ACCT 2197

Performance Analysis and Simulations

Class 2

Class 2 schedule
1. Overview of semester work schedule
2. Firm-level performance analysis metrics 3. Introduction to Rehearsal Rounds

4. In-class student work doing Rehearsal Round

Essential Material
If you have not done so yet, as priority, you should review as soon as possible 1. Course Guide
2. Capsim Guide 3. Rehearsal Script

Rehearsal Rounds
1. 4 Rehearsal Rounds in total 2. Rehearsal Round 1 has online coaching

3. At any time during semester, Rehearsal Rounds can be used for Solo practice of business decisionmaking Refreshing & Revising business tactics Evaluating impact of business decisions

Rehearsal Rounds
4. You can undo each rehearsal round just finished any number of times 5. Should do at least 2 Rehearsal Rounds More is better

Firm-level PA & Capstone Courier

Understanding & Using Courier is vital to your company performance
Courier Contents 1. Industry Summary 2. Stock and Bond market 3. Financial Analysis Summary 4. Production data 5. Segments information 6. Market Share 7. Perceptual Map 8. HR & TQM data

Making sense of Financial Reports

There are a lot of numbers to evaluate

Each line & each number can tell us something About us, our competitors, the industry Performance Analysis has several tools to simplify this volume of data

Page 1 - Industry Summary

Well Managed, Healthy Company

NB: Guidelines only!

RoS: Asset Turnover ROA Leverage Ratio: ROE: Contribution Margin:

> 5% >1<3 > 5% < 20% 1.5x 2.5x < 15% > 30%

PA & Benchmarking EXAMPLE Sales Growth

If Total market growth yearly = 12% & if at PR 0 All Firms have $101 M sales

PR 1 sales = ($101 M x 12%)+$101 M Around $113 M

PR 2 average Sales growth = ($113 M x 12%) + $113 M Around $127 M

Financial Analysis Summary ISSUES

What analysis can we do of Cash Flow, Income Statement & Balance Sheet?
If firm is expanding or contracting Weakened / strengthened financially Buying or selling assets Managing inventory well or not Changing approach to AR What other firms strategy might be

CC Page 2 Stocks & Bonds

CC Page 3 - Financial Summary

CC Page 4 - Production

EXAMPLE of PA: Chester firm

EXAMPLE Low End Segment information

Why is a product better than yours?

CC page 6 Low End Segment information

CC page 6 Low End Segment information

CC page 6 Low End Segment information

CC page 6 Low End Segment information

CC page 6 Low End Segment information

5 Flora & Feat

CC page 6 Low End Segment information

CC page 10 Market Share

Market Share & Capstone Courier

Lost sales 8.1% of 12,275,000 units = 994,275 units 994,275 units x at $23 per unit
= $22,868,325 lost sales

CC page 12 Human Resource

CC page 12 TQM data

Rehearsal Round 1 Script

Covers basic business decision-making for

1. Tactic 1: How do we reposition a product? 2. Tactic 2: How do we market a product? 3. Tactic 3: How do we schedule production and manage inventory? 4. Tactic 4: How do we modify plant and equipment? 5. Tactic 5: How do we raise money and pay debt? 6. Tactic 6: How do we invent a new product?

Any Questions ?

Please commence the tasks set for you for Class 2 That is Rehearsal Rounds

Your Tasks for Class 2

Start the Rehearsal Rounds 1.Go to Capsim.com 2.Log into Capsim

3.Go to Getting Started area

4.Select Complete the Rehearsal Tutorial

a) Read the Rehearsal Instruction

b) Open the Rehearsal Tutorial

c) Do the Rehearsal Tutorial activities