Industry Reports Overview

8/2/2019 Industry Reports Overview

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Industry Reports OverviewMikesBikes-Intro - Single-Player - Real Cool Cycles--------------------------------------------------------------------------------------------TO:

President

FROM: Corporate Strategy Consultants (CSC)DATE: 31 December 2013SUBJECT: Industry Reports for 2013--------------------------------------------------------------------------------------------The following key industry results have been calculated for 2013:

Real Cool Cycles MountainTop CyclesWholesale Sales Revenue $7,280,000 $7,150,000Gross Margin $3,582,853 $3,452,853Gross Margin % (of sales) 49% 48%Profit Before Tax $1,794,087 $1,657,686Profit Before Tax % (of sales) 25% 23%Profit After Tax $1,202,038 $1,110,650Earnings per Share $1.202 $1.111Shareholder Value (SHV) $12.73 $11.72Cumulative Change in SHV 38% 27%These results are presented in more detail in the following reports:1. Industry Benchmark Report 2013A summary of all firms' key results for 2013 so that you can benchmark yourself against your competitors.2. Market Summary (All Product Details) 2013A market research report giving a detailed side-by-side comparison of all ofproducts in the market including their segment, sales, price, product awareness,public relations influence, distribution coverage, delivery performance andphysical specifications rating.Use this report to judge the attractiveness of your product(s) and to decide which one(s) require more attention to improve their performance.3. Multifirm Shareholder Values 2013A line graph of all firms' shareholder values over time.

4. Multifirm Profit 2013A line graph of all firms' profit over time. 5. Multifirm Wholesale Sales Revenue 2013A line graph of all firms' wholesale sales revenue over time. 6. Multifirm Manufacturing Capacity 2013A line graph of all firms' manufacturing capacity over time. 7. Market Share (based on Retail $ sales)A pie chart of market share percentages for each firm based on retail sales for the entire market (i.e. all market segments).

8. Segment Sales in Units


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A line graph of total numbers of bicycles sold in each market segment. This allows you to see changes in total demand for each segment.


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Industry Benchmark ReportMikesBikes-Intro - Single-Player - Period 2013

Real Cool Cycles MountainTop CyclesFinancial ResultsShare Price $12.73 $11.72Dividend Per Share $0.00 $0.00Shareholder Value (SHV) $12.73 $11.72Cumulative Change in SHV 38% 27%Number of Shares 1,000,000 1,000,000Market SHV Capitalization $12,730,000 $11,720,000Retail Sales $11,200,000 $11,000,000Wholesale Sales $7,280,000 $7,150,000Gross Margin $3,582,853 $3,452,853Profit After Tax $1,202,038 $1,110,650Number of Shares 1,000,000 1,000,000Earnings per Share $1.202 $1.111Cash $10,618,590 $10,127,411Net Assets $10,620,865 $10,174,698D/E Ratio (book equity) 0.15 0.15Customer SatisfactionWholesale Sales $7,280,000 $7,150,000Brand Advertising $250,000 $250,000Total Product Advertising $750,000 $750,000Total Product PR $500,000 $500,000Average Retailer Margin 35% 35%Distribution Channel Support $135,225 $132,811Internal ResultsCapacity (SCU) 20,000 20,000Wastage 17% 17%Idle Time 33% 33%Quality Index 0.75 0.75No. of Products 1 1Innovation and LearningProduction Improvement $400,000 $400,000No. of Product Devpts 0 0Demand Forecast Accuracy

85%

87%


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Market Summary (All Product Details)MikesBikes-Intro - Single-Player - Period 2013This report shows various information for all products on the market.Most values are reported as a rating between 0.00 and 1.00, where 1.00 is the highest possible rating. Every segment has different preferences, and 1.00 is rarely the optimal value to aim for.

Firm Sales RetailPrice Awareness PR DistributionQuality

PrevDelivery* CurrentDelivery* ProductSpecs

Road(No sales)MountainRC_RockHopper Real CoolCycles 20,000 $560 0.45

0.38 0.66 0.75 0.89 0.89 0.60

_MT_RockHopper MountainTop Cycles 20,000 $550 0.45

0.38 0.65 0.75 0.89 0.88 0.60

Average(Weighted) 40,000 $555 0.45

0.38 0.65 0.75 0.89 - 0.60

Youth(No sales)Notes:1. 'Prev Delivery' refers to the Delivery rating for this product in the previous period. It is shown because the simulation used this figure when calculating product demand for the current period.Your customers' future Delivery expectations are based on your past Delivery performance,not your current Delivery performance.2. 'Current Delivery' refers to the Delivery rating for this product in the current period. This value will be used in the demand calculations for the next rollover.


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Multifirm Shareholder Value:

Real Cool Cycles2008 9.25






MountainTop Cycles 2008 9.25







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Multifirm Profit

Real Cool Cycles2008 932155






MountainTop Cycles 2008 932155







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Multifirm Sales Revenue














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Multifirm Sales Revenue

Real Cool Cycles11200000

MountainTop Cycles 11000000


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Segment Sales (in units)

Road 2008 0

Road 2009 0

Road 2010 0

Road 2011 0

Road 2012 0

Road 2013 0

Mountain 2008 39828

Mountain 2009 40158

Mountain 2010 40014

Mountain 2011 40000

Mountain 2012 40000

Mountain 2013 40000

Youth 2008 0

Youth 2009 0

Youth 2010 0

Youth 2011 0

Youth 2012 0

Youth 2013 0


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Firm Results:

Firm Reports OverviewMikesBikes-Intro - Single-Player - Real Cool Cycles--------------------------------------------------------------------------------------------TO: PresidentFROM: Vice President FinanceDATE: 31 December 2013SUBJECT: Financial Reports for 2013--------------------------------------------------------------------------------------------The following key results have been calculated for 2013:

Forecast 2013 Actual 2013 VarianceWholesale Sales Revenue $6,916,000 $7,280,000 5%Gross Margin $3,385,012 $3,582,853 6%Gross Margin % (of sales) 49% 49%Net Income (Loss) $1,034,305 $1,202,038 16%Net Income (Loss) (% of sales) 15% 17%Good News! Your net income was $167,734 higher than your forecast.These results are presented in more detail in the following reports: 1. Income Statement 2013 Versus 2012This report compares your actual results for 2013 versus the year before.This report ignores your forecasts and compares how much your actual resultschanged from last year. It is possible that you may not have achieved your sales forecasts but still improved your performance compared to last year. Note: This report is unavailable in the first year.2. Income Statement 2013 Versus Forecast 2013This report compares your actual results for 2013 against your forecast result. The purpose of this report is to review the accuracy of your forecasting so thatyou can evaluate and improve your forecasting technique.3. Income Statement 2013Your Income Statement for the previous financial year.4. Balance Sheet 2013Your Balance Sheet for the previous financial year.A Balance Sheet is the financial statement that reports your firm's financial condition. It's composed of three major accounts: assets, liabilities, and owners' equity. It's called a balanced sheet because it shows a balance between two figures: the company's assets on the one hand, and its liabilities plus owners' equity on the other. 5. Cashflow Statement 2013Your Cashflow Statement for the previous financial year.6. Decisions Made in 2013This report lists the decisions that you made last year.


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7. Cost of Goods Manufactured (COGM) and Gross Margin Report 2013Your Cost of Goods Manufactured (COGM) and Gross Margin Report for theprevious financial year.8. Factory Overhead Allocation Rates 2013Your Factory Overhead Allocation Rates for the previous financial year.9. Income Statement HistoryA table showing you the history of your firm's income statements since you took over management control of your firm.10. Balance Sheet HistoryA table showing you the history of your firm's balance sheets since you took over management control.11. Emergency Equity Injection HistoryA table recording any emergency equity injections or withdrawals that your courseinstructor has made to your firm.


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Income Statement with Previous Period ComparisonMikesBikes-Intro - Single-Player - Real Cool Cycles - Period 2013

Actual 2012 Actual 2013 IncreaseSalesForecast Sales Revenue $7,280,000 $7,280,000 0%Cost of Goods Sold $3,716,830 $3,697,147Gross Margin $3,563,170 $3,582,853 1%Selling & Distribution ExpensesSalaries $150,000 $150,000Brand Advertising $250,000 $250,000Product Advertising $750,000 $750,000Product PR $500,000 $500,000Distribution Channel Support $135,225 $135,225Finished Goods Warehousing

$0

$0

Product Development Projects $0 $0Inventory Disposal Loss $0 $0

$1,785,225 $1,785,225Production Management ExpensesUnallocated Factory Overheads $0 $0

$0 $0Administration ExpensesSalaries $120,000 $120,000Legal Fees $0 $0Miscellaneous Expense $0 $0

$120,000 $120,000Financial ExpensesInterest on Short Term Debt $0 $0Interest on Long Term Debt $80,000 $80,000

$80,000 $80,000TOTAL OTHER EXPENSES $1,985,225 $1,985,225 0%Other IncomeInterest on Cash in Bank $168,952 $196,460Miscellaneous Cash Windfall $0 $0TOTAL OTHER INCOME $168,952 $196,460Profit Before Taxation $1,746,897 $1,794,087Less: Income Tax $576,476 $592,049Plus: Tax Credit $0 $0Profit After Taxation $1,170,421 $1,202,038

NET INCOME $1,170,421 $1,202,038 3%


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COMMENTSGood News! Your net income was $31,618 higher than last year.


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Income Statement with Pro Forma ComparisonMikesBikes-Intro - Single-Player - Real Cool Cycles - Period 2013

Pro Forma 2013 Actual 2013 VarianceSalesForecast Sales Revenue $6,916,000 $7,280,000 5%Cost of Goods Sold $3,530,988 $3,697,147Gross Margin $3,385,012 $3,582,853 6%Selling & Distribution ExpensesSalaries* $150,000 $150,000Brand Advertising $250,000 $250,000Product Advertising $750,000 $750,000Product PR $500,000 $500,000Distribution Channel Support* $135,225 $135,225Finished Goods Warehousing $25,000 $0Product Development Projects $0 $0Inventory Disposal Loss $0 $0

$1,810,225 $1,785,225Production Management ExpensesUnallocated Factory Overheads* $0 $0

$0 $0Administration ExpensesSalaries* $120,000 $120,000Legal Fees* $0 $0Miscellaneous Expense $0 $0

$120,000 $120,000Financial ExpensesInterest on Short Term Debt* $0 $0Interest on Long Term Debt* $80,000 $80,000

$80,000 $80,000TOTAL OTHER EXPENSES $2,010,225 $1,985,225 (1%)Other IncomeInterest on Cash in Bank* $168,952 $196,460Miscellaneous Cash Windfall $1 $0TOTAL OTHER INCOME $168,952 $196,460Profit Before Taxation $1,543,738 $1,794,087Less: Income Tax $509,434 $592,049Plus: Tax Credit $0 $0Profit After Taxation $1,034,305 $1,202,038

NET INCOME $1,034,305 $1,202,038 16%


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COMMENTSGood News! Your net income was $167,734 higher than your forecast


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Income Statement (Profit & Loss)MikesBikes-Intro - Single-Player - Real Cool Cycles - Period 2013Sales Revenue $7,280,000Less: Cost of Goods Sold $3,697,147GROSS MARGIN $3,582,853Selling & Distribution ExpensesSalaries $150,000Brand Advertising $250,000Product Advertising $750,000Product PR $500,000Distribution Channel Support $135,225Finished Goods Warehousing $0Product Development Projects $0Sales Of Obsolete Stock $0Cost Of Obsolete Goods Sold $0

$1,785,225Production Management ExpensesUnallocated Factory Overhead $0

$0Administration ExpensesSalaries $120,000Legal Fees $0Miscellaneous Expense $0

$120,000Financial ExpensesInterest on Short Term Debt $0Interest on Long Term Debt $80,000

$80,000TOTAL OTHER EXPENSES $1,985,225Other IncomeInterest on Cash in Bank $196,460Miscellaneous Cash Windfall $0TOTAL OTHER INCOME $196,460Profit Before Taxation $1,794,087Less: Income Tax $592,049Plus: Tax Credit $0Profit After Taxation $1,202,038

NET INCOME $1,202,038


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HINTS AND TIPS1. In MikesBikes you should be aiming for a Gross Margin % of at least 40%, i.e. yourgross margin divided by your sales revenue should be at least 40%. If it is less than this, then you may find it very hard to make a profit unless you are gaining a large market share. To increase gross margin, consider increasing your prices, loweringyour retailer margins, or using product development to reduce your manufacturing costs.2. Keep control of your promotional spending, if your total Brand Advertising plusProduct Advertising plus Product PR budget adds up to more than 30% of your salesrevenue then you are spending an excessive amount on product promotion, and will find it difficult to make a profit.THEORY AND TERMINOLOGY1. The Income Statement is the financial statement that shows your firm's profit after costs, expenses, and taxes. It summarizes all of the resources that have come into the firm (revenue), all the resources that have left the firm, and the resulting net income or loss.2. Sales Revenue is the amount of money that you received for the bikes that your firmsold this year, i.e. wholesale price x quantity of bikes sold. 3. Cost of Goods sold, is the amount of money that it cost to make the bikes that your firm sold this year. For a more detailed report, read the COGM and Gross Margin Report. 4. Gross Margin (gross profit), is how much your firm earned this year by making bikes and selling them. It excludes all other costs of operating your firm, except the manufacturing costs of the bikes you sold, e.g. it doesn't include advertising. 5. Operating Expenses, is all of the other costs involved in operating your firm. This includes, selling and distribution expenses such as advertising and general overheads such as management salaries and interest payments.6. Net Income or Net Loss is the revenue minus Cost of Goods Sold, Operating Expensesand tax. Taking this number and dividing it by the number of shares that yourfirm has issued will give you your firm's earnings per share.


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Balance SheetMikesBikes-Intro - Single-Player - Real Cool Cycles - Period 2013

ASSETSCurrent AssetsCash $10,618,590Raw Materials Inventory $0Finished Goods Inventory $0Total Current Assets $10,618,590Non Current AssetsPlant $4,000,000Less: Accumulated Depreciation $2,405,677Total Non Current Assets $1,594,323TOTAL ASSETS $12,212,913LIABILITIES ANDSTOCKHOLDERS' EQUITYCurrent LiabilitiesShort Term Debt (Overdraft) $0Company Tax To Pay $592,049Total Current Liabilities $592,049Non Current LiabilitiesLong Term Debt $1,000,000Total Non Current Liabilities $1,000,000TOTAL LIABILITIES $1,592,049EquityNumber of Shares Outstanding: 1,000,000Share Capital $1,000,000Retained Earnings $9,620,865TOTAL EQUITY $10,620,865LIABILITIES AND STOCKHOLDERS' EQUITY $12,212,913HINTS AND TIPS1. If your total equity value is negative, then that means that your firm is insolvent, which means that you owe more money to others than you have even if you sold allof your assets. If your firm is insolvent, then you will not be able to raiseany more Long Term Debt, and your share price will fall to $0.01. 2. If you have a lot of cash, and your retained earnings are positive, then you should consider returning some of that money to stockholders by paying them a dividend.


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THEORY AND TERMINOLOGYNOTE: Owners' Equity and Stockholders' Equity are used interchangeably in MikesBikes.1. A Balance Sheet is the financial statement that reports your firm's financial condition. It's composed of three major accounts: assets, liabilities, and owners' equity. It's called a balanced sheet because it shows a balance between two figures: the company's assets on the one hand, and its liabilities plus owners' equity on the other. 2. Assets are economic resources owned by your firm. Current assets are items thatcan be converted into cash (i.e. sold) within one year, e.g. your inventory and any cash you have in your bank account. Non-current Assets (or Fixed Assets) are items that would take longer to sell, and in MikesBikes this is your plant capacity. 3. Liabilites are what your firm owes to others. Current Liabilities are payments duein one year or less, e.g. in MikesBikes this is any short term debt and tax that you need to pay. Non-Current Liabilities (long-term liabilities) are payments notdue for a year or longer, e.g. in MikesBikes this is any outstanding Long Term Debt that yourfirm still has to repay.4. The value of the things your firm owns (assets) minus the amount of money you owe toto others is called owners' equity. In MikesBikes owners' equity is made up of two things, share capital, which is money that stockholders paid your firm to buy shares in it and retained earnings, which is profits that your firm has reinvested back into itself.


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Cashflow StatementMikesBikes-Intro - Single-Player - Real Cool Cycles - Period 2013Cashflows from Operating ActivitiesCash was provided from:Sales $7,280,000Sales Of Obsolete Stock $0Miscellaneous Cash Windfall $0Cash was disbursed to:Marketing Admin Salaries $150,000Brand Advertising $250,000Product Advertising $750,000Product PR $500,000Distribution $135,225Design & Development Projects $0Prodn Admin Salaries $60,000Prodn Direct Labour $635,556Raw material purchases $2,224,444Raw Materials Holding Cost $0Finished Goods Holding Cost $0Efficiency Improvement $250,000Quality Systems $150,000Other Factory Overheads $200,000Admin Salaries $120,000Legal Fees (when in trouble) $0Company tax paid $576,476Miscellaneous Expenses $0OPERATING CASHFLOWS $1,278,299Cashflows From Investing ActivitiesCash was provided from:

Sale Of Plant $0Cash was disbursed to:Purchase of Plant $0INVESTMENT CASHFLOWS $0Cashflows From Financing ActivitiesCash was provided from:Long Term Debt Raised $0Share Issue $0Emergency Equity Injection $0Interest on Cash in Bank $196,460Cash was disbursed to:Long Term Debt Repaid $0Share Repurchase $0Share Issue/Repurchase Cost $0Withdrawal of Emergency Equity $0Interest on Long Term Debt $80,000Interest on Short Term Debt $0Dividends Issued $0FINANCING CASHFLOWS $116,460Net Cash Change $1,394,758


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Beginning Cash Balance $9,223,832ENDING CASH BALANCE $10,618,590


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Decisions Made Last PeriodMikesBikes-Intro - Single-Player - Real Cool Cycles - Period 2013------------------------------------------------------------DEBT DECISIONS------------------------------------------------------------DebtLong Term Debt Raised $0Long Term Debt Repaid $0------------------------------------------------------------EQUITY DECISIONS------------------------------------------------------------EquityEquity Raised $0Equity Repurchased $0Dividend Per Share $0.00------------------------------------------------------------PRODUCT MARKETING DECISIONS------------------------------------------------------------Product RC_RockHopperState NormalDesign Project Name RCRockHopperRetail Price $560Advertising Expenditure $750,000PR Expenditure $500,000ForecastSales (Units) 19,000PlannedProduction (Units) 20,000------------------------------------------------------------PRODUCT MARKETING - MEDIA DECISIONS------------------------------------------------------------Product RC_RockHopper RC_RockHopper RC_RockHopperMedia TV Internet MagazinesProduct Advertising $300,000 $75,000 $375,000Product PR $200,000 $50,000 $250,000------------------------------------------------------------PRODUCT MARKETING - PRODUCT DEVELOPMENT DECISIONS------------------------------------------------------------Project Name Style Technical Specs Variable Prodn Cost Expenditure------------------------------------------------------------FIRM MARKETING DECISIONS------------------------------------------------------------Brand Advertising $250,000------------------------------------------------------------FIRM MARKETING - DISTRIBUTION DECISIONS


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------------------------------------------------------------Bike Shops Sports Stores Discount Stores

Extra Support $0 $0 $0Retail Margin 35% 35% 35%------------------------------------------------------------CAPACITY PLANNER DECISIONS------------------------------------------------------------Capacity Increase 0 SCUCapacity Decrease 0 SCUEfficiency Improvement $250,000Quality Improvement $150,000------------------------------------------------------------PRODUCTION PLANNING DECISIONS------------------------------------------------------------Product RC_RockHopperDesign Project Name RCRockHopperForecastSales (Units) 19,000PlannedProduction (Units) 20,000------------------------------------------------------------------------------------------------------------------------


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COGM and Gross Margin ReportMikesBikes-Intro - Single-Player - Real Cool Cycles - Period 2013Gross Margin ReportProduct RC_RockHopperSales Units 20,000Retail Price $560Average Wholesale Price $364Sales Revenue $7,280,000Opening Finished Goods Inventory $0Plus: Cost of Goods Manufactured $3,697,147

$3,697,147Less: Closing Finished Goods Inventory $0Cost of Goods Sold $3,697,147GROSS MARGIN $3,582,853Gross Margin % (of Sales) 49%

Cost of Goods Manufactured ReportProduct RC_RockHopperProd Devpt Project RCRockHopperProduction (units) 20,000Materials CostsDirect Raw Materials $2,224,444Materials Overhead Applied $0($0.00 per DMat$)Labor CostsDirect Labor Cost $635,556Labor Overhead Applied $460,000($9.05 per DLHr)Machine CostsStandard Machine Hours 40,000Machine Overhead Applied $377,147($9.43 per DMachHr)TOTAL COST OF GOODS MANUFACTURED $3,697,147Avg Manufacturing Cost Per Unit $184.86


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Factory Overhead Allocation RatesMikesBikes-Intro - Single-Player - Real Cool Cycles - Period 2013This report lists the factory overhead costs and calculates the overhead application rates. Note that the direct costs are based on the product standards (not actuals). Material OverheadsRaw Materials Warehousing Cost $0Total Material Overheads $0Total Direct Material Costs $2,224,444Material Overhead Application Rate $0.00 ($ per DMat$)Labor OverheadsProduction Scheduling & Administration $60,000Efficiency Improvement $250,000Quality Improvement $150,000Total Labor Overheads

$460,000

Total Direct Labor Hours 50,844Labor Overhead Application Rate $9.05 ($ per DLHr)Machine OverheadsDepreciation Expense $177,147Other Factory Overheads $200,000Total Machine Overheads $377,147Total Direct Machine Hours 40,000Machine Overhead Application Rate $9.43 ($ per DMachHr)


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Income Statement HistoryMikesBikes-Intro - Single-Player - Real Cool Cycles - Period 2013

2013 2012 2011 2010 2009 2008Sales Revenue $7,280,000 $7,280,000 $7,280,000 $7,285,096 $7,306,208 $7,119,255Less: Cost of GoodsSold $3,697,147 $3,716,830 $3,738,700 $3,765,653 $3,803,773 $3,803,574GROSS MARGIN $3,582,853 $3,563,170 $3,541,300 $3,519,443 $3,502,435 $3,315,681Selling & DistributionExpensesSalaries $150,000 $150,000 $150,000 $150,000 $150,000 $150,000Brand Advertising $250,000 $250,000 $250,000 $250,000 $250,000

$250,000

Product Advertising $750,000 $750,000 $750,000 $750,000 $750,000 $750,000Product PR $500,000 $500,000 $500,000 $500,000 $500,000 $500,000Distribution ChannelSupport $135,225 $135,225 $135,297 $135,454 $133,094 $133,392Finished GoodsWarehousing $0 $0 $0 $350 $2,500 $2,150Product DevelopmentProjects $0 $0 $0 $0 $0 $0Sales Of ObsoleteStock $0 $0 $0 $0 $0 $0Cost Of Obsolete

Goods Sold $0 $0 $0 $0 $0 $0$1,785,225 $1,785,225 $1,785,297 $1,785,804 $1,785,594 $1,785,542

ProductionManagementExpensesUnallocated FactoryOverhead $0 $0 $0 $0 $0 $0

$0 $0 $0 $0 $0 $0AdministrationExpensesSalaries $120,000 $120,000 $120,000 $120,000 $120,000 $120,000Legal Fees $0 $0 $0 $0 $0 $0Miscellaneous Expense $0 $0 $0 $0 $0 $0

$120,000 $120,000 $120,000 $120,000 $120,000 $120,000Financial ExpensesInterest on Short TermDebt $0 $0 $0 $0 $0 $0Interest on Long TermDebt $80,000 $80,000 $80,000 $80,000 $80,000 $80,000


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$80,000 $80,000 $80,000 $80,000 $80,000 $80,000TOTAL OTHEREXPENSES $1,985,225 $1,985,225 $1,985,297 $1,985,804 $1,985,594 $1,985,542

Other IncomeInterest on Cash inBank $196,460 $168,952 $141,665 $114,566 $86,912 $61,137Miscellaneous CashWindfall $0 $0 $0 $0 $0 $0TOTAL OTHERINCOME $196,460 $168,952 $141,665 $114,566 $86,912 $61,137

Profit Before Taxation $1,794,087 $1,746,897 $1,697,669 $1,648,205 $1,603,753 $1,391,276Less: Income Tax $592,049 $576,476 $560,231 $543,908 $529,239 $459,121Plus: Tax Credit $0 $0 $0 $0 $0 $0Profit After Taxation $1,202,038 $1,170,421 $1,137,438 $1,104,297 $1,074,515 $932,155

NET INCOME $1,202,038 $1,170,421 $1,137,438 $1,104,297 $1,074,515 $932,155HINTS AND TIPS1. In MikesBikes you should be aiming for a Gross Margin % of at least 40%, i.e. your gross margin divided by your sales revenue should be at least 40%. If it is less than this, then you may find it very hard to make a profit unless you are gaining a large market share. To increase gross margin, consider increasing your prices, loweringyour retailer margins, or using product development to reduce your manufacturing costs.2. Keep control of your promotional spending, if your total Brand Advertising plusProduct Advertising plus Product PR budget adds up to more than 30% of your sales revenue then you are spending an excessive amount on product promotion, and will find it difficult to make a profit.


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Balance Sheet HistoryMikesBikes-Intro - Single-Player - Real Cool Cycles - Period 2013

2013 2012 2011 2010 2009 2008ASSETSCurrent AssetsCash $10,618,590 $9,223,832 $7,840,336 $6,467,875 $5,103,256 $3,674,850Raw Materials Inventory $0 $0 $0 $0 $0 $0Finished Goods Inventory $0 $0 $0 $0 $2,653 $16,426Total Current Assets $10,618,590 $9,223,832 $7,840,336 $6,467,875 $5,105,909 $3,691,276Non Current AssetsPlant $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000Less: Accumulated Depreciation $2,405,677 $2,228,530 $2,031,700 $1,813,000 $1,570,000 $1,300,000Total Non Current Assets $1,594,323 $1,771,470 $1,968,300 $2,187,000 $2,430,000 $2,700,000TOTAL ASSETS $12,212,913 $10,995,302 $9,808,636 $8,654,875 $7,535,909 $6,391,276LIABILITIES ANDSTOCKHOLDERS'EQUITYCurrent LiabilitiesShort Term Debt (Overdraft) $0 $0 $0 $0 $0 $0Company Tax To Pay $592,049 $576,476 $560,231 $543,908 $529,239 $459,121Total Current Liabilities $592,049 $576,476 $560,231 $543,908 $529,239 $459,121Non Current LiabilitiesLong Term Debt

$1,000,0

00$1,000,0

00$1,000,

000$1,000,

000$1,000,

000$1,000,

000Total Non Current Liabilities $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000TOTAL LIABILITIES $1,592,049 $1,576,476 $1,560,231 $1,543,908 $1,529,239 $1,459,121EquityNumber of Shares Outstanding: 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000Share Capital $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000Retained Earnings $9,620,8 $8,418,8 $7,248, $6,110, $5,006, $3,932,


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65 26 405 967 670 155TOTAL EQUITY $10,620,865 $9,418,826 $8,248,405 $7,110,967 $6,006,670 $4,932,155LIABILITIES AND

STOCKHOLDERS' EQUITY$12,212,

913$10,995,

302$9,808,

636$8,654,

875$7,535,

909$6,391,

276HINTS AND TIPS1. If your total equity value is negative, then that means that your firm is insolvent, which means that you owe more money to others than you have even if you sold allof your assets. If your firm is insolvent, then you will not be able to issue any more Long Term Debt, and your share price will fall to $0.01. 2. If you have a lot of cash, and your retained earnings are positive, then you should consider returning some of that money to stockholders by paying them a dividend.

THEORY AND TERMINOLOGY1. A Balance Sheet is the financial statement that reports your firm's financial condition. It's composed of three major accounts: assets, liabilities, and owners' equity. It's called a balanced sheet because it shows a balance between two figures: the company's assets on the one hand, and its liabilities plus owners' equity on the other. 2. Assets are economic resources owned by your firm. Current assets are items thatcan be converted into cash (i.e. sold) within one year, e.g. your inventory and any cashyou have in your bank account. Non-current Assets (or Fixed Assets) are items that would take longer to sell, and in MikesBikes this is your plant capacity. 3. Liabilites are what your firm owes to others. Current Liabilities are payments duein one year or less, e.g. in MikesBikes this is any short term debt and tax that you need to pay. Non-Current Liabilities (long-term liabilities) are payments notdue for a year or longer, e.g. in MikesBikes this is any outstanding Long Term Debt that yourfirm still has to repay.4. The value of the things your firm owns (assets) minus the amount of money you owe toto others is called owners' equity. In MikesBikes owners' equity is made up of two things, share capital, which is money that stockholders paid your firm to buy shares in it and retained earnings, which is profits that your firm has reinvested back into itself.


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Emergency Equity Injection and Withdrawal HistoryMikesBikes-Intro - Single-Player - Real Cool Cycles - Period 2013This report gives the history of emergency equity injections and withdrawals. Period

Owner

Injection

Withdrawal

Profit

Balance Sheet Equity

2008 $0 $0 $932,155 $4,932,1552009 $0 $0 $1,074,515 $6,006,6702010 $0 $0 $1,104,297 $7,110,9672011 $0 $0 $1,137,438 $8,248,4052012 $0 $0 $1,170,421 $9,418,8262013 $0 $0 $1,202,038 $10,620,865


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Financial Management OverviewMikesBikes-Intro - Single-Player - Real Cool Cycles--------------------------------------------------------------------------------------------TO:

President

FROM: Vice President FinanceDATE: 31 December 2013SUBJECT: Cash Management Forecasts for 2014--------------------------------------------------------------------------------------------The following key results have been forecasted for 2014:

Pro Forma 2014CLOSING CASH BALANCE FROMPREVIOUS PERIOD (2013) $10,618,590FINANCIAL DECISIONS $0CASH AVAILABLE AFTER FINANCIAL DECISIONS $10,618,590OPERATIONAL DECISIONS ($1,900,000)CASH AVAILABLE AFTER OPERATIONAL DECISIONS $8,718,590AVAILABLE OVERDRAFT $3,183,337FUNDS REMAINING $11,901,928You have enough funds available to implement your current decisions. If you wish to consider increasing any of your budgets, then you have $11,901,928 available to you. However it is a good idea to save as much as possible for the future. These results are presented in more detail in the following reports: 1. Pro Forma Funds AvailableThis report gives a more detailed forecast of your available cash and what budgets you havecurrently allocated it to.2. Pro Forma Cashflow ReportA pro forma estimate of next year's ending cash balance. This report is included forusers with a good understanding of financial accounting.


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Product Report for RC_RockHopper - Sales, Margin, ProductionMikesBikes-Intro - Single-Player - Real Cool Cycles - Period 2013

Period 2013 2012 2011 2010 2009 2008State Normal Normal Normal Normal Normal NormalProd Devpt Project RCRockHopper RCRockHopper RCRockHopper RCRockHopper RCRockHopper RCRockHopperMARKETING & SALES

INFORMATIONRetail Price $560 $560 $560 $560 $560 $550Average Wholesale Price $364 $364 $364 $364 $364 $358Advertising Expenditure $750,000 $750,000 $750,000 $750,000 $750,000 $750,000Product Awareness 45% 45% 45% 46% 46% 47%Actual Sales Units 20,000 20,000 20,000 20,014 20,072 19,914Est. Lost Sales 2,458 1,816 1,177 878 0 0ACCOUNTING

INFORMATIONCost of GoodsManufactured $3,697,147 $3,716,830 $3,738,700 $3,763,000 $3,790,000 $3,820,000Sales $7,280,000 $7,280,000 $7,280,000 $7,285,096 $7,306,208 $7,119,255Cost of Goods Sold $3,697,147 $3,716,830 $3,738,700 $3,765,653 $3,803,773 $3,803,574Gross Margin $3,582,853 $3,563,170 $3,541,300 $3,519,443 $3,502,435 $3,315,681Gross Margin (%) 49% 49% 49% 48% 48% 47%PRODUCTION

INFORMATIONAvg Manufacturing CostPer Unit $184.86 $185.84 $186.94 $188.15 $189.50 $191.00SCU Required for Product 0.50 0.50 0.50 0.50 0.50 0.50Planned Production(Units) 20,000 20,000 20,000 20,000 20,000 20,000Opening Inventory (Units) 0 0 0 14 86 0Actual Production (Units) 20,000 20,000 20,000 20,000 20,000 20,000Units For Sale 20,000 20,000 20,000 20,014 20,086 20,000Less: Sales (Units) (20,000) (20,000) (20,000) (20,014) (20,072) (19,914)Closing Inventory (Units) 0 0 0 0 14 86Closing Inventory (Weeksof demand) 0.00 0.00 0.00 0.00 0.00 0.00Delivery PerformanceIndex 0.89 0.89 0.90 0.91 1.00 1.00


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Firm Marketing Reports OverviewMikesBikes-Intro - Single-Player - Real Cool Cycles--------------------------------------------------------------------------------------------TO:

President

FROM: Vice President MarketingDATE: 31 December 2013SUBJECT: Firm Marketing Reports for 2013--------------------------------------------------------------------------------------------The following key distribution results have been calculated for 2013: Retail Channel Bike Shops Sports Stores Discount StoresMax Stores 160 320 400Stores Stocking 56 202 147Retail Sales $1,605,655 $7,899,791 $1,694,554Wholesale Sales $1,043,676 $5,134,864 $1,101,460Wholesale Margin % 65% 65% 65%Channel % (of total sales) 14% 71% 15%These results are presented in more detail in the following reports: 1. Multifirm Product Distribution LevelsA line chart showing the historical distribution coverage of all firms. 2. Multifirm Brand AwarenessA line chart showing the historical corporate brand awareness of all firms.3. Multifirm Retailer Margin and Extra SupportA table comparing all firms' retailer margins and sales promotion support budgets.


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Multifirm Product Distribution

RC_RockHopper 2008 0.653






_MT_RockHopper 2008 0.653







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Multifirm Retailer Margins and Extra SupportMikesBikes-Intro - Single-Player - Period 2013Firm Channel Retailer Margin ExtraSupport Stores UsedReal Cool Cycles Bike Shops 35% $0 56Real Cool Cycles Sports Stores 35% $0 202Real Cool Cycles Discount Stores 35% $0 147MountainTop Cycles Bike Shops 35% $0 55MountainTop Cycles Sports Stores 35% $0 198MountainTop Cycles Discount Stores 35% $0 144


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Operations Reports OverviewMikesBikes-Intro - Single-Player - Real Cool Cycles--------------------------------------------------------------------------------------------TO:

President

FROM: Vice President OperationsDATE: 31 December 2013SUBJECT: Operations Reports for 2013--------------------------------------------------------------------------------------------The following key summary operations forecasts have been prepared for you:Product RC_RockHopperProduct State NormalCurrent Inventory (Units) 0Ordered (Units) 20,000Max Possible Sales (Units) 20,000Forecast Sales* (Units) 19,000Forecast Closing Inventory (Units) 1,000Note that the Forecast Sales defaults to either the max possible sales, or your actual sales forecast, whichever is smaller, i.e. if you have not ordered any and have no stock, then the max possible sales will be zero and so will your forecast sales.Last year's operations results are presented in more detail in the following reports: 1. Factory ReportA table detailing your capacity/quality decisions last year.2. Multifirm Product Quality RatingsA line chart comparing firms' quality ratings over time.3. Multifirm Product Delivery PerformanceA line chart comparing all products' delivery performance time.4. Product Inventory Line ChartA line chart showing your current inventory levels of each of your products before this year's production orders were placed.


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Factory ReportMikesBikes-Intro - Single-Player - Real Cool Cycles - Period 2013

Period 2013 2012 2011 2010 2009 2008CAPACITYCapacity sold (SCU) 0 0 0 0 0 0Capacity purchased(SCU) 0 0 0 0 0 0TOTAL CAPACITY (SCU) 20,000 20,000 20,000 20,000 20,000 20,000Capacity was allocatedto:Production (%) 50% 50% 50% 50% 50% 50%Wastage (%) 17% 17% 17% 17% 17% 17%Idle Time (%) 33% 33% 33% 33% 33% 33%

100% 100% 100% 100% 100% 100%Administration Staff 4 4 4 4 4 4Marketing & Sales Staff 5 5 5 5 5 5Production Admin Staff 2 2 2 2 2 2PRODUCTIONPROCESSEfficiency Improvement $250,000 $250,000 $250,000 $250,000 $250,000 $250,000Efficiency Index 0.75 0.75 0.75 0.75 0.75 0.75Max Production Efficiency 75% 75% 75% 75% 75% 75%Quality Improvement $150,000 $150,000 $150,000 $150,000 $150,000 $150,000Quality Index 0.75 0.75 0.75 0.75 0.75 0.75


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Multifirm Quality Rating














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Multifirm product Delivery:














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Product Inventory Unit Line Chart








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Forecast Results Reports OverviewMikesBikes-Intro - Single-Player - Real Cool Cycles-------------------------------------------------------------------------------------------- TO: PresidentFROM: Vice President FinanceDATE: 31 December 2013SUBJECT: Forecast Financial Reports for 2014-------------------------------------------------------------------------------------------- The following key results have been calculated for 2013:

Actual 2013 Forecast 2014 VarianceSales Revenue $7,280,000 $6,916,000 (5%)Gross Margin $3,582,853 $3,403,710 (5%)Net Income $1,202,038 $1,065,263 (11%)Net Income (% of sales) 17% 15%Unfortunately, your forecast net income is $136,776 less than your current net income. These results are presented in more detail in the following reports:1. Pro Forma Funds Available 2014A report detailing whether or not your have enough cash to implement your current strategy2. Pro Forma Income Statement 2014A comparison of your forecast income statement versus your current income statement.3. Pro Forma Gross Margin Report 2014A table showing the forecast gross margins for each of your product(s)4. Pro Forma Cost of Goods Manufactured Report 2014A pro forma estimate of next periods COGM Report.5. Pro Forma Cashflow Report 2014A pro forma estimate of next periods ending cash balance.6. Current Decisions for 2014A report summarizing the decisions you have enterd for next year.


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Product Report for RC_RockHopper - Sales, Margin, ProductionMikesBikes-Intro - Single-Player - Real Cool Cycles - Period 2013

Period 2013 2012 2011 2010 2009 2008State Normal Normal Normal Normal Normal NormalProd Devpt Project RCRockHopper RCRockHopper RCRockHopper RCRockHopper RCRockHopper RCRockHopperMARKETING & SALES

INFORMATIONRetail Price $560 $560 $560 $560 $560 $550Average Wholesale Price $364 $364 $364 $364 $364 $358Advertising Expenditure $750,000 $750,000 $750,000 $750,000 $750,000 $750,000Product Awareness 45% 45% 45% 46% 46% 47%Actual Sales Units 20,000 20,000 20,000 20,014 20,072 19,914Est. Lost Sales 2,458 1,816 1,177 878 0 0ACCOUNTING

INFORMATIONCost of GoodsManufactured $3,697,147 $3,716,830 $3,738,700 $3,763,000 $3,790,000 $3,820,000Sales $7,280,000 $7,280,000 $7,280,000 $7,285,096 $7,306,208 $7,119,255Cost of Goods Sold $3,697,147 $3,716,830 $3,738,700 $3,765,653 $3,803,773 $3,803,574Gross Margin $3,582,853 $3,563,170 $3,541,300 $3,519,443 $3,502,435 $3,315,681Gross Margin (%) 49% 49% 49% 48% 48% 47%PRODUCTION

INFORMATIONAvg Manufacturing CostPer Unit $184.86 $185.84 $186.94 $188.15 $189.50 $191.00SCU Required for Product 0.50 0.50 0.50 0.50 0.50 0.50Planned Production(Units) 20,000 20,000 20,000 20,000 20,000 20,000Opening Inventory (Units) 0 0 0 14 86 0Actual Production (Units) 20,000 20,000 20,000 20,000 20,000 20,000Units For Sale 20,000 20,000 20,000 20,014 20,086 20,000Less: Sales (Units) (20,000) (20,000) (20,000) (20,014) (20,072) (19,914)Closing Inventory (Units) 0 0 0 0 14 86Closing Inventory (Weeksof demand) 0.00 0.00 0.00 0.00 0.00 0.00Delivery PerformanceIndex 0.89 0.89 0.90 0.91 1.00 1.00

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