stockholders presentation - pfew presentation.pdfstockholders presentation . panel of judges...

Stockholders Presentation

Warren Buffet

Where

What

Who

How

Why

When

Stockholders

Presentation

PURPOSE

• Demonstrate what has been learned

• Become familiar with financial statements.

• Prepare, present, and explain financial statements.

• Present related information, including charts and graphs.

• To allow all company members to participate in a formal

rehearsed presentation.

IMPORTANCE

• Recognition of effort.

• Counts as one fourth of top company score.


COMPETITION AND SETTING

ONE ROOM

• Companies will rotate into room

• Fifteen minutes total

• Three minutes for setup/take down

• Twelve minute presentation

TWELVE MINUTE PRESENTATION

• Present twelfth quarter decision to judges

• Present financial statements

• Management discussion and analysis

• Two minutes for questions

ONLY MATERIALS SUPPLIED BY PFEW MAY

BE USED IN THE PRESENTATION


PANEL OF JUDGES

REPRESENT THE STOCKHOLDERS

MANDATORY CONTENT

1) Financial Statements

2) Management’s Discussion and Analysis

3) Judges’ Questions


FINANCIAL STATEMENTS

Presentation must include:

1. A two year (8 consecutive quarters) comparative

Statement of Income & Profits Retained

2. Balance Sheet (also 2 year comparative)



STATEMENT OF INCOME & PROFITS RETAINED

• Year to year or two year comparative

• 8 consecutive operating quarters

• Measurement over a fiscal operating period

• Total income

• Total expenses

• Profit before taxes

• Taxes

• Net income

• Dividends

• Profits Retained


Widget Manufacturing Company


For the Year Ended December 31, 20x2

Quarter 0 Example

INCOME 20x2 20x1 %Chg

Sales $1,190,000 $1,276,000 -6.7%

Cost of Goods Sold -595,000 -637,000 -6.6%

Gross Margin $595,000 $639,000 -6.9%

Interest Income 0 2,000 -100%

Total Income $595,000 $641,000 -7.2%

EXPENSES

Quality & Product Dvlp. $60,000 $85,000 -29.4%

Selling/Adv. & Mkt. Research 95,000 95,000 0.0%

Warehousing (Inventory Exp.) 23,000 29,000 -20.7%

Interest Expense 28,000 27,000 3.7%

Other Expense 0 0 0.0%

Overhead Expense 200,000 200,000 0.0%

Depreciation 65,000 64,000 1.6%

Total Expenses $471,000 $500,000 -5.8%

Profit Before Taxes $124,000 $141,000 -12.1%

Taxes -50,000 -56,000 -10.7%

Net Income (Loss) $74,000 $85,000 -12.9%

Dividends -$5,000 -$5,000 0.0%

Profits Retained $69,000 $80,000 -13.8%

Income & Expense in 000s Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 5 Qtr 6 Qtr 7 Qtr 8

Sales 319 319 319 319 298 297 298 297

Cost of Goods Sold 159 159 159 160 149 149 149 148

Gross Margin 160 160 160 159 149 148 149 149

Interest Income 1 0 1 0 0 0 0 0

Total Income 161 160 161 159 149 148 149 149 INCOME 20x2 20x1 %Chg

Sales $1,190 $1,276 -6.7%

Quality Management 10 10 10 10 5 5 5 5 Cost of Goods Sold -595 -637 -6.6%

Inventory Expense 7 7 7 8 5 5 5 8 Gross Margin $595 $639 -6.9%

Advertising & Promotion 5 10 10 10 10 10 10 5 Interest Income 0 2 -100.0%

Sales Force 15 15 15 15 15 15 15 15 Total Income $595 $641 -7.2%

Product Development 10 10 10 15 10 10 10 10

Market Research 0 0 0 0 0 0 0 0 EXPENSES

Other Expenses 0 0 0 0 0 0 0 0 Note 1 => Quality & Product Dvlp. $60 $85 -29.4%

Interest Expenses 6 7 7 7 7 7 7 7 Note 2 => Selling/Adv. & Mkt. Research 95 95 0.0%

Overhead Expenses 50 50 50 50 50 50 50 50 Warehousing (Inventory Exp.) 23 29 -20.7%

Total Expenses 103 109 109 115 102 102 102 100 Interest Expense 28 27 3.7%

Other Expense 0 0 0.0%

Less Depreciation 15 16 16 17 17 16 16 16 Overhead Expense 200 200 0.0%

Depreciation 65 64 1.6%

Profit Before Taxes 43 35 36 27 30 30 31 33 Total Expenses $471 $500 -5.8%

Less Taxes 17 15 15 9 12 12 13 13

Profit Before Taxes $124 $141 -12.1%

Net Profit after Taxes 26 20 21 18 18 18 18 20 Taxes -50 -56 -10.7%

Less Dividends 1 1 1 2 2 1 1 1 Net Income (Loss) 74 85 -12.9%

Dividends -5 -5 0.0%

Profits Retained 25 19 20 16 16 17 17 19 Profits Retained $69 $80 -13.8%

Note 2: Sum of Advertising & Promotion, Sales Force, and Market

Research Expenses

Note 1: Sum of Quality Management and Product Development Expenses

In Thousands

For the Year Ended December 31, 20x2

Input from Quarterly BizSim Reports for Income & Expenses Presentation



Note: On the Statement of Income & Profits Retained, each Income or Expense Item for Year 20x1 is the sum

of Quarters 1 thru 4. Each Item for Year 20x2 is the sum of Quarters 5 thru 8.

This example is displaying Quarter 0 data in year 20x2

• Year to year or two year comparative

• 8 consecutive operating quarters

• Corporate snapshot in time

• Assets

• Liabilities

• Stockholder’s Equity



BALANCE SHEET

Balance Sheet

• Shows the assets of the corporation, its liabilities,

and the owner’s equity

• Portrays the financial position as of the date stated

in the heading of the statement

• Observe that Total Assets equal the Total of

Liabilities and Equity

Example ……….


Balance Sheet

As of December 31, 20x2

Quarter 0 Example

ASSETS 20x2 20x1 %Chg

Cash $100,000 $47,000 112.77%

Inventory $68,000 $56,000 21.43%

Total Current Assets $168,000 $103,000 63.11%

FIXED ASSETS

Plant and Equip. (at cost) $2,165,000 $2,160,000 0.23%

Accumulated Depreciation $- 65,000 $-64,000 1.56%

Net Plant and Equipment $2,100,000 $2,096,000 0.19%

TOTAL ASSETS

$2,268,000

$2,199,000

3.14%

LIABILITIES

Loan Payable $1,100,000 $1,100,000 0.0%

Total Liabilities $1,100,000 $1,100,000 0.0%

EQUITY

Common Stock $1,000,000 $1,000,000 0.0%

Retained Earnings $168,000 $99,000 69.70%

Total Equity $1,168,000 $1,099,000 6.28%

TOTAL LIABILITIES

AND EQUITY

$2,268,000

$2,199,000

3.14%

This example is displaying Quarter 0 data in year 20x2

Quarter 4 Balance Sheet

Cash 47

Inventory 56

Plant/Equipment Cost 2160

-Accum Depreciation 64 ASSETS 20x2 20x1 % Chg

Net Plant/Equipment 2096 Cash 100 47 112.8%

TOTAL ASSETS 2199 Inventory 68 56 21.4%

Total Current Assets 168 103 63.1%

Liabilities: Bank Loan 1100

Equity: FIXED ASSETS

Common Stock 1000 Plant and Equip. (at cost) 2165 2160 0.2%

Retained Earnings 99 Accumulated Depreciation -65 -64 1.6%

TOTAL LIABILITIES+EQUITY 2199 Net Plant and Equipment 2100 2096 0.2%

TOTAL ASSETS 2268 2199 3.1%

Quarter 8 Balance Sheet

Cash 100 LIABILITIES

Inventory 68 Loan Payable 1100 1100 0.0%

Plant/Equipment Cost 2165 Total Liabilities 1100 1100 0.0%

-Accum Depreciation 65

Net Plant/Equipment 2100 EQUITY

TOTAL ASSETS 2268 Common Stock 1000 1000 0.0%

Retained Earnings 168 99 69.7%

Liabilities: Bank Loan 1100 Total Equity 1168 1099 6.3%

Equity:

Common Stock 1000 TOTAL LIABILITIES

Retained Earnings 168 AND EQUITY 2268 2199 3.1%

TOTAL LIABILITIES+EQUITY 2268

Note: Under Liabilities, Loan Payable is the same as Bank Loan

from Quarterly Reports

In Thousands

Input from Q4 and Q8 BizSim Reports for Balance Sheet


Balance Sheet

As of December 31, 20x2

Presentation

Management Discussion

and Analysis

Liquidity

Capital Resources

Results of Operations

Forward looking Data

Common Stock Strategy


Liquidity – adequacy of cash:

• Did the company have enough cash

to continue operations?

• Did it borrow money to operate or

invest in a new plant?

+ =


Capital Resources:

• Discuss plant facilities

• Expansion during the period

• Financing of these assets…

• Did you borrow money to acquire

the assets?


Results of Operations:

1. Analysis of revenue and changes in revenue.

2. Trends that affected revenue or expenses,

i.e. inflation.

3. The extent to which increases in net sales or

revenues are attributable to price increases ,

or an increase in the number of units sold.

4. The effect of inflation on the sales and net

income of the company.


5. The level of production, i.e. 100% of

capacity or less, and its effect on cost of

sales and net profit.

6. Spending for research and development

and advertising

7. Unusual or significant events which

affected or could affect operations.

Results of Operations (cont.):


Forward Looking Data

• What do you see as the future of the company?

• This could include plans for new products, new

facilities, or acquisitions.

Remember!! Submit a copy of your

12th Quarter decision to the judge.


Common Stock Strategy:

Your Company’s Stock (40,000 shares)

• Price per share

• Earnings per share

• Dividend Strategy


SUPPLEMENTAL CHARTS & GRAPHS

0

20

40

60

80

100

120

1 2 3 4 5 6 7 8

Widget Manufacturing Company Widget Manufacturing Company

0

20

40

60

80

100

120

1 2 3 4 5 6 7 8


0

20

40

60

80

100

120

1 2 3 4 5 6 7 8


Line Graph Pie Chart

Bar Graph Comparative Bar Graph

Note: Do not show Quarters 1 thru 8 on your Graphs.

Show Year 1 with Quarters 1,2,3,4

Year 2 with Quarters 1,2,3,4


1 2 3 4 1 2 3 4

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

Judges’ Questions:

• Designed to measure ability and understanding of the

management team

• Allow at least two minutes

• Standard set of questions

• Anything from the presentation

• Questions answered during management discussion

and analysis


A VERY important

person!

Company Historian

TOP TEN THINGS TO DO!

10. Involve all company members in

presentation

9. Have presentation support your

stated strategy

8. Make eye contact

7. Use business vocabulary

6. Submit your 12th quarter decision

5. Practice, Practice, Practice

4. Allow time for questions

3. Time the presentation

2. Rehearse

1. Start early (today)!!


TOP TEN THINGS NOT TO DO!

10. Make up data

9. Involve only one or two company

members

8. Forget the 12th quarter decision

7. Forget to time the presentation

6. Have financials that do not foot

5. Use unauthorized materials

4. Discuss a strategy not supported by

operations

3. Rehearse past 10:45 p.m.

2. Wing it

1. Wait until Thursday to start


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