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D The Determinators (Industry 46)

PERFORMANCE HIGHLIGHTS Year 5 (practice)

Financial Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15

EPS (earnings per share) ROE (return on equity) Stock Price Credit Rating Image Rating Net Revenues ($000s)

AC Camera UAV Drone

Total AC Camera Sales (000s of units)

North America Market Share Europe-Africa Market Share Asia-Pacific Market Share Latin America Market Share Total Market Share

UAV Drone Sales (000s of units)

North America Market Share Europe-Africa Market Share Asia-Pacific Market Share Latin America Market Share Total Market Share

$0.75 14.0 % $12.00

B 70

188,637 145,491 334,128

285.0 8.3 % 240.0 8.3 % 185.0 8.3 % 130.0 8.3 %

840.0 8.3 % 52.0

8.3 % 43.0

8.3 % 28.0

8.3 % 17.0

8.3 % 140.0 8.3 %

Strategic / Operating Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15

PQ Rating AC Camera UAV Drone

Compensation ($ per PAT member)

AC Camera UAV Drone

PAT Productivity (units per PAT)

AC Camera UAV Drone

Labor Cost ($/unit assembled)

AC Camera UAV Drone

Production Cost ($/unit assembled)

AC Camera UAV Drone

Marketing Cost ($ per unit sold)

AC Camera UAV Drone

Operating Profit ($ per unit sold)

AC Camera Margin UAV Drone Margin

4.0★ 4.0★

25,000 25,000 3,000 1,500 33.67 65.38

156.97 806.22 17.73 77.71 29.33

13.1 % 65.75 6.3 %

Earnings Per Share (EPS)

Copyright © 2019 GLO-BUS Software, Inc. Page 1

EPS

5 6 7 8 9 10 11 12 13 14 15 -$1

$0

$1

$2

Year

E P

S

D The Determinators (Industry 46)

ASSEMBLY AND FACILITY OPERATIONS Year 5 (practice)

Action-Capture Cameras AC Camera Production

Regular-Time 840.0 Overtime 0.0 Total 840.0

Units Assembled (000s)

Extra Performance Features 3 Number of Models 3

P/Q Rating 4.0 

Product Attributes

Product R&D Expenditures in Year 5 ($000s) $ 20,000 Cumulative Product R&D Expenditures ($000s) $ 45,000

AC Camera Assembly Facility Space Available for Workstations (at end of Year 4) 300 spaces New Spaces Added (facility expansion at begin. of Y5) 0 Space Available for ACC Workstations (in Year 5) 300 spaces

Installed Workstations (at end of Year 4) 280 workstations New workstations Added (at beginning of Y5) 0 Total Installed Workstations (available for use in Y5) 280 workstations

Investment in AC Camera Facility ($000s)

Beginning Gross

Investment

New Year 5

Investment

Year 5 Facilities

Investment Plant Facility $ 120,000 $ 0 $ 120,000 Workstations 30,000 0 30,000 Robotics Upgrade 0 0 0 Total (Gross) Investment in AC Camera Facilities $ 150,000 – Accumulated Depreciation (at the end of Year 4) 30,000 – Current-Year Depreciation (5% of gross investment) 7,500 Net Investment in AC Camera Facilities $ 112,500

AC Camera Work Force Statistics Year 5

Decisions $ Per

Worker Base Wage Per PAT Member +1% $ 20,400 Incentive Bonus (to reduce warranty claims) $2.40 / unit 1,800 Attendance Bonus (for perfect attendance) $800 / worker 800 Fringe Benefit Package $2,000 / worker 2,000 Total Compensation (annual pay per worker) $ 25,000 Best Practices / Productivity Improvement Training ($/PAT) $ 1,000 PAT Productivity (units assembled per PAT per year) 3,000 Number of PATs Employed (for AC camera assembly) 280 × Number of Workers Per PATs (no robotics upgrade) × 4 Total Number of Workers Employed 1,120

AC Camera Production and Assembly Costs $000s $ / Unit

AC Camera Components and Features

Image Sensor 8,400 10.00 LCD Display Screen 8,400 10.00 Image Quality 6,720 8.00 Photo Modes 7,560 9.00 Camera Housing 6,720 8.00 Editing / Sharing 6,720 8.00 Included Accessories 8,400 10.00 Extra Performance Features 7,560 9.00

Total Cost of Components and Features 60,480 72.00 Assembly Labor Costs

Regular-Time Labor 28,000 33.33 Overtime Labor 0 0.00 PAT Training 280 0.33

Total Cost of Labor and Training 28,280 33.67 Product R&D Expenditures 20,000 23.81 Allowance for Warranty Repairs (7.0% claims) 2,945 3.51 Plant Operations and Maintenance 12,650 15.06 Depreciation of Plant and Equipment 7,500 8.93 Total Camera Production/Assembly Cost 131,855 156.97

UAV Drones UAV Drone Production

Regular-Time 140.0 Overtime 0.0 Total 140.0

Units Assembled (000s)

Extra Performance Features 5 Number of Models 2

P/Q Rating 4.0 

Product Attributes

Product R&D Expenditures in Year 5 ($000s) $ 15,000 Cumulative Product R&D Expenditures ($000s) $ 30,000

UAV Drone Assembly Facility Space Available for Workstations (at end of Year 4) 110 spaces New Spaces Added (facility expansion at begin. of Y5) 0 Space Available for Drone Workstations (in Year 5) 110 spaces

Installed Workstations (at end of Year 4) 100 workstations New workstations Added (at beginning of Y5) 0 Total Installed Workstations (available for use in Y5) 100 workstations

Investment in UAV Drone Facility ($000s)

Beginning Gross

Investment

New Year 5

Investment

Year 5 Facilities

Investment Plant Facility $ 90,000 $ 0 $ 90,000 Workstations 10,000 0 10,000 Robotics Upgrade 0 0 0 Total (Gross) Investment in UAV Drone Facilities $ 100,000 – Accumulated Depreciation (at the end of Year 4) 5,000 – Current-Year Depreciation (5% of gross investment) 5,000 Net Investment in UAV Drone Facilities $ 90,000

UAV Drone Work Force Statistics Year 5

Decisions $ Per

Worker Base Wage Per PAT Member +1% $ 20,400 Incentive Bonus (to reduce warranty claims) $4.80 / unit 1,800 Attendance Bonus (for perfect attendance) $800 / worker 800 Fringe Benefit Package $2,000 / worker 2,000 Total Compensation (annual pay per worker) $ 25,000 Best Practices / Productivity Improvement Training ($/PAT) $ 1,000 PAT Productivity (units assembled per PAT per year) 1,500 Number of PATs Employed (for AC camera assembly) 94 × Number of Workers Per PATs (no robotics upgrade) × 4 Total Number of Workers Employed 376

UAV Drone Production and Assembly Costs $000s $ / Unit

UAV Drone Components and Features

Built-In Camera 24,683 176.31 GPS / WiFi / Bluetooth 7,000 50.00 Battery Pack 9,800 70.00 Rotors / Performance / Controller 5,600 40.00 Body Frame Construction 2,380 17.00 Obstacle Sensors 6,300 45.00 Camera Stabilization Device 2,520 18.00 Extra Performance Features 12,600 90.00

Total Cost of Components and Features 70,883 506.31 Assembly Labor Costs

Regular-Time Labor 9,059 64.71 Overtime Labor 0 0.00 PAT Training 94 0.67

Total Cost of Labor and Training 9,153 65.38 Product R&D Expenditures 15,000 107.14 Allowance for Warranty Repairs (7.5% claims) 3,150 22.50 Plant Operations and Maintenance 9,685 69.18 Depreciation of Plant and Equipment 5,000 35.71 Total Drone Production/Assembly Cost 112,871 806.22

Copyright © 2019 GLO-BUS Software, Inc. Page 2

D The Determinators (Industry 46)

AC CAMERAS – MARKET SEGMENT PERFORMANCE Year 5 (practice)

Regular AC Camera Sales Revenue-Cost-Profit Breakdown

Revenues Gross Revenues – Promo Discounts ± Exchange Rate Adj. Net Revenues

Delivery Costs

Shipping Import Duties

Marketing Costs

Retailer Support Advertising Website Expenditures

Production Costs (components / assembly)

Administrative Expenses Operating Profit Operating Profit Margin

North America

$000s $ / Unit

64,125 225.00 -123 -0.43

0 0.00 64,002 224.57 44,738 156.98

1,425 5.00 0 0.00

1,710 6.00 2,500 8.77 1,500 5.26 2,252 7.90 9,877 34.66

15.4%

Europe-Africa

$000s $ / Unit

54,000 225.00 -104 -0.43

0 0.00 53,896 224.57 37,671 156.96

1,200 5.00 2,160 9.00 1,440 6.00 1,400 5.83 1,200 5.00 1,896 7.90 6,929 28.87

12.9%

Asia-Pacific

$000s $ / Unit

41,625 225.00 -80 -0.43

0 0.00 41,545 224.57 29,042 156.98

925 5.00 2,498 13.50 1,110 6.00 1,000 5.41

900 4.86 1,462 7.90 4,608 24.91

11.1%

Latin America

$000s $ / Unit

29,250 225.00 -56 -0.43

0 0.00 29,194 224.57 20,405 156.96

650 5.00 1,755 13.50

780 6.00 750 5.77 600 4.62

1,027 7.90 3,227 24.82

11.1%

Overall

$000s

189,000 -363

0 188,637 131,856

4,200 6,413 5,040 5,650 4,200 6,637

24,641 13%

Unit Demand and Sales

Actual Demand (as determined by competition among rival companies in Y5)

Projected Demand (from decision entries)

Units Gained/Lost (due to stock-outs)

Total Units Assembled and Shipped

Units (000s)

Market Share

285.0 8.3% 285.0 8.3%

0.0 285.0 8.3%

Units (000s)

Market Share

240.0 8.3% 240.0 8.3%

0.0 240.0 8.3%

Units (000s)

Market Share

185.0 8.3% 185.0 8.3%

0.0 185.0 8.3%

Units (000s)

Market Share

130.0 8.3% 130.0 8.3%

0.0 130.0 8.3%

Market Share 8.3% 8.3%

8.3%

Retail Outlets Number of Outlets

Multi-Store Chains Online Retailers Local Retail Shops

Year 5 Year 6

36 36 72 72

3,000 3,000

Year 5 Year 6

30 30 60 60

2,500 2,500

Year 5 Year 6

24 24 48 48

2,000 2,000

Year 5 Year 6

18 18 36 36

1,000 1,000

Number of retail outlets willing to carry the compa- ny's brand of AC cameras.

Special AC Camera Contracts Discount Offer (% off of standard price)

Value Index of Units Offered Units Assembled / Sold (000s)

North America

0.0% No Offer

0 0.0 units

Europe-Africa

0.0% No Offer

0 0.0 units

Asia-Pacific

0.0% No Offer

0 0.0 units

Latin America

0.0% No Offer

0 0.0 units

Overall

0 Offers

Accepted

0.0 units

Incremental Revenues-Costs-Margins Revenues Gross Revenues

± Exchange Rate Adj. Net Revenues

Less: Cost of Components / Features Assembly Labor Costs Allowance for Warranty Repairs Delivery (shipping and import duties)

Contribution Margin

$000s $ / Unit

0 0.00 0 0.00 0 0.00 0 0.00 0 0.00 0 0.00 0 0.00 0 0.00

$000s $ / Unit

0 0.00 0 0.00 0 0.00 0 0.00 0 0.00 0 0.00 0 0.00 0 0.00

$000s $ / Unit

0 0.00 0 0.00 0 0.00 0 0.00 0 0.00 0 0.00 0 0.00 0 0.00

$000s $ / Unit

0 0.00 0 0.00 0 0.00 0 0.00 0 0.00 0 0.00 0 0.00 0 0.00

$000s

0 0 0 0 0 0 0 0

All AC Camera Operations Revenue-Cost-Profit Breakdown

Operating Costs

Production Costs Delivery (shipping / duties) Marketing Costs Administrative Costs

Net Revenues

Operating Profit Operating Profit Margin

North America

$000s

64,002 44,738

1,425 5,710 2,252 9,877

15.4%

Europe-Africa

$000s

53,896 37,671

3,360 4,040 1,896 6,929

12.9%

Asia-Pacific

$000s

41,545 29,042

3,423 3,010 1,462 4,608

11.1%

Latin America

$000s

29,194 20,405

2,405 2,130 1,027 3,227

11.1%

Overall

$000s

188,637 131,856

10,613 14,890

6,637 24,641

13.1%

Warranty Period / Claims / Costs Warranty Period Offered in Year 5 Anticipated Warranty Claim Rate Allowance for Warranty Repairs ($000s) Warranty Repair Cost ($ per unit sold)

60 days 7.0% 1,000 3.51

60 days 7.0% 840 3.50

60 days 7.0% 650 3.51

60 days 7.0% 455 3.50

7.0% 2,945 3.51

Copyright © 2019 GLO-BUS Software, Inc. Page 3

D The Determinators (Industry 46)

UAV DRONES – MARKET SEGMENT PERFORMANCE Year 5 (practice)

Direct Online Sales Revenue-Cost-Profit Breakdown

Revenues Gross Revenues ± Exchange Rate Adj. Net Revenues

Delivery Costs

Shipping Import Duties

Marketing Costs

Website Expenditures Search Engine Advertising

Production Costs (components / assembly)

Administrative Expenses Operating Profit Operating Profit Margin

North America

$000s $ / Unit

41,470 1,100.00 0 0.00

41,470 1,100.00 30,393 806.18

2,262 60.00 0 0.00

1,500 39.79 1,500 39.79

411 10.90 5,404 143.34

13.0%

Europe-Africa

$000s $ / Unit

34,320 1,100.00 0 0.00

34,320 1,100.00 25,141 805.80

1,872 60.00 1,373 44.01 1,200 38.46 1,200 38.46

340 10.90 3,194 102.37

9.3%

Asia-Pacific

$000s $ / Unit

21,315 1,050.00 0 0.00

21,315 1,050.00 16,367 806.26

1,218 60.00 1,279 63.00

900 44.33 600 29.56 222 10.94 729 35.91

3.4%

Latin America

$000s $ / Unit

12,915 1,050.00 0 0.00

12,915 1,050.00 9,931 807.40

738 60.00 775 63.01 600 48.78 300 24.39 135 10.98 436 35.45

3.4%

Overall

$000s

110,020 0

110,020 81,832

6,090 3,427 4,200 3,600 1,108 9,763

8.9%

Direct Online Sales (000s of units) % of Total UAV Drone Unit Sales

38 units 72.5%

31 units 72.5%

20 units 72.5%

12 units 72.5%

101.5 units 72.5%

3rd-Party Online Retailers Revenue-Cost-Profit Breakdown

Revenues Gross Revenues ± Exchange Rate Adj. Net Revenues

Delivery Costs

Shipping Import Duties

Production Costs (components / assembly)

Retailer Recruitment / Support Administrative Expenses Operating Profit Operating Profit Margin

North America

$000s $ / Unit

13,371 935.03 0 0.00

13,371 935.03 11,529 806.22

143 10.00 0 0.00

1,144 80.00 156 10.91 399 27.90

3.0%

Europe-Africa

$000s $ / Unit

11,033 935.00 0 0.00

11,033 935.00 9,518 806.61

118 10.00 441 37.37 944 80.00 129 10.93 -117 -9.92

-1.1%

Asia-Pacific

$000s $ / Unit

6,872 892.47 0 0.00

6,872 892.47 6,208 806.23

77 10.00 412 53.51 616 80.00

84 10.91 -525 -68.18

-7.6%

Latin America

$000s $ / Unit

4,195 892.55 0 0.00

4,195 892.55 3,784 805.11

47 10.00 252 53.62 376 80.00

51 10.85 -315 -67.02

-7.5%

Overall

$000s

35,471 0

35,471 31,039

385 1,105 3,080

420 -558

-1.6%

3rd-Party Sales (000s of units) % of Total UAV Drone Unit Sales

14.3 units 27.5%

11.8 units 27.5%

7.7 units 27.5%

4.7 units 27.5%

38.5 units 27.5%

Retail Outlets Number of 3rd-Party Online Retailers

Year 5 Year 6

36 36

Year 5 Year 6

30 30

Year 5 Year 6

24 24

Year 5 Year 6

18 18

Number of online retailers willing to carry the compa- ny's brand of UAV drones.

All UAV Drone Operations Revenue-Cost-Profit Breakdown

Operating Costs

Production Costs Delivery (shipping / duties) Marketing Costs Administrative Costs

Net Revenues

Operating Profit Operating Profit Margin

North America

$000s

54,841 41,922

2,405 4,144

567 5,803

10.6%

Europe-Africa

$000s

45,353 34,659

3,804 3,344

469 3,077

6.8%

Asia-Pacific

$000s

28,187 22,575

2,986 2,116

306 204

0.7%

Latin America

$000s

17,110 13,715

1,812 1,276

186 121

0.7%

Overall

$000s

145,491 112,871

11,007 10,880

1,528 9,205

6.3%

Unit Demand and Sales

Actual Demand (as determined by competition among rival companies in Y5)

Projected Demand (from decision entries)

Units Gained/Lost (due to stock-outs)

Total Units Assembled and Shipped

Units (000s)

Market Share

52.0 8.3% 52.0 8.3%

0.0 52.0 8.3%

Units (000s)

Market Share

43.0 8.3% 43.0 8.3%

0.0 43.0 8.3%

Units (000s)

Market Share

28.0 8.3% 28.0 8.3%

0.0 28.0 8.3%

Units (000s)

Market Share

17.0 8.3% 17.0 8.3%

0.0 17.0 8.3%

Market Share 8.3% 8.3%

8.3%

Warranty Period / Claims / Costs Warranty Period Offered in Year 5 Anticipated Warranty Claim Rate Allowance for Warranty Repairs ($000s) Warranty Repair Cost ($ per unit sold)

60 days 7.5% 1,170 22.50

60 days 7.5% 960

22.33

60 days 7.5% 630

22.50

60 days 7.5% 390

22.94

7.5% 3,150 22.50

Copyright © 2019 GLO-BUS Software, Inc. Page 4

D The Determinators (Industry 46)

FINANCIAL STATEMENTS Year 5 (practice)

Income Statement ($000)

AC Camera Revenues UAV Drone Revenues Total Revenues¹ Cost of Goods Sold Delivery Costs Marketing Costs Administrative Expenses Operating Profit (Loss)

North America

64,002 54,841

118,843 86,660

3,830 9,854 2,819

15,680

Europe Africa

53,896 45,353 99,249 72,330

7,164 7,384 2,365

10,006

Asia Pacific

41,545 28,187 69,732 51,617

6,409 5,126 1,768 4,812

Latin America

29,194 17,110 46,304 34,120

4,217 3,406 1,213 3,348

Company Total 188,637 145,491 334,128 244,727

21,620 25,770

8,165 33,846

Profitability and Payout Year 4 Year 5 Earnings Per Share $0.65 $0.75 Dividends Per Share $0.00 $0.00

Interest Income (Expense) Other Income (Expense)² Pre-Tax Profit (Loss) Income Taxes³ Net Profit (Loss)

-12,417 0

21,429 6,429

15,000

Notes to Income Statement

¹ Revenues listed here have been ad- justed for promotional discounts and exchange rates. See the Market Seg- ment Performance reports for details on promotional discount and ex- change rate adjustments to revenues.

² Other Income (Expense) will include charitable contributions, instructor- imposed fines (appearing as nega- tive), and instructor-awarded refunds (appearing as positive).

³ The income tax rate is 30%. If a net loss was recorded in Year 4, the loss is carried forward and may offset some or all taxable Year 5 profit and reduce the company's tax liability in Year 5.

Balance Sheet Assets $000s Cash on Hand 5,000 Accounts Receivable (see Note 1) 56,027 Component Inventories (see Note 2) 13,136 Total Current Assets 74,163 Gross Investment in Plant and Equipment 250,000 Less Accumulated Depreciation 47,500 Total Fixed Asset Investment (see Note 3) 202,500 Total Assets 276,663 Liabilities $000s Accounts Payable (see Note 4) 36,125 Overdraft Loan Payable (see Note 5) 0 1-Year Bank Loan Payable (see Note 6) 0 Current Portion of Long-Term Loans (see Note 7) 16,000 Total Current Liabilities 52,125 Long-Term Bank Loans (see Note 8) 110,000 Total Liabilities 162,125 Shareholder Equity Beginning

Balance Change in Year 5 $000s

Common Stock (see Note 9) 10,000 0 10,000 Additional Capital (see Note 10) 80,000 0 80,000 Retained Earnings 9,538 +15,000 24,538 Total Shareholder Equity 99,538 +15,000 114,538 Return on Average Equity (see Note 11) 14.0% Notes to Balance Sheet (all dollar and share figures in thousands)

Note 1: Accounts receivable equals 25% of the camera revenues and 3rd-party drone revenues generated in Year 5 (to be collected in Year 6).

Note 2: A 10% reserve of camera and drone components is kept at all times. Note 3: For more details, see the Assembly and Facility Operations report. Note 4: Accounts payable equals 25% of the cost of camera and drone components

used in Year 5 (to be paid in Year 6). Note 5: Loans for overdrafts carry an interest rate 2% above the 1-year loan rate. Note 6: The company's 1-year bank loan interest rate in Year 5 was 6.0%. Note 7: Principal amount of 5-year and 10-year bank loans due to be paid in Year 6. Note 8: Long-term bank loans outstanding:

Loan No.

Initial Year

Original Principal

Interest

Rate

Term

Out- standing Principal

Annual Principal Payment

Year 6 Interest Payable

1 Y1 60,000 7.5 % 10-Yr 36,000 6,000 2,700 2 Y4 20,000 8.5 % 10-Yr 18,000 2,000 1,530 3 Y4 80,000 8.5 % 10-Yr 72,000 8,000 6,120 4 5 6 7 8 9

10 11 12

Note 9: There are 20,000 shares of stock outstanding at a par value of $0.50 per share. Note 10: Total $ amount above par value that shareholders paid to purchase stock. Note 11: The formula for Return

on Average Equity is: After-Tax Profit

(Beginning Equity + Ending Equity) ÷ 2

Cash Flow Statement Cash Available in Year 5 $000s Beginning Cash Balance (carried over from Year 4) 4,712 Cash Inflows

Receipts from Sales (see Note 1) 332,101 Bank Loan 1-Year 0

5-Year 0 10-Year 0

Stock Issue (0 shares isued @$12.00) 0 Loan to Cover Overdraft 0 Interest on Year 4 Cash Balance 47 Cash Refund (awarded by instructor) 0

Total Cash Available (from all sources) 336,860 Cash Outlays in Year 5 $000s Payments to Component Suppliers (see Note 2) 130,374 Production and Assembly Expenses (see Note 3) 100,863 Delivery, Marketing, and Administrative Expenses 55,555 Capital Outlays New Workstations 0

Robotics Upgrades 0 Facilities Expansion 0 Facilities Improvements (CSRC) 0

Repayment of Bank Loan Principal (see Note 4)

Overdraft Loan 0 1-Year Loan 10,175 5-Year Loan 0 10-Year Loan 16,000

Interest Payments Year 5 Overdraft Loan 0 Bank Loans (1-year, 5-year, 10-year) 12,464

Stock Repurchases (0 shares repurchased @ $12.00) 0 Income Tax Payments 6,429 Dividend Payments to Shareholders 0 Charitable Contributions 0 Cash Fines (assessed by instructor) 0 Total Cash Outlays 331,860 Net Cash Balance ($000s at the end of Year 5) 5,000 Notes to Cash Flow Statement Note 1: Receipts from sales equals all direct-sale drone revenues plus 75% of camera

and 3rd-party drone revenues generated in Year 5. Note 2: Payments to component suppliers equals 75% of the cost of components used

in Year 5 and 25% of the cost of components used in Year 4. Note 3: Production and assembly expenses include all Year 5 production-related ex-

penses except fo

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