FOUNDATION BUSINESS SIMULATION Assessment & Analysis

Benchmarking Reports – website only: Round Analysis Analyst Report The Round Analysis & Analyst Report provide coaching Foundation® Provides Several Tools to Assist in Results Assessment & Analysis Industry & Team Reports – both website & foundation.xls: Foundation FastTrack Annual Reports

Benchmarking & Coaching Round Analysis Report The Round Analysis Report uses five simple benchmarks for: 1.Profit 2.Margins 3.Emergency Loan status 4.Inventory Management 5. Stock Price Students are quickly pointed towards potential problem areas.

Benchmarking & Coaching Analyst Report Comprehensive scoring for each team for every round of competition. The Analyst provides detailed coaching on each of ten categories: 1.Margins 2.Profits 3.Emergency Loans 4.Working Capital 5.Market Share 6.Forecasting 7.Customer Satisfaction 8.Productivity 9.Financial Structure 10.Wealth Creation

Foundation® FastTrack Page 1 and Page 2 report the “big picture” headline-grabbers -- Sales, Profits, Margins, Market Share, Return Measures, Stock Prices, Earnings Per Share, etc. What constitutes good or bad results? Benchmarks are provided on the website in the “Analyst Report,” and the “Round Analysis” report. Compare your results against competitors in the FastTrack. Remember that overall customer demand is growing at somewhere around 14% a year, which means Sales -- and Profits -- should likewise be on the increase. Page 1- Front Page Pages 1 & 2 report “what” happened.

Foundation® FastTrack Page 2 - Stocks & Bonds Closing Stock Price Earnings Per Share (EPS) Market Capitalization Dividend Payouts Bond Rating (S&P) S&P rating of BBB and higher - considered a good credit risk BB and below is “junk” bond rating The “Analyst Report” on the website (Wealth Creation category) provides extensive coverage of Stock Price issues

Foundation® FastTrack Page 3 – Financial Analysis Cash Flow Statement helps diagnose Emergency Loans and analyze use of working capital. Numbers in parenthesis? Money is being sucked out of the cash account. Excessive inventory and un-funded Plant & Equipment investments are two common causes for Emergency Loans. Balance Sheet Survey what does a large $ value for the Plant & Equipment line on the Balance Sheet Survey suggest? Either that team wants to be a cost leader (automation increases/capacity expansions), or they have added new products. Income Statement Survey allows teams to compare cost structures and R&D/Marketing expense return rates against competitors. More detailed Income Statement provided as part of team’s private Annual Reports. Pages 3-9 illustrate “why.”

Foundation® FastTrack Page 4 – Production Analysis Assess plant utilization, inventory management, analyze competitors plant automation and capacity changes, and compare unit sales figures. Good number for plant utilization? At least 100%, 150% to 180% is better (as long as it doesn't end up in a warehouse as excess inventory). Ideal inventory position? One unit in each line - rarely happens. About 10% worth of sales is a good benchmark for inventory when developing sales forecasts. If you sold 1M units, about 100K in inventory would be fine. Stockouts are costly: 1) The SG&A costs have already been recovered, so missed sales would have gone more heavily towards profit; 2) Competitors often pick up additional sales as a result of your stockout.

Foundation® FastTrack Pages 5-6 Market Segment Analysis Assess market penetration, effectiveness of Marketing expenses, competitor R&D revision dates. Get a consumer’s perspective on products in the market (December Customer Survey). "Statistics" box - was all customer demand met? If not, how much missed opportunity was left on the table? (Unmet demand doesn't carry forward to the next round). Market Share Actual vs. Potential graph shows the impact of stockouts. Detailed product comparison

Foundation® FastTrack Page 7 – Market Share Report Quick reference for checking whether market customer demand was met (chart on the left), and assessing where each team is placing emphasis (chart on the right).

Foundation® FastTrack Page 8 – Perceptual Map Shows where all products are positioned at the end of the round. The more products, the more intense the competition. Products positioned outside the parameters of all segments will generate zero customer demand. Products positioned outside the solid line, but inside the dotted line, will generate decreased demand within that segment. Products that straddle the fence between segments may be sofa-beds: not great sofas, not great beds. Products positioned at the trailing- edge of any given segment will have lower material costs than they would have at the leading-edge of the segment (given an identical MTBF rating).

Annual Reports Company Annual Reports are provided on the website and in the foundation.xls spreadsheet program Balance Sheet Cash Flow Statement Income Statement Same Format as Proforma Reports

Annual Reports Income Statement Detailed by product An indispensable tool for all Managers Compare to Proforma Income Statement to identify tactical mistakes