COR VAN RAAY AGRIBUSINESS CASE COMPETITION Case workshop

AGENDA  Discussing a Case  8 Important Steps in Case Presentation  PowerPoint  Presentation Key Points  Figuring Out the Numbers

WHAT IS A CASE?  A real world business issue  Can be any major, strategy or general business  Lots of information  General, Accounting or major specific  Critical Thinking  Textbook Knowledge to Use

IMPORTANT STEPS  Introductions  Problem Statement  Analysis  Alternative Solutions  Criteria Matrix  Decision  Implementation  Contingency Plan  Conclusion

PROBLEM STATEMENT  Primary Problem  May be more than, but choose the most important  Secondary Problem  1-2 sentences  Be clear  Connect the rest of the presentation

ANALYSIS  Looking at the big picture  Internal to company  External to environment  3 ways to Analyze  SWOT  Porters 5 Forces  PESTLE

SWOT

 Internal to the Company  Strengths and Weaknesses  External to the Company  Opportunities and Threats  Strengths  What is the company doing well  Weaknesses  What do we need to improve  Opportunities  What can we capitalize on  Threats  What could de-rail our business

PESTLE Differences between host and home country Interaction between countries/states/provinces

PESTLE

PORTER’S 5 FORCES Analyzes Competitive Position within Industry Rivalry Threats of New Entrants Bargaining power of buyers Threat of substitutes Bargaining power of suppliers

ALTERNATIVE SOLUTIONS  Qualitative  Table works well  Show all options  Advantages and Disadvantages  Pro/ Cons  Outcome Specific

CRITERIA MATRIX  Quantitative  Backs up decision  Table  Use weighted criteria  Be confident on numbers and explain how

PROVIDING EVIDENCE WITH NUMBERS  Be confident  Be able to defend your numbers  Could be based on information provided by company and industry  Double check the numbers

DECISION  1 choice, 1 slide  Be confident  Everything before should lead to it  Everything after should tell how to achieve the decision

IMPLEMENTATION  Usually longest part of presentation  Worth most of mark  Think SMART  Specific  Measurable  Achievable  Relevant  Timely

CONTINGENCY PLAN  Plan B  If economy…  If government…  If family is concerned…  Do not change your decision

CONCLUSION  Summarize main points  Highlight:  Decision  Implementation  Push Benefits  Need to sell the idea  Strong final ending

POWERPOINT  Keep it simple  Clean and Organized  No grammatical errors

POWERPOINT  Large Font:  Titles: 38-48pt  Subtitles: 28-36pt  Body:  Color Contrast  Titles are important  12 slide limit

PRESENTATION SKILLS Live the Case Show Passion High Energy Expand on Points  Remember to use terminology  You- referring to company  Us- referring to team presenting  Consulting Firm giving ideas  Smile and acknowledge

PRESENTATION SKILL  Talk to Audience  Glance at slides do not read  Try and not hide  Clothing and Appearance matter  Pay attention to person speaking  Entrance and Exit etiquette

MARKING RUBRIC  Will be posted online before competition and ed out  Content and Implementation most important section  Also marked on:  Organization  Presentation Skills  Layout  PowerPoint  Originality  Etc.

UNDERSTANDING THE NUMBERS

STEP 2: CASH/PROFIT Show me the MONEY!

SALE PROJECTIONS

MIX OFFERING PROJECTIONS Unlimited Units Max 150 Units Most Profitable

STEP 3: DETERMINING A COMPANIES VALUE TODAY USING PROJECTIONS Putting those cash/profit projections to use

A STARTING POINT

SIMPLE DISCOUNTED CASH FLOW (DCF) -Use cash flow/profit from previous projections -Discount rate (WACC) incorporates the firms cost of equity and debt to determine the average rate based on capital structure (weighted for debt/equity) -If this is unavailable think about opportunity costs of similar investment, expected ROI, and internal return, interest rate,

DISCOUNT RATES IMPACT ON DCF But an important point to understand is that “You can’t compensate for risk by using a high discount rate.” If 15% was used to discount $1,753, you would only be willing to pay $1,524 in today’s money for $1,753. On the other hand, using a 9% discount rate would give a value of $1,608 for the $1,753. You can see how using a high discount rate will give a lower valuation than a low discount rate.

NPV FORMULA

SIMPLE NPV A positive net present value indicates that the projected earnings generated by a project or investment (in present dollars) exceeds the anticipated costs (also in present dollars). Generally, an investment with a positive NPV will be a profitable one and one with a negative NPV will result in a net loss. This concept is the basis for the Net Present Value Rule, which dictates that the only investments that should be made are those with positive NPV values.

RATIOS Snapshots of a Company

RATIOS Gross Margin  Revenue-COGS / Revenue  GM represents the proportion of each dollar of revenue that the company retains as gross profit Profit Margin  Net Income / Revenue  This shows how much the company made in OVERALL profit for every $1 it generates in sales

RATIOS Return On Investment  Gain From Investment - Cost of Investment/Cost of Investment  A performance measure used to evaluate the efficiency of an investment to compare it against other investments Return On Equity  Net Income/Shareholder's Equity  This ratio measure's how profitable a company is with the money shareholder's have invested

OTHER REMINDERS  RSVP online if haven’t done so  Mandatory Meeting 8pm Friday November 6- Markin Hall