Answer question below using data provided:

1. What key concept or technique from the week's readings and/or discussion were utilized in the quarter's decisions?

1. Using the Pre-Tax Net Income (Plan vs Actual + SRO) Walk Chart, identify three variances and explain the key drivers. Provide data to support explanations.

1. Using the Cash Flow Walk Chart, identify three large sources/uses of cash and explain the key drivers. Provide data to support explanations.

1. What were the two most difficult decisions?

1. Role Play: Considering the role plays in Q2, explain one piece of qualitative information collected, and one specific financial negotiations made (or rejected). How did they impact the business?

Suggestion for Q2 Decisions

When you receive your Q1 outputs (which will be within a minute of submitting the Q1 decisions and annual plan), you will need to complete the Quarterly Business Review (QBR) found in the "Executive Summary" tab of "Quarterly Decisions." You should review any new emails, and the "Business Intelligence Dashboard" - if you ordered it - found in the "Quarterly Dashboard." The "Business Intelligence Dashboard" contains significant data analytics in comparison to your competitors. It will become increasingly critical over time as you observe the trends in your competitors' behaviors relative to your own.

The "Variance to SRO" within the "Quarterly Decisions" is essential to analyze for your variances to plan. You will need this insight to finish the "Executive Summary." You should also look at the graphs of variance to plan and cash flow (the so-called variance walks, floating bars, or bridge charts). You can find an overview in TRI Critical Equation #2 in "Help." You should spend time understanding these practical and real world graphics.

When you have completed the "Executive Summary", you check the box and Submit at the lower right. This QBR will be saved in the "Executive Summary" and you will be redirected to "Quarterly Decisions" to modify your SRO for Quarter 2.

As you start Quarter 2, again review "Internal Emails and Industry News" in "Inbox" and the data found in "Financial Statements," "Supply Chain Mgt," and "R&D." Carefully consider your role play for the quarter. Ask: are you ensuring you will not become a technological laggard in the longer term for some short-term success? As in Quarter 1, look at the "Market Forecast" Graphic in "Quarterly Decisions." Your estimate of "Units Sold" in Decisions is driven by your share assumption. The market forecast changes over time as the dynamics of the industry evolve.

Your Net Income commitment for the year and where you are (which should have been discussed in the QBR), can easily be seen in the center of "Quarterly Decisions." You will see the original commitment, as well as what is referred to as "Actual + SRO". "Actual + SRO" represents what your net income would be if you hit Quarters 2, 3 and 4 exactly as planned seen in the input area (Quarterly Decisions), plus the actual for Quarter 1. This section should be checked carefully every quarter.

As before, you can model your plan (entitled Model Your SRO) at the bottom of the "Quarterly Decisions" as often as you like, and you will see any constraints after modeling your plan (e.g., not enough raw material) as well as the revised plan for the year. Anything can be changed in Quarters 2, 3 and 4 Quarterly Decisions. When you have finalized this quarter's decisions, "Check here then click the below button to submit your SRO" found at the bottom of the decisions. This will submit your Q2 decisions for competitive interaction.

Ferris Futrell (Finance Manager)

Cost-Saving Opportunity!

I just got off the phone with our building owner. We've got a great opportunity to invest in some new solar panels that will help curb our utility costs. The panels will cost $150,000.

Initial analysis indicates that electricity usage of between 15% and 20% per quarter could be saved.

Not only will we be able to save on electricity consumption, but the building owner can sell the excess energy back to the grid. He has agreed to reduce our quarterly utilities expense rate by 20% if we purchase the panels. Given these cost savings, I think Mr. Sloane will agree to invest in the panels in exchange for Common Stocknot to mention the positive impact on the environment. If Mr. Sloane invests in the solar panels themselves, that means that we will not have to pay for them out of our budget. In addition, we'll be able to depreciate the equipment! The solar panel company could install the panels within a week, and we should see the savings start this quarter. From a depreciation perspective, the panels depreciate on a straight-line basis over three years.

You should seriously consider calling Mr. Sloane as soon as possible and asking him if he will fund these improvements. Buying these solar panels would do nothing but benefit both Hisco and the planet.

Q2'25 Role Play

- Iona Lines: Enhance throughput: 375 per line at $50,000 upgrading fee for 10 existing lines

- Stan Sloane: Solar Panels Purchased: $150,000 cash for new solar panels

Victoria Cash

Hello. you've reached Victoria. With whom do I have pleasure of speaking?

Hi, it's , CEO of Hisco. Hisco is growing faster than we expected, and we're constrained on cash right now. The reader market is booming and we really need more capital to be able to become the market leader. Would you consider investing in Hisco?

First off, congratulations on your performance to date! After discussing Hisco with my board, I would consider investing $150,000 for 10.0% ownership stake of Hisco. What do you think?

10.0% ownership stake is too high for me right now. I would like to give up less ownership. How about $135k for 7.5% ownership?

Our growth plan requires a little more funding right now. If you're interested, I prefer to give up more ownership for more cash. How about for ownership?

That's just what we were hoping for! I will accept that offer.

Declined Offer

BREAKTHROUGH 1 ANNOUNCEMENT

Our new assembly designs are ready. They will be implemented as soon as you give the go ahead. As we estimated before, our labor content will go down by 25%. Additional improvements may be possible in reducing scrap and hazardous waste generation, but these have not been quantified yet. This should enable us to cut our price and sweep the market.