Please read through all the information on the "Rounds" documents and answer thoroughly the questions on "Capsim" document. Look through all the rounds documents to give thorough and precise answers. Remember to talk about Porter's Strategies and from the information on the rounds documents determine which I am using and talk about that in the paper.
Summary: After doing Capsim simulation my company is in debt by 94% at the end of Round 8 because of my lack of knowledge about how to do Capsim. Make sure you include this information in your paper.
Each question should be 1-2pgs in length.
I will give a good tip if paper is thorough and has all the components talked about.
Thank you very much.
III. IV. Cun'ent Situation. Here, discuss the current situation of your company by performing and analyzing a full SWOT analysis. a] Strengths: Identify the strengths of the organization. b} Wealmeses: identify the weaknesses ofthe organization. cl Opportunities: Identify potential opportunities the organization should explore in order to expand. d} Threats: Identify external factors that could negatively affect the organization. We of the company. Consider the resorts of your SWOT analysis, and detail an approach you plan to take regarding your top priority at the company. Be sure to include any innovative or sustainable approaches in your plan. Ethical, Legal, and Social Challerges. Discuss any ethical, legal, or social challenges the company may have faced or could face in the future. and suggest strategies for how the company could overcome these challenges. Global Coriaiderations. In this section, discuss what necessary factors would need to be considered if the company were to expand into the giobal market. Considerthe opportunities and threais outlined in the SWOT analysis previously In order to analyzethe greatest advantages and disadvantages to expanding this company into the global market. Annual Report Annual Report Andrews F88517_012 Balance Sheet DEFINITIONS: Common Size: The common size column simply represents each item as a percentage of total ASSETS assets for that year. Cash: Your endofyear cash position. Accounts Receivable: Reflects the lag between delivery and payment of your products. Inventories: The Cash current value of your inventory across all products. A zero indicates your company stocked out. Unmet demand Account Receivable Inventory would, of course, fall to your competitors. Plant & Equipment: The current value of your plant. Accum Total Current Assets Deprec: The total accumulated depreciation from your plant. Accts Payable: What the company currently owes suppliers for materials and services. Current Debt: The Plant & Equipment Accumulated Depreciation debt the company is obligated to pay during the next year of operations. It includes emergency loans used to keep Total Fixed Assets your company solvent should you run out of cash during Total Assets the year. Long Term Debt: The companys long term debt LIABILITIES & OWNERS is in the form of bonds, and this represents the total value of your bonds. Common Stock: The amount of capital EQUITY invested by shareholders in the company. Retained Earnings: The profits that the company chose to keep Accounts Payable instead of paying to shareholders as dividends. CurrentDebt Long Term Debt Total Liabilities Common Stock Retained Earnings Total Equity Total Liab. & O. Equity $5,662 2018 Common Size 15.3% 13.0% 0.0% 28.3% $5,602 $3,353 $2,352 $11,307 $14,320 $19,982 101.0% 29.4% 71.7% 100.0% $14,400 ($4,800) $9,600 $20,907 $6,785 7.9% 0.0% 26.0% 34.0% $2,853 $0 $5,200 $8,053 $13,197 $19,982 11.6% 54.4% 66.0% 100.0% $2,323 $10,531 $12,854 $20,907 $3,060 $2,602 $0 $20,200 ($5,880) $1,585 $0 $5,200 $2,323 $10,874 Cash Flow Statement The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and cash withdrawals as negative numbers. The Cash Flow Statement is an excellent tool for diagnosing emergency loans. When negative cash flows exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip your inflows, exhaust your starting cash and force you to beg for money to keep your company afloat. Annual Report Round: 1 Dec. 31, 2018 Cash Flows from Operating Activities Net Income(Loss) Depreciation Extraordinary gains/losses/writeoffs Accounts Payable Inventory Accounts Receivable Net cash from operation Cash Flows from Investing Activities Plant Improvements Cash Flows from Financing Activities Dividends paid Sales of common stock Purchase of common stock Cash from long term debt Retirement of long term debt Change in current debt(net) Net cash from financing activities Net change in cash position Closing cash position 2017 2018 $343 $1,080 $0 ($1,268) $2,352 $752 $3,258 2017 $2,494 $960 $0 $853 ($2,352) $3,647 $5,602 ($5,800) $0 $0 $0 $0 $0 $0 $0 $0 ($2,542) $3,060 ($1,000) $0 $0 $0 $0 $0 ($1,000) $4,602 $5,602 Page 1 Andrews Annual Report Round: 1 Dec. 31, 2018 F88517_012 2018 Income Statement (Product Name) $0 2018 Total $31,656 Common Size 100.0% $0 $0 $0 $0 $0 $0 $0 $0 $7,994 $13,642 $0 $21,636 25.3% 43.1% 0.0% 68.3% Able A_Chip A_Dale A_BB8 A_Plut Sales $31,656 $0 $0 $0 $0 $0 $0 Variable Costs: Direct Labor Direct Material Inventory Carry Total Variable $7,994 $13,642 $0 $21,636 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Contribution Margin $10,020 $0 $0 $0 $0 $0 $0 $0 $10,020 31.7% Period Costs: Depreciation SG&A: R&D Promotions Sales Admin Total Period $1,080 $0 $1,300 $1,500 $960 $4,840 $0 $1,000 $0 $0 $0 $1,000 $0 $1,000 $0 $0 $0 $1,000 $0 $1,000 $0 $0 $0 $1,000 $0 $1,000 $0 $0 $0 $1,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,080 $4,000 $1,300 $1,500 $960 $8,840 3.4% 12.6% 4.1% 4.7% 3.0% 27.9% Net Margin $5,180 ($1,000) ($1,000) ($1,000) ($1,000) $0 $0 $0 $1,180 3.7% $0 $1,180 $0 $641 $188 $7 $343 0.0% 3.7% 0.0% 2.0% 0.6% 0.0% 1.1% Other Definitions: Sales: Unit Sales times list price. Direct Labor: Labor costs incurred to produce the product EBIT that was sold. Inventory Carry Cost: the cost unsold goods in inventory. Depreciation: Calculated on Short Term Interest straightline. 15year depreciation of plant value. R&D Costs: R&D department expenditures for each Long Term Interest product. Admin: Administration overhead is estimated at 1.5% of sales. Promotions: The promotion budget Taxes for each product. Sales: The sales force budget for each product. Other: Chargs not included in other categories such as Fees, Write offs, and TQM. The fees include money paid to investment bankers and Profit Sharing brokerage firms to issue new stocks or bonds plus consulting fees your instructor might assess. Writeoffs Net Profit include the loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. Short Term Interest: Interest expense based on last years current debt, including short term debt, long term notes that have become due, and emergency loans, Long Term Interest: Interest paid on outstanding bonds. Taxes: Income tax based upon a 35% tax rate. Profit Sharing: Profits shared with employees under the labor contract. Net Profit: EBIT minus interest, taxes, and profit sharing. Annual Report Page 2 Annual Report Annual Report Andrews F88517_012 Balance Sheet DEFINITIONS: Common Size: The common size column simply represents each item as a percentage of total ASSETS assets for that year. Cash: Your endofyear cash position. Accounts Receivable: Reflects the lag between delivery and payment of your products. Inventories: The Cash current value of your inventory across all products. A zero indicates your company stocked out. Unmet demand Account Receivable Inventory would, of course, fall to your competitors. Plant & Equipment: The current value of your plant. Accum Total Current Assets Deprec: The total accumulated depreciation from your plant. Accts Payable: What the company currently owes suppliers for materials and services. Current Debt: The Plant & Equipment Accumulated Depreciation debt the company is obligated to pay during the next year of operations. It includes emergency loans used to keep Total Fixed Assets your company solvent should you run out of cash during Total Assets the year. Long Term Debt: The companys long term debt LIABILITIES & OWNERS is in the form of bonds, and this represents the total value of your bonds. Common Stock: The amount of capital EQUITY invested by shareholders in the company. Retained Earnings: The profits that the company chose to keep Accounts Payable instead of paying to shareholders as dividends. CurrentDebt Long Term Debt Total Liabilities Common Stock Retained Earnings Total Equity Total Liab. & O. Equity $3,573 2019 Common Size 0.0% 16.3% 0.0% 16.3% $3,060 $2,602 $0 $5,662 $18,387 $21,959 118.0% 34.7% 83.7% 100.0% $20,200 ($5,880) $14,320 $19,982 $13,077 11.0% 28.8% 19.7% 59.6% $1,585 $0 $5,200 $6,785 $8,881 $21,959 10.6% 29.9% 40.4% 100.0% $2,323 $10,874 $13,197 $19,982 $0 $3,573 $0 $26,000 ($7,613) $2,415 $6,329 $4,333 $2,323 $6,558 Cash Flow Statement The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and cash withdrawals as negative numbers. The Cash Flow Statement is an excellent tool for diagnosing emergency loans. When negative cash flows exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip your inflows, exhaust your starting cash and force you to beg for money to keep your company afloat. Annual Report Round: 2 Dec. 31, 2019 Cash Flows from Operating Activities Net Income(Loss) Depreciation Extraordinary gains/losses/writeoffs Accounts Payable Inventory Accounts Receivable Net cash from operation Cash Flows from Investing Activities Plant Improvements Cash Flows from Financing Activities Dividends paid Sales of common stock Purchase of common stock Cash from long term debt Retirement of long term debt Change in current debt(net) Net cash from financing activities Net change in cash position Closing cash position 2018 2019 ($4,316) $1,733 $0 $830 $0 ($971) ($2,723) 2018 $343 $1,080 $0 ($1,268) $2,352 $752 $3,258 ($5,800) ($5,800) $0 $0 $0 $0 ($867) $6,329 $5,463 ($3,060) $0 $0 $0 $0 $0 $0 $0 $0 ($2,542) $3,060 Page 1 Andrews Annual Report Round: 2 Dec. 31, 2019 F88517_012 2019 Income Statement (Product Name) $0 2019 Total $43,468 Common Size 100.0% $0 $0 $0 $0 $0 $0 $0 $0 $12,710 $16,678 $0 $29,388 29.2% 38.4% 0.0% 67.6% Able A_Chip A_Dale A_BB8 A_Plut Sales $28,517 $3,565 $4,258 $3,565 $3,565 $0 $0 Variable Costs: Direct Labor Direct Material Inventory Carry Total Variable $7,441 $11,076 $0 $18,516 $1,362 $1,550 $0 $2,912 $1,361 $1,306 $0 $2,667 $1,273 $1,374 $0 $2,646 $1,273 $1,374 $0 $2,646 $0 $0 $0 $0 Contribution Margin $10,000 $653 $1,591 $918 $918 $0 $0 $0 $14,080 32.4% Period Costs: Depreciation SG&A: R&D Promotions Sales Admin Total Period $1,200 $1,000 $1,300 $1,500 $507 $5,507 $133 $362 $1,300 $1,500 $63 $3,359 $133 $361 $1,700 $1,800 $76 $4,070 $133 $200 $1,300 $1,500 $63 $3,197 $133 $200 $1,300 $1,500 $63 $3,197 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,733 $2,123 $6,900 $7,800 $773 $19,329 4.0% 4.9% 15.9% 17.9% 1.8% 44.5% Net Margin $4,493 ($2,706) ($2,479) ($2,279) ($2,279) $0 $0 $0 ($5,249) 12.1% $0 ($5,249) $844 $546 ($2,324) $0 ($4,316) 0.0% 12.1% 1.9% 1.3% 5.3% 0.0% 9.9% Other Definitions: Sales: Unit Sales times list price. Direct Labor: Labor costs incurred to produce the product EBIT that was sold. Inventory Carry Cost: the cost unsold goods in inventory. Depreciation: Calculated on Short Term Interest straightline. 15year depreciation of plant value. R&D Costs: R&D department expenditures for each Long Term Interest product. Admin: Administration overhead is estimated at 1.5% of sales. Promotions: The promotion budget Taxes for each product. Sales: The sales force budget for each product. Other: Chargs not included in other categories such as Fees, Write offs, and TQM. The fees include money paid to investment bankers and Profit Sharing brokerage firms to issue new stocks or bonds plus consulting fees your instructor might assess. Writeoffs Net Profit include the loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. Short Term Interest: Interest expense based on last years current debt, including short term debt, long term notes that have become due, and emergency loans, Long Term Interest: Interest paid on outstanding bonds. Taxes: Income tax based upon a 35% tax rate. Profit Sharing: Profits shared with employees under the labor contract. Net Profit: EBIT minus interest, taxes, and profit sharing. Annual Report Page 2 Annual Report Annual Report Andrews F88517_012 Balance Sheet DEFINITIONS: Common Size: The common size column simply represents each item as a percentage of total ASSETS assets for that year. Cash: Your endofyear cash position. Accounts Receivable: Reflects the lag between delivery and payment of your products. Inventories: The Cash current value of your inventory across all products. A zero indicates your company stocked out. Unmet demand Account Receivable Inventory would, of course, fall to your competitors. Plant & Equipment: The current value of your plant. Accum Total Current Assets Deprec: The total accumulated depreciation from your plant. Accts Payable: What the company currently owes suppliers for materials and services. Current Debt: The Plant & Equipment Accumulated Depreciation debt the company is obligated to pay during the next year of operations. It includes emergency loans used to keep Total Fixed Assets your company solvent should you run out of cash during Total Assets the year. Long Term Debt: The companys long term debt LIABILITIES & OWNERS is in the form of bonds, and this represents the total value of your bonds. Common Stock: The amount of capital EQUITY invested by shareholders in the company. Retained Earnings: The profits that the company chose to keep Accounts Payable instead of paying to shareholders as dividends. CurrentDebt Long Term Debt Total Liabilities Common Stock Retained Earnings Total Equity Total Liab. & O. Equity $3,516 2020 Common Size 0.0% 17.4% 0.0% 17.4% $0 $3,573 $0 $3,573 $16,653 $20,169 129.0% 46.3% 82.6% 100.0% $26,000 ($7,613) $18,387 $21,959 $16,146 11.2% 47.3% 21.5% 80.1% $2,415 $6,329 $4,333 $13,077 $4,022 $20,169 11.5% 8.4% 19.9% 100.0% $2,323 $6,558 $8,881 $21,959 $0 $3,516 $0 $26,000 ($9,347) $2,267 $9,546 $4,333 $2,323 $1,699 Cash Flow Statement The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and cash withdrawals as negative numbers. The Cash Flow Statement is an excellent tool for diagnosing emergency loans. When negative cash flows exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip your inflows, exhaust your starting cash and force you to beg for money to keep your company afloat. Annual Report Round: 3 Dec. 31, 2020 Cash Flows from Operating Activities Net Income(Loss) Depreciation Extraordinary gains/losses/writeoffs Accounts Payable Inventory Accounts Receivable Net cash from operation Cash Flows from Investing Activities Plant Improvements Cash Flows from Financing Activities Dividends paid Sales of common stock Purchase of common stock Cash from long term debt Retirement of long term debt Change in current debt(net) Net cash from financing activities Net change in cash position Closing cash position 2019 2020 ($4,859) $1,733 $0 ($148) $0 $57 ($3,217) 2019 ($4,316) $1,733 $0 $830 $0 ($971) ($2,723) $0 ($5,800) $0 $0 $0 $0 $0 $3,217 $3,217 $0 $0 $0 $0 $0 $0 ($867) $6,329 $5,463 ($3,060) $0 Page 1 Andrews Annual Report Round: 3 Dec. 31, 2020 F88517_012 2020 Income Statement (Product Name) $0 2020 Total $42,775 Common Size 100.0% $0 $0 $0 $0 $0 $0 $0 $0 $12,663 $14,921 $0 $27,584 29.6% 34.9% 0.0% 64.5% Able A_Chip A_Dale A_BB8 A_Plut Sales $28,517 $3,565 $3,565 $3,565 $3,565 $0 $0 Variable Costs: Direct Labor Direct Material Inventory Carry Total Variable $7,793 $9,792 $0 $17,584 $1,218 $1,440 $0 $2,658 $1,218 $1,176 $0 $2,394 $1,218 $1,257 $0 $2,474 $1,218 $1,257 $0 $2,474 $0 $0 $0 $0 Contribution Margin $10,932 $907 $1,171 $1,090 $1,090 $0 $0 $0 $15,191 35.5% Period Costs: Depreciation SG&A: R&D Promotions Sales Admin Total Period $1,200 $689 $1,300 $1,500 $444 $5,134 $133 $1,000 $1,300 $1,500 $56 $3,989 $133 $469 $1,300 $1,500 $56 $3,458 $133 $1,000 $1,300 $1,500 $56 $3,989 $133 $1,000 $1,300 $1,500 $56 $3,989 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,733 $4,159 $6,500 $7,500 $667 $20,559 4.1% 9.7% 15.2% 17.5% 1.6% 48.1% Net Margin $5,799 ($3,082) ($2,287) ($2,899) ($2,899) $0 $0 $0 ($5,368) 12.5% $0 ($5,368) $1,561 $546 ($2,616) $0 ($4,859) 0.0% 12.5% 3.6% 1.3% 6.1% 0.0% 11.4% Other Definitions: Sales: Unit Sales times list price. Direct Labor: Labor costs incurred to produce the product EBIT that was sold. Inventory Carry Cost: the cost unsold goods in inventory. Depreciation: Calculated on Short Term Interest straightline. 15year depreciation of plant value. R&D Costs: R&D department expenditures for each Long Term Interest product. Admin: Administration overhead is estimated at 1.5% of sales. Promotions: The promotion budget Taxes for each product. Sales: The sales force budget for each product. Other: Chargs not included in other categories such as Fees, Write offs, and TQM. The fees include money paid to investment bankers and Profit Sharing brokerage firms to issue new stocks or bonds plus consulting fees your instructor might assess. Writeoffs Net Profit include the loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. Short Term Interest: Interest expense based on last years current debt, including short term debt, long term notes that have become due, and emergency loans, Long Term Interest: Interest paid on outstanding bonds. Taxes: Income tax based upon a 35% tax rate. Profit Sharing: Profits shared with employees under the labor contract. Net Profit: EBIT minus interest, taxes, and profit sharing. Annual Report Page 2 Annual Report Annual Report Andrews F88517_012 Balance Sheet DEFINITIONS: Common Size: The common size column simply represents each item as a percentage of total ASSETS assets for that year. Cash: Your endofyear cash position. Accounts Receivable: Reflects the lag between delivery and payment of your products. Inventories: The Cash current value of your inventory across all products. A zero indicates your company stocked out. Unmet demand Account Receivable Inventory would, of course, fall to your competitors. Plant & Equipment: The current value of your plant. Accum Total Current Assets Deprec: The total accumulated depreciation from your plant. Accts Payable: What the company currently owes suppliers for materials and services. Current Debt: The Plant & Equipment Accumulated Depreciation debt the company is obligated to pay during the next year of operations. It includes emergency loans used to keep Total Fixed Assets your company solvent should you run out of cash during Total Assets the year. Long Term Debt: The companys long term debt LIABILITIES & OWNERS is in the form of bonds, and this represents the total value of your bonds. Common Stock: The amount of capital EQUITY invested by shareholders in the company. Retained Earnings: The profits that the company chose to keep Accounts Payable instead of paying to shareholders as dividends. CurrentDebt Long Term Debt Total Liabilities Common Stock Retained Earnings Total Equity Total Liab. & O. Equity $3,516 2021 Common Size 0.0% 19.1% 0.0% 19.1% $0 $3,516 $0 $3,516 $14,920 $18,436 141.0% 60.1% 80.9% 100.0% $26,000 ($9,347) $16,653 $20,169 $18,097 11.6% 72.5% 14.1% 98.2% $2,267 $9,546 $4,333 $16,146 $339 $18,436 12.6% 10.8% 1.8% 100.0% $2,323 $1,699 $4,022 $20,169 $0 $3,516 $0 $26,000 ($11,080) $2,135 $13,362 $2,600 $2,323 ($1,984) Cash Flow Statement The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and cash withdrawals as negative numbers. The Cash Flow Statement is an excellent tool for diagnosing emergency loans. When negative cash flows exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip your inflows, exhaust your starting cash and force you to beg for money to keep your company afloat. Annual Report Round: 4 Dec. 31, 2021 Cash Flows from Operating Activities Net Income(Loss) Depreciation Extraordinary gains/losses/writeoffs Accounts Payable Inventory Accounts Receivable Net cash from operation Cash Flows from Investing Activities Plant Improvements Cash Flows from Financing Activities Dividends paid Sales of common stock Purchase of common stock Cash from long term debt Retirement of long term debt Change in current debt(net) Net cash from financing activities Net change in cash position Closing cash position 2020 2021 ($3,683) $1,733 $0 ($132) $0 $0 ($2,082) 2020 ($4,859) $1,733 $0 ($148) $0 $57 ($3,217) $0 $0 $0 $0 $0 $0 ($1,733) $3,815 $2,082 $0 $0 $0 $0 $0 $0 $0 $3,217 $3,217 $0 $0 Page 1 Andrews Annual Report Round: 4 Dec. 31, 2021 F88517_012 2021 Income Statement (Product Name) $0 2021 Total $42,775 Common Size 100.0% $0 $0 $0 $0 $0 $0 $0 $0 $13,266 $12,707 $0 $25,973 31.0% 29.7% 0.0% 60.7% Able A_Chip A_Dale A_BB8 A_Plut Sales $28,517 $3,565 $3,565 $3,565 $3,565 $0 $0 Variable Costs: Direct Labor Direct Material Inventory Carry Total Variable $8,164 $8,151 $0 $16,315 $1,276 $1,318 $0 $2,593 $1,276 $1,019 $0 $2,294 $1,276 $1,110 $0 $2,386 $1,276 $1,110 $0 $2,386 $0 $0 $0 $0 Contribution Margin $12,202 $971 $1,270 $1,179 $1,179 $0 $0 $0 $16,802 39.3% Period Costs: Depreciation SG&A: R&D Promotions Sales Admin Total Period $1,200 $615 $1,300 $1,500 $444 $5,060 $133 $1,000 $1,300 $1,500 $56 $3,989 $133 $589 $1,300 $1,500 $56 $3,578 $133 $663 $1,300 $1,500 $56 $3,652 $133 $663 $1,300 $1,500 $56 $3,652 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,733 $3,531 $6,500 $7,500 $667 $19,931 4.1% 8.3% 15.2% 17.5% 1.6% 46.6% Net Margin $7,142 ($3,018) ($2,308) ($2,473) ($2,473) $0 $0 $0 ($3,129) 7.3% $0 ($3,129) $2,199 $338 ($1,983) $0 ($3,683) 0.0% 7.3% 5.1% 0.8% 4.6% 0.0% 8.6% Other Definitions: Sales: Unit Sales times list price. Direct Labor: Labor costs incurred to produce the product EBIT that was sold. Inventory Carry Cost: the cost unsold goods in inventory. Depreciation: Calculated on Short Term Interest straightline. 15year depreciation of plant value. R&D Costs: R&D department expenditures for each Long Term Interest product. Admin: Administration overhead is estimated at 1.5% of sales. Promotions: The promotion budget Taxes for each product. Sales: The sales force budget for each product. Other: Chargs not included in other categories such as Fees, Write offs, and TQM. The fees include money paid to investment bankers and Profit Sharing brokerage firms to issue new stocks or bonds plus consulting fees your instructor might assess. Writeoffs Net Profit include the loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. Short Term Interest: Interest expense based on last years current debt, including short term debt, long term notes that have become due, and emergency loans, Long Term Interest: Interest paid on outstanding bonds. Taxes: Income tax based upon a 35% tax rate. Profit Sharing: Profits shared with employees under the labor contract. Net Profit: EBIT minus interest, taxes, and profit sharing. Annual Report Page 2 Annual Report Annual Report Andrews F88517_012 Balance Sheet DEFINITIONS: Common Size: The common size column simply represents each item as a percentage of total ASSETS assets for that year. Cash: Your endofyear cash position. Accounts Receivable: Reflects the lag between delivery and payment of your products. Inventories: The Cash current value of your inventory across all products. A zero indicates your company stocked out. Unmet demand Account Receivable Inventory would, of course, fall to your competitors. Plant & Equipment: The current value of your plant. Accum Total Current Assets Deprec: The total accumulated depreciation from your plant. Accts Payable: What the company currently owes suppliers for materials and services. Current Debt: The Plant & Equipment Accumulated Depreciation debt the company is obligated to pay during the next year of operations. It includes emergency loans used to keep Total Fixed Assets your company solvent should you run out of cash during Total Assets the year. Long Term Debt: The companys long term debt LIABILITIES & OWNERS is in the form of bonds, and this represents the total value of your bonds. Common Stock: The amount of capital EQUITY invested by shareholders in the company. Retained Earnings: The profits that the company chose to keep Accounts Payable instead of paying to shareholders as dividends. CurrentDebt Long Term Debt Total Liabilities Common Stock Retained Earnings Total Equity Total Liab. & O. Equity $2,637 2022 Common Size 0.0% 13.6% 0.0% 13.6% $0 $3,516 $0 $3,516 $16,733 $19,370 154.0% 67.5% 86.4% 100.0% $26,000 ($11,080) $14,920 $18,436 $28,017 8.5% 123.0% 13.4% 145.0% $2,135 $13,362 $2,600 $18,097 ($8,647) $19,370 12.0% 56.6% 44.6% 100.0% $2,323 ($1,984) $339 $18,436 $0 $2,637 $0 $29,800 ($13,067) $1,639 $23,778 $2,600 $2,323 ($10,970) Cash Flow Statement The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and cash withdrawals as negative numbers. The Cash Flow Statement is an excellent tool for diagnosing emergency loans. When negative cash flows exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip your inflows, exhaust your starting cash and force you to beg for money to keep your company afloat. Annual Report Round: 5 Dec. 31, 2022 Cash Flows from Operating Activities Net Income(Loss) Depreciation Extraordinary gains/losses/writeoffs Accounts Payable Inventory Accounts Receivable Net cash from operation Cash Flows from Investing Activities Plant Improvements Cash Flows from Financing Activities Dividends paid Sales of common stock Purchase of common stock Cash from long term debt Retirement of long term debt Change in current debt(net) Net cash from financing activities Net change in cash position Closing cash position 2021 2022 ($8,986) $1,987 $0 ($496) $0 $879 ($6,616) 2021 ($3,683) $1,733 $0 ($132) $0 $0 ($2,082) ($3,800) $0 $0 $0 $0 $0 $0 $10,416 $10,416 $0 $0 $0 $0 $0 $0 ($1,733) $3,815 $2,082 $0 $0 Page 1 Andrews Annual Report Round: 5 Dec. 31, 2022 F88517_012 2022 Income Statement (Product Name) $0 2022 Total $32,081 Common Size 100.0% $0 $0 $0 $0 $0 $0 $0 $0 $11,616 $8,323 $0 $19,940 36.2% 25.9% 0.0% 62.2% $0 $0 $0 $12,142 37.8% $167 $1,000 $1,300 $1,500 $112 $4,078 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,987 $4,539 $6,500 $7,500 $1,006 $21,532 6.2% 14.1% 20.3% 23.4% 3.1% 67.1% ($2,957) $0 $0 $0 ($9,390) 29.3% $0 ($9,390) $4,096 $338 ($4,839) $0 ($8,986) 0.0% 29.3% 12.8% 1.1% 15.1% 0.0% 28.0% Able A_Chip A_Dale A_BB8 A_Plut Sales $17,823 $3,565 $3,565 $3,565 $3,565 $0 $0 Variable Costs: Direct Labor Direct Material Inventory Carry Total Variable $5,808 $4,363 $0 $10,172 $1,452 $1,104 $0 $2,556 $1,452 $873 $0 $2,325 $1,452 $992 $0 $2,444 $1,452 $992 $0 $2,444 $0 $0 $0 $0 Contribution Margin $7,651 $1,008 $1,240 $1,121 $1,121 Period Costs: Depreciation SG&A: R&D Promotions Sales Admin Total Period $1,320 $1,000 $1,300 $1,500 $559 $5,679 $167 $539 $1,300 $1,500 $112 $3,617 $167 $1,000 $1,300 $1,500 $112 $4,078 $167 $1,000 $1,300 $1,500 $112 $4,078 Net Margin $1,972 ($2,609) ($2,839) ($2,957) Other Definitions: Sales: Unit Sales times list price. Direct Labor: Labor costs incurred to produce the product EBIT that was sold. Inventory Carry Cost: the cost unsold goods in inventory. Depreciation: Calculated on Short Term Interest straightline. 15year depreciation of plant value. R&D Costs: R&D department expenditures for each Long Term Interest product. Admin: Administration overhead is estimated at 1.5% of sales. Promotions: The promotion budget Taxes for each product. Sales: The sales force budget for each product. Other: Chargs not included in other categories such as Fees, Write offs, and TQM. The fees include money paid to investment bankers and Profit Sharing brokerage firms to issue new stocks or bonds plus consulting fees your instructor might assess. Writeoffs Net Profit include the loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. Short Term Interest: Interest expense based on last years current debt, including short term debt, long term notes that have become due, and emergency loans, Long Term Interest: Interest paid on outstanding bonds. Taxes: Income tax based upon a 35% tax rate. Profit Sharing: Profits shared with employees under the labor contract. Net Profit: EBIT minus interest, taxes, and profit sharing. Annual Report Page 2 Annual Report Annual Report Andrews F88517_012 Balance Sheet DEFINITIONS: Common Size: The common size column simply represents each item as a percentage of total ASSETS assets for that year. Cash: Your endofyear cash position. Accounts Receivable: Reflects the lag between delivery and payment of your products. Inventories: The Cash current value of your inventory across all products. A zero indicates your company stocked out. Unmet demand Account Receivable Inventory would, of course, fall to your competitors. Plant & Equipment: The current value of your plant. Accum Total Current Assets Deprec: The total accumulated depreciation from your plant. Accts Payable: What the company currently owes suppliers for materials and services. Current Debt: The Plant & Equipment Accumulated Depreciation debt the company is obligated to pay during the next year of operations. It includes emergency loans used to keep Total Fixed Assets your company solvent should you run out of cash during Total Assets the year. Long Term Debt: The companys long term debt LIABILITIES & OWNERS is in the form of bonds, and this represents the total value of your bonds. Common Stock: The amount of capital EQUITY invested by shareholders in the company. Retained Earnings: The profits that the company chose to keep Accounts Payable instead of paying to shareholders as dividends. CurrentDebt Long Term Debt Total Liabilities Common Stock Retained Earnings Total Equity Total Liab. & O. Equity $8,400 2023 Common Size 0.0% 7.8% 28.5% 36.3% $0 $2,637 $0 $2,637 $14,747 $23,146 129.0% 65.0% 63.7% 100.0% $29,800 ($13,067) $16,733 $19,370 $45,305 7.0% 189.0% 0.0% 196.0% $1,639 $23,778 $2,600 $28,017 ($22,160) $23,146 10.0% 106.0% 95.7% 100.0% $2,323 ($10,970) ($8,647) $19,370 $0 $1,808 $6,592 $29,800 ($15,053) $1,629 $43,676 $0 $2,323 ($24,483) Cash Flow Statement The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and cash withdrawals as negative numbers. The Cash Flow Statement is an excellent tool for diagnosing emergency loans. When negative cash flows exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip your inflows, exhaust your starting cash and force you to beg for money to keep your company afloat. Annual Report Round: 6 Dec. 31, 2023 Cash Flows from Operating Activities Net Income(Loss) Depreciation Extraordinary gains/losses/writeoffs Accounts Payable Inventory Accounts Receivable Net cash from operation Cash Flows from Investing Activities Plant Improvements Cash Flows from Financing Activities Dividends paid Sales of common stock Purchase of common stock Cash from long term debt Retirement of long term debt Change in current debt(net) Net cash from financing activities Net change in cash position Closing cash position 2022 2023 ($13,513) $1,987 $0 ($10) ($6,592) $829 ($17,298) 2022 ($8,986) $1,987 $0 ($496) $0 $879 ($6,616) $0 ($3,800) $0 $0 $0 $0 ($2,600) $19,898 $17,298 $0 $0 $0 $0 $0 $0 $0 $10,416 $10,416 $0 $0 Page 1 Andrews Annual Report Round: 6 Dec. 31, 2023 F88517_012 2023 Income Statement (Product Name) $0 2023 Total $21,992 Common Size 100.0% $0 $0 $0 $0 $0 $0 $0 $0 $8,145 $5,083 $791 $14,019 37.0% 23.1% 3.6% 63.7% $0 $0 $0 $7,972 36.3% $167 $1,000 $1,300 $1,500 $22 $3,989 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,987 $5,000 $6,500 $7,500 $389 $21,375 9.0% 22.7% 29.6% 34.1% 1.8% 97.2% ($3,793) $0 $0 $0 ($13,403) 60.9% $0 ($13,403) $7,386 $0 ($7,276) $0 ($13,513) 0.0% 60.9% 33.6% 0.0% 33.1% 0.0% 61.4% Able A_Chip A_Dale A_BB8 A_Plut $14,666 $1,237 $3,565 $1,262 $1,262 $0 $0 Variable Costs: Direct Labor Direct Material Inventory Carry Total Variable $5,014 $3,285 $214 $8,514 $529 $329 $194 $1,051 $1,523 $798 $0 $2,322 $539 $335 $192 $1,066 $539 $335 $192 $1,066 $0 $0 $0 $0 Contribution Margin $6,152 $186 $1,243 $196 $196 Period Costs: Depreciation SG&A: R&D Promotions Sales Admin Total Period $1,320 $1,000 $1,300 $1,500 $259 $5,379 $167 $1,000 $1,300 $1,500 $22 $3,989 $167 $1,000 $1,300 $1,500 $63 $4,030 $167 $1,000 $1,300 $1,500 $22 $3,989 $773 ($3,803) ($2,787) ($3,793) Sales Net Margin Other Definitions: Sales: Unit Sales times list price. Direct Labor: Labor costs incurred to produce the product EBIT that was sold. Inventory Carry Cost: the cost unsold goods in inventory. Depreciation: Calculated on Short Term Interest straightline. 15year depreciation of plant value. R&D Costs: R&D department expenditures for each Long Term Interest product. Admin: Administration overhead is estimated at 1.5% of sales. Promotions: The promotion budget Taxes for each product. Sales: The sales force budget for each product. Other: Chargs not included in other categories such as Fees, Write offs, and TQM. The fees include money paid to investment bankers and Profit Sharing brokerage firms to issue new stocks or bonds plus consulting fees your instructor might assess. Writeoffs Net Profit include the loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. Short Term Interest: Interest expense based on last years current debt, including short term debt, long term notes that have become due, and emergency loans, Long Term Interest: Interest paid on outstanding bonds. Taxes: Income tax based upon a 35% tax rate. Profit Sharing: Profits shared with employees under the labor contract. Net Profit: EBIT minus interest, taxes, and profit sharing. Annual Report Page 2 Annual Report Annual Report Andrews F88517_012 Balance Sheet DEFINITIONS: Common Size: The common size column simply represents each item as a percentage of total ASSETS assets for that year. Cash: Your endofyear cash position. Accounts Receivable: Reflects the lag between delivery and payment of your products. Inventories: The Cash current value of your inventory across all products. A zero indicates your company stocked out. Unmet demand Account Receivable Inventory would, of course, fall to your competitors. Plant & Equipment: The current value of your plant. Accum Total Current Assets Deprec: The total accumulated depreciation from your plant. Accts Payable: What the company currently owes suppliers for materials and services. Current Debt: The Plant & Equipment Accumulated Depreciation debt the company is obligated to pay during the next year of operations. It includes emergency loans used to keep Total Fixed Assets your company solvent should you run out of cash during Total Assets the year. Long Term Debt: The companys long term debt LIABILITIES & OWNERS is in the form of bonds, and this represents the total value of your bonds. Common Stock: The amount of capital EQUITY invested by shareholders in the company. Retained Earnings: The profits that the company chose to keep Accounts Payable instead of paying to shareholders as dividends. CurrentDebt Long Term Debt Total Liabilities Common Stock Retained Earnings Total Equity Total Liab. & O. Equity $10,571 2024 Common Size 0.0% 10.4% 34.9% 45.3% $0 $1,808 $6,592 $8,400 $12,760 $23,331 128.0% 73.0% 54.7% 100.0% $29,800 ($15,053) $14,747 $23,146 $56,395 7.4% 234.0% 0.0% 242.0% $1,629 $43,676 $0 $45,305 ($33,063) $23,331 10.0% 152.0% 142.0% 100.0% $2,323 ($24,483) ($22,160) $23,146 $0 $2,419 $8,152 $29,800 ($17,040) $1,726 $54,669 $0 $2,323 ($35,386) Cash Flow Statement The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and cash withdrawals as negative numbers. The Cash Flow Statement is an excellent tool for diagnosing emergency loans. When negative cash flows exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip your inflows, exhaust your starting cash and force you to beg for money to keep your company afloat. Annual Report Round: 7 Dec. 31, 2024 Cash Flows from Operating Activities Net Income(Loss) Depreciation Extraordinary gains/losses/writeoffs Accounts Payable Inventory Accounts Receivable Net cash from operation Cash Flows from Investing Activities Plant Improvements Cash Flows from Financing Activities Dividends paid Sales of common stock Purchase of common stock Cash from long term debt Retirement of long term debt Change in current debt(net) Net cash from financing activities Net change in cash position Closing cash position 2023 2024 ($10,904) $1,987 $0 $97 ($1,561) ($611) ($10,992) 2023 ($13,513) $1,987 $0 ($10) ($6,592) $829 ($17,298) $0 $0 $0 $0 $0 $0 $0 $10,992 $10,992 $0 $0 $0 $0 $0 $0 ($2,600) $19,898 $17,298 $0 $0 Page 1 Andrews Annual Report Round: 7 Dec. 31, 2024 F88517_012 2024 Income Statement (Product Name) $0 2024 Total $29,430 Common Size 100.0% $0 $0 $0 $0 $0 $0 $0 $0 $11,058 $8,378 $978 $20,415 37.6% 28.5% 3.3% 69.4% $0 $0 $0 $9,015 30.6% $167 $713 $1,000 $1,000 $113 $2,993 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,987 $3,620 $5,000 $5,200 $566 $16,372 6.8% 12.3% 17.0% 17.7% 1.9% 55.6% ($1,336) $0 $0 $0 ($7,357) 25.0% $0 ($7,357) $9,418 $0 ($5,871) $0 ($10,904) 0.0% 25.0% 32.0% 0.0% 19.9% 0.0% 37.1% Able A_Chip A_Dale A_BB8 A_Plut $14,132 $0 $3,565 $5,867 $5,867 $0 $0 Variable Costs: Direct Labor Direct Material Inventory Carry Total Variable $4,684 $3,851 $496 $9,032 $0 $0 $482 $482 $1,469 $1,057 $0 $2,525 $2,453 $1,713 $0 $4,166 $2,453 $1,758 $0 $4,210 $0 $0 $0 $0 Contribution Margin $5,100 ($482) $1,039 $1,701 $1,657 Period Costs: Depreciation SG&A: R&D Promotions Sales Admin Total Period $1,320 $715 $1,000 $1,100 $272 $4,407 $167 $1,000 $1,000 $1,000 $0 $3,167 $167 $574 $1,000 $1,100 $69 $2,910 $167 $617 $1,000 $1,000 $113 $2,896 $693 ($3,649) ($1,870) ($1,195) Sales Net Margin Other Definitions: Sales: Unit Sales times list price. Direct Labor: Labor costs incurred to produce the product EBIT that was sold. Inventory Carry Cost: the cost unsold goods in inventory. Depreciation: Calculated on Short Term Interest straightline. 15year depreciation of plant value. R&D Costs: R&D department expenditures for each Long Term Interest product. Admin: Administration overhead is estimated at 1.5% of sales. Promotions: The promotion budget Taxes for each product. Sales: The sales force budget for each product. Other: Chargs not included in other categories such as Fees, Write offs, and TQM. The fees include money paid to investment bankers and Profit Sharing brokerage firms to issue new stocks or bonds plus consulting fees your instructor might assess. Writeoffs Net Profit include the loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. Short Term Interest: Interest expense based on last years current debt, including short term debt, long term notes that have become due, and emergency loans, Long Term Interest: Interest paid on outstanding bonds. Taxes: Income tax based upon a 35% tax rate. Profit Sharing: Profits shared with employees under the labor contract. Net Profit: EBIT minus interest, taxes, and profit sharing. Annual Report Page 2 Annual Report Annual Report Andrews F88517_012 Balance Sheet DEFINITIONS: Common Size: The common size column simply represents each item as a percentage of total assets for that year. Cash: Your end-of-year cash position. Accounts Receivable: Reflects the lag between delivery and payment of your products. Inventories: The current value of your inventory across all products. A zero indicates your company stocked out. Unmet demand would, of course, fall to your competitors. Plant & Equipment: The current value of your plant. Accum Deprec: The total accumulated depreciation from your plant. Accts Payable: What the company currently owes suppliers for materials and services. Current Debt: The debt the company is obligated to pay during the next year of operations. It includes emergency loans used to keep your company solvent should you run out of cash during the year. Long Term Debt: The companys long term debt is in the form of bonds, and this represents the total value of your bonds. Common Stock: The amount of capital invested by shareholders in the company. Retained Earnings: The profits that the company chose to keep instead of paying to shareholders as dividends. ASSETS Cash Account Receivable Inventory Total Current Assets $3,684 2025 Common Size 0.0% 25.5% 0.0% 25.5% $0 $2,419 $8,152 $10,571 $10,773 $14,457 206.0% -132.0% 74.5% 100.0% $29,800 ($17,040) $12,760 $23,331 $53,945 13.9% 359.0% 0.0% 373.0% $1,726 $54,669 $0 $56,395 ($39,488) $14,457 16.1% -289.0% -273.0% 100.0% $2,323 ($35,386) ($33,063) $23,331 $0 $3,684 $0 Plant & Equipment Accumulated Depreciation Total Fixed Assets Total Assets LIABILITIES & OWNERS EQUITY Accounts Payable CurrentDebt Long Term Debt Total Liabilities $29,800 ($19,027) $2,007 $51,938 $0 Common Stock Retained Earnings Total Equity Total Liab. & O. Equity $2,323 ($41,811) Cash Flow Statement The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and cash withdrawals as negative numbers. The Cash Flow Statement is an excellent tool for diagnosing emergency loans. When negative cash flows exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip your inflows, exhaust your starting cash and force you to beg for money to keep your company afloat. Annual Report Round: 8 Dec. 31, 2025 Cash Flows from Operating Activities Net Income(Loss) Depreciation Extraordinary gains/losses/writeoffs Accounts Payable Inventory Accounts Receivable Net cash from operation Cash Flows from Investing Activities Plant Improvements Cash Flows from Financing Activities Dividends paid Sales of common stock Purchase of common stock Cash from long term debt Retirement of long term debt Change in current debt(net) Net cash from financing activities Net change in cash position Closing cash position 2024 2025 ($6,425) $1,987 $0 $281 $8,152 ($1,265) $2,731 2024 ($10,904) $1,987 $0 $97 ($1,561) ($611) ($10,992) $0 $0 $0 $0 $0 $0 $0 ($2,731) ($2,731) $0 $0 $0 $0 $0 $0 $0 $10,992 $10,992 $0 $0 Page 1 Annual Report Andrews Round: 8 Dec. 31, 2025 F88517_012 2025 Income Statement (Product Name) $0 2025 Total $44,822 Common Size 100.0% $0 $0 $0 $0 $0 $0 $0 $0 $17,047 $15,526 $0 $32,573 38.0% 34.6% 0.0% 72.7% $0 $0 $0 $12,249 27.3% $167 $0 $1,000 $1,000 $59 $2,225 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,987 $260 $5,000 $5,200 $739 $13,185 4.4% 0.6% 11.2% 11.6% 1.6% 29.4% ($1,696) $0 $0 $0 ($937) -2.1% $0 ($937) $8,948 $0 ($3,460) $0 ($6,425) 0.0% -2.1% 20.0% 0.0% -7.7% 0.0% -14.3% Able A_Chip A_Dale A_BB-8 A_Plut Sales $24,671 $9,457 $3,565 $3,565 $3,565 $0 $0 Variable Costs: Direct Labor Direct Material Inventory Carry Total Variable $8,427 $8,913 $0 $17,339 $4,003 $2,578 $0 $6,581 $1,539 $1,271 $0 $2,810 $1,539 $1,268 $0 $2,807 $1,539 $1,496 $0 $3,035 $0 $0 $0 $0 Contribution Margin $7,332 $2,876 $754 $758 $529 Period Costs: Depreciation SG&A: R&D Promotions Sales Admin Total Period $1,320 $0 $1,000 $1,100 $407 $3,827 $167 $260 $1,000 $1,000 $156 $2,583 $167 $0 $1,000 $1,100 $59 $2,325 $167 $0 $1,000 $1,000 $59 $2,225 Net Margin $3,505 $293 ($1,571) ($1,468) Definitions: Sales: Unit Sales times list price. Direct Labor: Labor costs incurred to produce the product that was sold. Inventory Carry Cost: the cost unsold goods in inventory. Depreciation: Calculated on straight-line. 15-year depreciation of plant value. R&D Costs: R&D department expenditures for each product. Admin: Administration overhead is estimated at 1.5% of sales. Promotions: The promotion budget for each product. Sales: The sales force budget for each product. Other: Chargs not included in other categories such as Fees, Write offs, and TQM. The fees include money paid to investment bankers and brokerage firms to issue new stocks or bonds plus consulting fees your instructor might assess. Write-offs include the loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory. EBIT: Earnings Before Interest and Taxes. Short Term Interest: Interest expense based on last years current debt, including short term debt, long term notes that have become due, and emergency loans, Long Term Interest: Interest paid on outstanding bonds. Taxes: Income tax based upon a 35% tax rate. Profit Sharing: Profits shared with employees under the labor contract. Net Profit: EBIT minus interest, taxes, and profit sharing. Annual Report Other EBIT Short Term Interest Long Term Interest Taxes Profit Sharing Net Profit Page 2
