter 6, the change in Common Stock is $5,000,000, representing the total Common Stock at the end of the quarter. In contrast, at the beginning of Quarter 1, the Common Stock for the Executive Team was $0, indicating that no equity was initially invested. Therefore, the initial investment is $5,000,000 (Quarter 6 Common Stock)-$0 (Quarter 1 Common Stock), which equals $5,000,000. This amount signifies the equity infused into the company during the observed period.

Net Profit in Quarter 6

The net profit for Quarter 6 is stated as $890,271. The figure represents the total profit Krank It Up Bikes generated during that specific quarter. It is a fundamental financial metric that assesses the company’s profitability, indicating the surplus funds generated after deducting all expenses.

ROI Calculation

The ROI expressed as a percentage, is computed using the formula:

ROI = (Net Profit / Initial Investment) * 100

Substituting the values:

ROI = ($890,271 / $5,000,000) * 100 = 17.81%


The calculated ROI of 17.81% is significant for investors. It indicates that for every dollar invested, they can anticipate a return of approximately $0.1781, or 17.81 cents. The positive ROI reveals that the investment in Krank It Up Bikes is safe and productive.

A positive ROI is a favourable sign for investors as it signifies that their capital is effectively utilized to generate profits. The company’s ability to provide a return on the invested funds is critical for attracting and retaining investors. Moreso, it reflects positively on the company’s financial performance and management.

Investors tend to view a positive ROI as indicating that their investments are performing well and producing profits. A higher ROI can generate more investor confidence and potentially draw more capital into the business. Nevertheless, evaluating the ROI in the context of industry and market conditions is essential. Generally, a positive ROI is considered a positive outcome indicative of a successful investment.

Business Analysis


  1.  Analyze the effect on the overall financial performance of oneratio from each of the following categories, including the performance measures found within the industry financial ratios tab within the simulation:
  • liquidity ratios
  • activity ratios
  • leverage ratios
  • profitability ratios

To analyze the effect on Krank It Up Bikes’ overall financial performance, a focus will be on one critical ratio from each of the four categories: liquidity ratios, activity ratios, leverage ratios, and profitability ratios, considering data from Quarters 4, 5, and 6, with a focus on the definitions of the financial statistics.

  1. Liquidity Ratios

Jihadi et al. (2021) state that liquidity ratios measure a company’s ability to achieve its short-term financial obligations. In Quarter 4, Krank It Up Bikes had a Current Ratio 0.00. This ratio contrasts with the company’s current assets to its current liabilities. A Current Ratio below 1 indicates that the company’s existing assets were insufficient to cover its current liabilities, which could raise concerns about its liquidity. However, for Quarters 5 and 6, specific Current Ratio data is unavailable, making it difficult to assess the company’s liquidity in these quarters. Without this information, concluding the company’s ability to meet its short-term obligations isn’t easy.

  1. Activity Ratios

Activity ratios assess how efficiently a company uses its assets to generate revenue (Jihadi et al., 2021). In Quarter 4, Krank It Up Bikes had a Fixed Assets Turnover of 0.54. This ratio measures how effectively the company generates sales from its fixed assets. It implies the company generated $0.54 in revenue for every dollar invested in fixed assets. In Quarter 5, this ratio significantly rose to 0.96, indicating that the company used its fixed assets more efficiently to generate revenue, surpassing the industry average. By Quarter 6, the trend continued, with a Fixed Assets Turnover of 1.85, signifying a remarkable increase in asset utilization efficiency. These improvements indicate that the company became more skilful at generating sales from its fixed assets.

  1. Leverage Ratios

According to Markonah et al. (2020), leverage ratios evaluate a company’s reliance on debt for financing its operations. In all three quarters, Krank It Up Bikes maintained a Debt Ratio and Debt to Paid-In Capital ratio of 0.00. The Debt Ratio compares total debt to total assets, and the Debt to Paid-In Capital ratio compares total debt to shareholders’ equity. A ratio of 0.00 indicates that the company did not use debt to finance its operations. This approach minimizes financial risk and ensures financial stability.


  1. Profitability Ratios

Profitability ratios measure the company’s ability to generate profits relative to its revenue and capital (Ningsih and Sari, 2019). In Quarter 4, Krank It Up Bikes recorded a Net Profit Margin of -33.38%. This ratio indicates the percentage of each dollar of revenue that remains as profit after all expenses have been deducted. A negative Net Profit Margin suggest that the company incurred losses, but it was better than the industry average of -33.89%. By Quarter 5, the Net Profit Margin further improved to -76.87%, indicating that the company still faced losses but controlled costs more effectively. This improvement continued into Quarter 6, with a Net Profit Margin of -76.87%. These figures demonstrate that the company has been working on controlling its expenses, although it still operates at a loss.

To summarise the analysis, Krank It Up Bikes showed significant improvements in asset utilization (activity ratios) over the analyzed quarters and maintained a stable financial structure (leverage ratios). The profitability ratios, although negative, improved over time, indicating better control over costs and expenses. However, the company’s liquidity remained a concern, with the absence of specific Current Ratio data for Quarters 5 and 6. To continue improving overall financial performance, the company must maintain liquidity, control costs, and increase profitability.

  1. Analyze the beginning and ending cash positions from your statement of cash flows from quarter seven (Q7) for each of the following:
  • cash flow from operating activities
  • cash flow from investing activities
  •  cash flow from financing activities


In Q7, Krank It Up Bikes exhibited a promising financial performance across its cash flow categories, indicating efficient financial management and growth.

  1. Cash Flow from Operating Activities

In Quarter 7, Krank It Up Bikes demonstrated an improved performance in its core operations, with a net operating cash flow of $1,000,271 (as per the provided data). The positive cash flow reflects the company’s ability to generate substantial cash from everyday business activities. It suggests that Krank It Up Bikes efficiently managed its working capital, collected revenue from sales, and efficiently controlled its operating expenses. As a result, the company’s cash reserves experienced significant growth during the quarter.

The beginning cash balance in Q7 was $1,139,501, and the quarter closed with an ending cash balance of $1,419,771. This substantial increase of $280,270 shows the company’s ability to convert its operational activities into tangible cash flows. The strengthened cash position offers flexibility in managing day-to-day expenses, pursuing growth opportunities, and weathering unforeseen financial challenges. It also reflects positively on the company’s overall financial health and liquidity.

  1. Cash Flow from Investing Activities

According to the provided data, total investing activities in Q7 amounted to $720,000. The cash outflow primarily indicates investments made by the company, likely directed toward improving its fixed production capacity. Such investments are often vital for expanding and improving production capabilities. While it represents a cash outflow, it signals the company’s commitment to growth and belief in future revenue generation. Effectively managing investment in productive assets is vital for long-term sustainability.


  1. Cash Flow from Financing Activities

Similar to Q6, there were no significant financing activities in Q7, resulting in a total financing activity of $0 as per the provided data. The absence of financing activities indicates Krank It Up Bikes did not raise additional capital, acquire new loans, or pay back existing loans during the quarter. While this scenario may suggest financial stability, evaluating the company’s funding strategies and their alignment with its growth plans and capital requirements is essential.

In conclusion, Quarter 7 (Q7) witnessed Krank It Up Bikes continued generation of positive cash flow from its key operating activities, maintaining investments in fixed production capacity to support growth, and avoiding significant financing activities. This financial performance indicates the company’s ability to efficiently manage its working capital and convert its business operations into cash flows. The increase in cash reserves strengthens its liquidity and positions it well for future opportunities and financial stability. However, the absence of financing activities may call for further consideration in the context of the company’s long-term financial strategy.

  1.  Explain how threedecisions that you made and are shown on your conscious scorecard affected the company’s performance.

In Krank It Up Bikes’ conscious scorecard, three decisions were made that had significant effects on the company’s performance:

  1. Employee Involvement (Quarter 5)

In Quarter 5, the decision to focus on “Employee Involvement” received a “+,” indicating a positive action. This decision aimed at enhancing employee participation and engagement in several aspects of the business, such as workflow, equipment, materials, job assignments, and vacation schedules.

This decision likely resulted in improved teamwork, communication, and employee job satisfaction. A more engaged workforce can increase productivity, reduce turnover, and produce higher-quality output. Consequently, it can positively affect the company’s operational efficiency and product quality, contributing to better financial performance.

  1. Supplier Relationships (Quarter 5)

In Quarter 5, the decision to focus on “Supplier Relationships” received a “+,” indicating a positive action. This decision involved measuring and rewarding purchasing agents based on the cost and quality of incoming materials, parts, and services. Additionally, it aimed to work with suppliers to launch and maintain their quality improvement programs.

Improving supplier relationships can lead to better quality materials, cost savings, and a more reliable supply chain. As a result, Krank It Up Bikes could reduce production costs and improve product quality, which is vital for profitability. Collaborating with suppliers on quality improvement programs can lead to a more efficient and responsive supply chain, positively impacting financial performance.

  1. Health (Quarter 6)

In Quarter 6, the decision to invest in “Health” received a “+,” indicating a positive action. This decision involved setting up and running a health clinic that includes general practitioners and specialists for employees’ immediate families.

By providing comprehensive health services for employees and their families, the company can enhance employee well-being, reduce absenteeism, and potentially attract and retain top talent. Healthy employees are more productive, leading to increased efficiency and, ultimately, better financial performance.


These three conscious decisions reflect a strategic focus on employees, suppliers, and health, which can positively impact various aspects of the business. They can improve product quality, productivity, cost management, and employee well-being, which, in turn, contribute to a more robust financial performance for Krank It Up Bikes.




Jihadi, M., Vilantika, E., Hashemi, S. M., Arifin, Z., Bachtiar, Y., & Sholichah, F. (2021). The effect of liquidity, leverage, and profitability on firm value: Empirical evidence from Indonesia. The Journal of Asian Finance, Economics and Business8(3), 423-431.

Markonah, M., Salim, A., & Franciska, J. (2020). Effect of profitability, leverage, and liquidity to the firm value. Dinasti International Journal of Economics, Finance & Accounting1(1), 83-94.

Ningsih, S., & Sari, S. P. (2019). Analysis of the effect of liquidity ratios, solvability ratios and profitability ratios on firm value in go public companies in the automotive and component sectors. International Journal of Economics, Business and Accounting Research (IJEBAR)3(04).


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