OVERVIEW

Typical Requirements of Annual Report:

An annual report is a financial document that a public company prepares for its shareholders. . These reports are be used by potential investors and securities analysts to evaluate a company’s stock and encourage investor to invest in your company. The report is usually the best source of information for most people to determine the financial health of a company. An annual report gives a basic overview of the company over the past year. It usually includes: an opening letter from the CEO, a business profile, a management analysis, and financial data.

*To get an idea of what a shareholder is I would encourage you to download 1-2 shareholder reports from publicly traded companies.

Here’s a basic overview of what is contained in a traditional annual report:

Chairman’s Letter

This is generally the first part of an annual report. The chairman’s letter will set the tone, establish a theme, and most importantly summarize the report for the readers. The letter will highlight the company’s accomplishments for the year, as well as the company’s failures. The letter will state what led to the company’s successes and will also address how it dealt with its failures or issues.

The chairman’s letter will provide an analysis of overall business performance, insights into the markets it’s in, and any opportunities for growth. The letter will also point out any challenges or risks facing the company such as changing market conditions, recent scandals, consumer trends, etc. The letter often ends by giving a sense of corporate direction for the next year.

* Your team will need to pick a CEO and designate positions for the other players.

Business Profile

The business profile is a basic element of an annual report. This section describes the company and includes the following information: what it does to generate revenue, its products/services, its operations, subsidiaries it owns (if any), the market it is competing in (including competitors), and risk factors for the business. Major changes made in the past year are also highlighted such as new products, sales/marketing shifts, new services, seasonal factors (ex the holiday season), or any special operating costs.

Management’s Analysis

In this section, management discusses the company’s operations in detail. Management will compare this year’s results to results from the past. Management will often use charts and graphs to highlight the most important data. Towards the end of the analysis, management will outline its own expectations and plans for the company’s future growth.

*All charts and graphs will need to be put in appendix as they do not count toward page length, but you will need to refer to them within the main body by numbering them and make sure you discuss them within the management as well as financial analysis below (see Figure 1) or (see Table 2).

Financial Analysis & Statements

What’s a report without numbers? In the report, the company presents the basic financial statements. Most businesses won’t provide all the financial statements because that generally causes information overload, and most readers of the report won’t go through everything. However, they can be downloaded from the information provided in the BSG reports.

The statements most companies will include are:

1. the consolidated balance sheet,

2. the income statement,

3. the statement of cash flows

4. the statement of shareholders.

5. Some companies will include more financial information depending on their industry and size.

6. This section includes an independent auditor’s report to confirm that the company’s financial statements are fairly presented and in conformity with generally accepted accounting principles. (*This last element will not be possible, but you may state what company you would use for auditing purposes).

REQUIREMENTS OF YOUR COMPANY’S SHAREHOLDER REPORT

For purposes of our class your team will also want to incorporate the following information outlined below within your shareholder’s report and in all cases, you must justify your team’s choices.

1. Cover Page-you can get creative on this and may want to include a logo

2. Letter from CEO

3. Business Profile Section:

1.

a. Identify your firm’s vision, mission, objectives, corporate and business-level strategy.

i. Discuss at which point in the game you settled on your company’s strategy and why. (Examples: At the very start? During the practice rounds? At the beginning of the graded rounds? Round 1? Round 2? Etc.).

b. Identify which companies your company considers to be your 2-3 closest competitors and state why. Also include each of their business level strategies and 2 of their key strengths and weaknesses.

c. Conduct an internal and external analysis of your company which should include a porter’s 5 forces analysis, VRIN analysis, a swot analysis, and if international PESTEL.

i. In your analysis make sure to include a minimum of 3-4 in each sector (e.g., 4 strengths, 4 weaknesses, etc.… in your SWOT).

ii. Discuss what is the significance of each of these?

iii. Describe in one or two sentences the importance of each strength and weakness (i.e., how did the strength help your firm, or how did each weakness impede your firm).

iv. Discuss how your team plans to deal with each of these opportunities and/or threats?

v. Identify how your competitors’ strengths and weaknesses compare to your firm’s strengths and weaknesses?

3) Management’s Analysis Section:

a. Provide an overview of your management structure and operations, which should include overseas operations if you have any.

i. Include an organizational chart (to demonstrate type of structure)

b. Discuss your company’s overall corporate competitive strategy in branded footwear in some detail and how that strategy has evolved over the years you have managed the company. You may need to discuss if your company’s strategy in branded footwear varies markedly from geographic region to geographic region or if your strategy for branded sales to retailers differs in important ways from your strategy for Internet sales.

c. Discuss your company’s competitive strategy in private label in some detail and how that strategy has evolved over the years. Again, more than one slide may be needed if your company’s strategy in private-label footwear varies markedly from one geographic region to another.

d. Industry Analysis-Discuss the companies you consider to be your strongest/closest competitors in branded footwear as of the last year or two of the simulation and (2) those companies that are your strongest/closest competitors in the private-label segment of the marketplace.

e. Discuss your company’s production strategy and work force compensation strategy

f. Detail the actions your firm will be taking to out-compete these close rivals in the next two years (assuming the simulation continues for several more years). Since the actions may differ as between branded and private-label footwear, you may need to cover both.

g. Identify how your management team has worked to either create (strengthen)

each strength or reduce each of your firms’ weakness.

h. What has your team done to create new strengths and why was that strength

valuable?

i. What did your management team do to either eliminate each of your company’s

weakness or to reduce its ability to hinder your firm?

i.What specific actions did your management take to either neutralize each

competitor’s strengths or take advantage of their weaknesses?

ii. Discuss the moves your company would make over the next several years to win out over your company’s close competitors and improve their company’s

performance and market standing.

iii. Discuss your company’s production strategy and work force compensation strategy

iv. Discuss how you plan to manage your company’s supply chain given the issues we are currently facing with Covid 19.

4) Financial Analysis Section:

a. A brief review of the financial and strategic performance of your company during the time you have run the company.

b. Discuss your company’s finance strategy (as concerns dividends, use of debt versus equity, stock issues/repurchases, actions to achieve/maintain a strong credit rating, etc.)

i.You should clearly describe your company’s dividend policy during the period you have managed the company. Here, you should also set forth what sort of dividend increases, if any, you would likely consider paying out in the next

two upcoming years (given the EPS targets you have established).

c. Also include in your financial analysis the following charts with an explanation for each showing the following:

i.

i. Include your company’s performance for all decision rounds.

ii. Trends in the company’s annual total revenues

iii. Trends in the company’s annual earnings per share (EPS)

iv. Trends in the company’s annual return on equity investment (ROE)

v. Trends in the company’s annual credit rating

vi. Trends in the company’s year-end stock price

vii. Trends in the company’s annual image rating

viii. Trends in global unit sales (both branded and private-label footwear)

ix. Trends in the company’s global market share

d. Discuss your company’s performance targets for the next year or two, assuming the simulation continued.

e. Provide a deep analysis of personal lessons learned from the simulation game and how your management team plans to continue to grow the company and convince shareholders to remain invested in it.

OBTAINING REPORTS

*To obtain your company’s financial reports you may access the BSG simulation game and within the Decisions/Reports you can access the Performance Highlights report containing graphs showing your company’s performance on each of the above performance indicators. You may pull graphs for the final year of the simulation and save them to your local storage device and then insert into a Word document. Sometimes it is easier to download into a powerpoint slide and then edit it and cut and paste into a main document. If you wish to create additional performance graphs, you can do so, but the above six bar graphs tell an adequate story about your company’s historical performance. *Most of the financials will go to the appendix section but you may refer to them in the main body by stating (see figure 1 or Table 2 etc.).

FORMATTING INSTRUCTIONS

1. This should be submitted as a Word document double spaced using APA formatting guidelines. You may refer to the Purdue owl APA formatting guidelines and sample paper if you need assistance with formatting. One submission per team will be uploaded and posted on Blackboard in the appropriate assignment link by the deadline.

2. The document should have the following title,

“_____ Company- 2022 Annual Report to Shareholders.”

(Do not deviate from this title)

2a. The file name should be __________Company 2022 Annual Report.doc

(Do not deviate from this title)

3. The paper should be in the format of a “Report to Shareholders” from the management of your company to the company’s shareholders. This means it should look like a traditional shareholder report. Download a couple publicly traded companies as examples.

4. The first page should be a cover sheet that includes the name of the company and the names of each of the officers of the company, and their respective titles. (Make up fictitious names for the other members of your team).

5. The second page should be a “letter to shareholders,” signed by your team’s, CEO.

6. The third page should be a table of contents, which should be an outline of the major topics you are covering and the page numbers.

7. The fourth page should be an “Executive Summary”

i. (Collectively, the Executive Summery and the Letter to Shareholders should concisely summarize everything contained in the full report)

8. The rest of the your team’s shareholder report will follow after the executive summary.

In addition to the above, there should be no more than (10-12 maximum) pages of text, plus exhibits (graphs, charts, figures). However, the downloaded reports should go in the appendix
and do not count towards page limit. Also, if you have references (sources for where you
found additional information), they should also go toward the back and does not count in page
count.

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OVERVIEW

Typical Requirements of Annual Report:

An annual report is a financial document that a public company prepares for its shareholders. These reports are be used by potential investors and securities analysts to evaluate a company’s stock and encourage investor to invest in your company. The report is usually the best source of information for most people to determine the financial health of a company. An annual report gives a basic overview of the company over the past year. It usually includes: an opening letter from the CEO, a business profile, a management analysis, and financial data.

*To get an idea of what a shareholder is I would encourage you to download 1-2 shareholder reports from publicly traded companies.

Here’s a basic overview of what