IVEY Publishing 9B20M125 BIG VIKING GAMES: PILLAGING FOR GROWTH Scott Loveland wrote this case under the supervision of Julie Gosse solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G ON1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com. Our goal is to publish materials of the highest quality; submit any errata to publishcases@ivey.ca. Copyright @ 2020, Ivey Business School Foundation Version: 2021-04-01 In March 2016, Greg Thomson, co-founder and chief product officer at Big Viking Games (BVG), was in his London, Ontario, office developing the company's new strategic direction. Under his leadership, BVG had become the largest independent mobile and social video-game studio in Canada within its first five years of operations. However, this incredible growth had taxed elements of Thomson's personal life and health, and strained his relationship with co-founder Albert Lai. The company had had many previous successes, but Thomson needed a strategy that would ensure continued growth and success. He wondered f the company's future would involve both him and his business partner. Authorized for use only by Yen-Chen Liu in ENTR 3100 at Kwantlen Polytechnic University from 1/5/2023 to 4/26/2023. Use outside these parameters is a copyright violation . GREG THOMSON Thomson grew up in a modest household in North Bay, Ontario, the youngest of three children, behind two older sisters. In his youth, he was often testing out new products at RadioShack, browsing movie rentals, and hanging out at Mcdonald's. When he was 12 years old, he began to teach himself coding and programming, which led to an affinity for numbers and an interest in computer science classes in school. He often dreamt about one day being rich enough to own a jet, buy a castle in France, and tour Mcdonald's locations across the United States In 2001, Thomson moved to London, Ontario, and enrolled in computer science at Western University. In his first semester, he developed a junk mail filter called Inbox Protector, which he marketed and sold online. Within six months, he had sales of CA$80,000 and had decided to drop out of university to pursue this entrepreneurial venture. He experienced moderate success as a serial entrepreneur in the tech sector, creating over 30 apps with 40 million users; he also got married and had a daughter. By 2008, Thomson had launched Tall Tree Games and created a virtual community through his online game, YoVille. The game was a hit, drawing 100,000 users per day, and within a few months, Thomson sold Yo Ville to Zynga for $3 million. At age 27, Thomson decided to retire. 1 Hank Daniszewski, "And You Are?: Virtual Games Deliver Real Success to Online Guru," London Free Press, March 8, 2015 May 11, 2019, https://Ifpress.com/2015/03/08/and-you-are-virtual-games-deliver-real-success-to-online- juru/wcm/cdfe39df-99d0-8eff-9ca4-5c30849c35af. All currency amounts are in CA$ unless otherwise specified.Page 2 B20M125 Page 3 9B20M125 VIDEO-GAME INDUSTRY used, most notably average revenue per daily active user (ARPDAU). This metric was calculated using the evenue from in-app purchases and advertising revenue divided by the number of unique active users on The 2015 global video-game market was valued at US$91.5 billion.' Canada had the third-largest video- that day and was a relatively accurate method of predicting recurring revenue. Customers of freemium game industry by employment, behind only the United States and Japan, with 20,400 employees and 472 games enjoyed the convenience of mobile gaming and tended to purchase additional content either after companies across the country." The video-game software market in Canada was valued at $1.69 billion and investing time playing the game or to progress more quickly through gaming levels. was poised for 10.1 per cent industry growth in 2016, exceeding its 2015 growth rate of 2.3 per cent. Most Canadians preferred home console gaming to personal computer (PC) and mobile gaming (see Exhibit 1). S (BVG) HISTORY Canada was an attractive country for leading global game developers to establish production studios as several provinces heavily subsidized video-game development jobs. The province of Ontario established the Ontario BVG was co-founded in 2011 by Lai and Thomson, with each founder having a 50 per cent ownership Interactive Digital Media Tax Credit (OIDMTC) to attract investment and job growth to its video-game sector. stake in the company. Lai brought considerable start-up experience; Thomson offered up the freemium The OIDMTC allowed companies to offset their labour costs by reimbursing employers 40 per cent of the game- game, Fish World. The two connected out of a mutual desire to produce bold and unique gaming development salaries attributable to a project each year. BVG was a recipient of OIDMTC funds. experiences, and Thomson was convinced to come out of retirement. They agreed that, in order to be successful, they would have to reinvest profits into the company in order to scale and grow quickly. The The video-game software market in the United States was valued at US$16.9 billion and was forecasted to two co-founders decided to set up headquarters in London, Ontario. grow by 11.4 per cent in 2016. Home consoles represented the largest retail market in the country (see Exhibit 2)," and the United States was home to many major game-development companies including BVG experienced considerable growth early, as the freemium game Fish World led the charge with two at Kwantlen Polytechnic University from 1/5/2023 to 4/26/2023. Activision Blizzard Inc., Electronic Arts Inc., Sony Interactive Entertainment Inc., Valve Corporation, and million daily active users. BVG released additional freemium titles-Dark Heroes, Monsters & Dungeons, Microsoft Corporation's Xbox. Most companies operated on the West Coast, where talent in the tech sector and SuperSpin Slots. The company continuously invested in new employees to maintain the growth made was plentiful. The Electronic Entertainment Expo (E3), the video-game industry's premier trade-show necessary by higher traffic volumes (see Exhibit 3). In 2014, BVG successfully reacquired Thomson's old event, was held annually at the Los Angeles Convention Center. creation, YoVille, from Zynga Games, rebranding it as Yo World due to copyright claims. This made BVG the only company in history to successfully buy back a game that had been sold to Zynga and added another Video-Game Classifications successful title to BVG's portfolio. The company was performing well and began to notice a growth in sales (see Exhibits 4-6); one particular customer spent over $25,000 in one month. AAA (pronounced triple-A) was an informal classification used for video games, comparable to the film Authorized for use only by Yen-Chen Liu in ENTR 3100 at Kwantlen Polytechnic University from 1/5/2023 to 4/26/2023. Use outside these parameters is a copyright violation . industry's term blockbuster. Initially, AAA denoted games of a higher quality, usually produced by mid-sized Gaming Style or major publishers that had large development and marketing budgets and catered to a broad customer base. Generally, these games were developed for home consoles and PCs. In addition to this, AAA titles were also BVG focused on HTML5 technologies, releasing several game titles that were played by millions of players described as games with additional revenue generation models. Players provided recurring revenue in addition on iOS, Android, Facebook, and web platforms. Most games focused on social experiences, similar to those o the initial cost of the game through downloadable content (DLC), online passes, or other subscription services. of MMOs; consequently, the company had a loyal fan base that would play its titles for upwards of 10 Customers of AAA games valued the high-quality gaming experience and online features of new releases. years. When releasing new games, the company relied on its fan base to promote new games through word Freemium games operated using a free-to-play pricing model, where customers could play the video games of mouth in online chat rooms and by leaving positive game reviews for free, but they also had the opportunity to make additional in-game purchases through micro-transactions The company operated using a free-to-play pricing model. Releasing the games for free allowed BVG to to obtain additional content. The model was popularized early in massively multiplayer online (MMO) build relationships with customers, which helped cultivate brand loyalty and encouraged customers to try Authorized for use only by Yen-Chen Liu in ENT games, such as Neopets and MapleStory, targeted at casual gamers who valued a sense of the gaming every new release. This product model worked well as BVG had low customer acquisition costs but high community. This model became the standard for most games offered on mobile devices and on Facebook's lifetime value. BVG tracked customer spending using ARPDAU. This metric allowed BVG to accurately gaming platform. An article released by the Washington Post stated that "only 1.5 per cent of 'freemium' forecast future cash flows by tracking the number of players across its platforms and using analytics to players made in-app purchases during January 2014. . .. And 50 per cent of revenues came from just the determine data trends. In 2015, ARPDAU across BVG titles was $0.06. top 10 per cent of payers." The minority of players responsible for most of the revenue were known as "whales." In order for publishers to track spending across the user base, a number of different metrics were Office Locations 3 "Newzoo's Top 100 Countries by 2015 Game Revenues," Newzoo, accessed July 15, 2019, https:/ewzoo.com/insights/articlesewzoos-top-100-countries-by-2015-game-revenues/. London, Ontario 4 Entertainment Software Association of Canada, Essential Facts About the Canadian Video Game Industry, 2015, accessed July 15, 2019, http://theesa.ca/wp-content/uploads/2015/11/ESAC_2015_Booklet_Version02_14_Digital.pdf. London was a city in Southwestern Ontario, Canada, with a population of 383,822. The median age of the 5 "Games Software in Canada (2016)-Market Sizes," Mintel, accessed July 5, 2019, https://store.mintel.com/games-software- in-canada-2016-market-sizes. population was 39.7 years, while the average age was 40.5 years. The unemployment rate was 7.9 per cent, 6"Ontario Interactive Digital Media Tax Credit," Ontario Creates, accessed June 15, 2019, www.ontariocreates.ca/interactive/Tax_Credits/OIDMTC.htm. 7 Mintel Group Lid., "Games Software - US," Mintel Market Sizes, accessed July 5, 2019. Andrea Peterson, "How Two 'Free' Games Made Enough Money to Buy Super Bowl Ads," Washington Post, February 2 2015, accessed July 5, 2019, www.washingtonpost.comews/the-switch/wp/2015/02/02/how-two-free-games-made-enough- money-to-buy-super-bowl-ads/?noredirect=on.HI 4/11 Page 4 B20M125 Page 5 9B20M125 and major sectors of employment were education, healthcare, insurance, and information technology. The over 14 billion hours and watched its video content for 1.5 billion hours. The company prioritized recurring city was also home to Western University and Fanshawe College." revenue streams, often designing new games with "pay-to-win" aspects through micro-transactions, and had a corporate environment that stifled entrepreneurship. On August 28, 2015, the company was added to the Standard & Poor's Financial Services LLC (S&P) 500, and later that year, it was included in the Fortune Toronto, Ontario 100 Best Companies to Work For list. The list of console AAA franchises included Call of Duty (the Toronto was the provincial capital of Ontario; the most populous city in Canada, with 2, 731,571 residents; 10 number-one franchise in North America seven years in a row), Destiny, and Overwatch, while its major PC and the financial capital of Canada, with a high concentration of banks and brokerage firms in the downtown franchises consisted of Diablo, StarCraft, and World of WarCraft (the number-one subscription-based core. Furthermore, after Los Angeles and New York City, Toronto was the third-largest production centre MMO 10 years running). Activision Blizzard's free-to-play titles included Candy Crush, Farm Heroes, and for film and television. " The city had a thriving arts scene and four professional sports teams. Hearthstone, which had more than 450 million monthly active users. 's Zynga, founded in 2007, was a US social game developer operating primarily under the free-to-play model. COMPETITORS The company was headquartered in San Francisco, California, with additional offices in Canada, the United Kingdom, Ireland, and India. In 2015, the company posted revenues of US$764.7 million, had sales and Local Competitors marketing expenditures of US$169.5 million, and had operating losses before taxes of US$130.1 million. Big Blue Bubble Inc., founded in 2004, was an independent Canadian developer and publisher of mobile Zynga's mission statement was "connecting the world through games." Its leading portfolio of social games video games, most notably the freemium franchise My Singing Monsters. In 2006, the company won the included CSR Racing, Words with Friends, Zynga Poker, and Farm Ville, which could be played on Apple iOS, Google Android, Facebook, and Zynga.com. 16 at Kwantlen Polytechnic University from 1/5/2023 to 4/26/2023. editors' choice award in the category of mobile gaming from the US video-game and entertainment website IGN ("Imagine Games Network"). This led to collaborations with world-class brands such as the Walt Disney Company (Disney), Dream Works Animation Company (DreamWorks), the Lego Group Toy Company (Lego), Nickelodeon, and SEGA Games Company Lid. (SEGA). Continued collaborative BIG VIKING GAMES CULTURE a copyright success led the company to begin developing games for home consoles. Its headquarters was in London, Workplace Ontario, and it had a second office in San Francisco, California.2 Digital Extremes, founded in 1993, was another video-game development studio located in London, BVG was a tech company that put an emphasis on employee culture to promote camaraderie and a fun work Authorized for use only by Yen-Chen Liu in ENTR 3100 at Kwantlen Polytechnic University from 1/5/2023 to 4/26/2023. Use outside these parameters is a copyright violation . Ontario, with a second office in Toronto, Ontario. The company's first title, Epic Pinball, became one of atmosphere. The company provided employees with a daily catered lunch, unlimited snacks from the the most successful shareware" games ever made, trailing industry giants Doom, Duke Nukem 3D, and kitchen, free energy drinks, sodas, coffee, and other refreshments. In fact, BVG created its own energy Wolfenstein 3D. Shortly after, Digital Extremes released sequels Silverball and Extreme Pinball, which it drink named Viking Rage, which was a huge hit among employees. To reduce stress in the workplace, the used to fund the creation of the AAA-franchise Epic Games Inc. Titles under this franchise included Unreal, company paid a registered massage therapist to perform sessions in the office every Thursday. To promote Unreal Tournament, and Unreal Championship, which sold more than 12 million units worldwide across engagement between departments, BVG had monthly employee appreciation parties called Viking Feasts the PC and home console platforms. Digital Extremes also completed work on AAA titles Bioshock and where Thomson was regularly seen engaging with employees while wearing a Viking helmet and having a Halo 4, and released Retro Pinball for Apple's iOS platform and Warframe, a free-to-play home console beer. BVG allowed employees to select either London or Toronto as their home office, to best suit their cooperative shooter game." lifestyle needs. New employees were each outfitted with a $700 Herman Miller Aeron chair, a $400 standing desk, and $2,500 in computer equipment to ensure they would be productive at work. Global Competitors Authorized for use only by Yen-Chen Liu in ENT Recruiting Activision Blizzard Inc. was a US video game and film holding company based in Santa Monica, California. In 2015, it had revenues of US$4.6 billion, with an operating margin of 32 per cent, and experienced 20 per BVG was continuously on the hunt for new talent and had to compete directly with tech giants in Silicon cent growth in digital revenues to US$2.6 billion. During that year, people played the company's games for Valley for new recruits. In addition to the workplace culture described above, BVG offered competitive salaries, averaging $70,000 per year per employee, and a comprehensive benefits package, valued at 15 per 9 "Census Profile, 2016 Census: London," Statistics Canada, modified August 9, 2019, accessed May 2, 2019, cent of employee salaries. To ensure BVG could expedite projects for growth at a moment's notice, human www12.statcan.gc.ca/census-recensement/2016/dp- resources (HR) overstaffed projects with new candidates, but this strategy was at the expense of greater pd/prof/details/page.cfm?Lang=E&Geo1=CMACA&Code1=555&Geo2=PR&Code2=35&SearchText=London&SearchType= Begins&SearchPR=01&B1=All&GeoLevel=PR&GeoCode=555&TABID=1&type=0. profitability. A consistent 70/30 staffing split between game developers and back-of-house functions was "Census Profile, 2016 Census: Toronto," Statistics Canada, modified August 9, 2019, accessed May 2, 2019, pparent, and employee turnover averaged 10 per cent per year. Thomson knew that he would have to take www12.statcan.gc.ca/census-recensement/2016/dp- this into account when projecting next year's financial information. pd/prof/details/Page.cfm?Lang=E&Geo1=CSD&Code1=3520005&Geo2=PR&Data=Count&B1=All. 11 City of Toronto Economic Development & Culture, Film and Television Industry: 2011 Year in Review, March 9, 2012, accessed June 27, 2019, www.toronto.ca/legdocs/mmis/2012/ed/byrd/backgroundfile-45805.pdf. 12 "About Us," Big Blue Bubble, accessed August 2, 2019, www.bigbluebubble.com/overview/. 15 Activision Blizzard, 2015 Annual Report, 2016, accessed August 10, 2019, https:/investor.activision.com/static- 13 Shareware games were distributed free to users in limited formats to give users the chance to experience the game before iles/2a43f6cb-a583-4efd-9c7c-4ea1c8a21f6d. purchasing the full version. 16 Zynga Inc., Form 10-K (Annual Report): Filed 02/19/16 for the Period Ending 12/31/15, EDGARpro, accessed Aur-' 4 "Our Company," Digital Extremes, accessed August 2, 2019, www.digitalextremes.com/about. 2019, www.annualreports.com/HostedData/AnnualReportArchive/z/NASDAQ_ZNGA_2015.pdf.Page 6 9320M125 In order to attract new candidates. the HR department was given a budget of 10 per cent ofnew employees' salaries to make an argument compelling enough that candidates would choose BVG over competitors. HR needed to show candidates that winter in London, Ontario, was far better than the sunshine in San Francisco, California. In 2015, BVG was named a Top 100 Employer by the Globe and Mor'l.'7 Work-Life Balance Throughout the development and growth of the company, Thomson did his best to create a workelife balance for himself to avoid being burnt out. He prioritized a scheduled home life with his wife and daughter and made sure he was home by 5:30 pm every night in order to spend time with his daughter before her bedtime. Having that separation allowed him to be focused at work when necessary and leave work stresses at the ofce. In 2015, the work-life balance he had created began to deteriorate Fans from his video games started following him in his personal life and approached him at inappropriate times, such as during meals at restaurants with his family, Thomson began to have safety concerns, and one evening after work, he was followed into a stairwell and harassed for autographs and merchandise while trying to get into his car, Aer that, Thomson had to be escorted through the back entrance at work to prevent other confrontations. In the meantime, Lai had relocated to Toronto and was splitting his time between the London and Toronto ofces. When he was in London, he lived in Thomson's guest bedroomiusually four nights per week. However, Lai did not share Thomson's prioritization of family and often interrupted family time, bringing work issues home and wanting to discuss them with Thomson late into the night. Thomson and Lai had also begun to clash over company philosophy, culture, and strategy. Thomson was content with the company's growth and wanted to continue as a video-game development company. Lai wanted to pivot BVG to focus on pushing its internally developed HTMLs platform as a technology company, As the relationship deteriorated, Lai and Thomson also stopped seeing eye-to-eye on corporate initiatives and culture. These developments added considerable stress to Thomson's life, resulting in health complications. He contemplated his strategy and wondered what BVG's next steps should be; how would he convince Lai that whatever Thomson decided was the right choice? ALTERNATIVES Status Quo The company was performing well, and Thomson wondered whether a change in strategy was even necessary. He estimated that gaming revenue would grow by 20 per cent and F acehook fees would remain consistent at 30 per cent of game revenue. To accommodate this growth, Thomson gured he would need to hire 20 new staffmembers,\" but he expected rent expense to remain the same Thomson knew that, when considering future expenses, it was always best to project them in relation to game revenue. New Game Development Releasing a new game would increase exposure for the company and drive growth. With a one-time marketing budget of3100,000, Thomson would he able to get 100,000 daily active users to play this game with an ARPDAU of $0.12. racebook fees would remain unchanged. In order to build the game, he would W \"Awards: Canadian HR Awards 2015 Nominate Big Viking Games,\" Big Viking Games, September 21, 2015. accessed August 15, 2015, wwwhtgvtktnggamestom/category/awards/page/zt '3 The depreciation expense tor the employees' new chairs, desks. and computers would total $7,000 7373 -o 4,76 7073 vmatcoatm in: Page 7 SBZOM125 require 30 additional staff members and a new office downtown for them to work out of, at a cost of $35 million To accommodate additional web trafc, the company needed to invest $250,000 in server infrastructure arid $500,000 in concept development. Thomson's idea for the new game involved players exploring new planets to identify and collect alien species while also showcasing and trading captured species with other players. The goal was to personally document every species in the galaxy, and the DLC of the game would allow players to travel to new planets. Thomson expected a hurdle rate of 10 per cent for any proposed projects. Marketing Campaign for YoWorId Thomson had always relied on the strong user base to promote existing games, and with along shelfelife for social games, he wondered whether a new marketing campaign at E3 to bring new users to YoWorld would be the right decisions He allocated $100,000 for a marketing budget to buy billboards near the event to promote Ya World, to pay actors to play Yo World characters while handing out game codes during the E3 trade show, and to purchase YouTube ads on videos promoting YoWorld': participation at E3. Thomson expected ARPDAU to remain at 2015 levels before Facehook fees. An increase of 20 per cent in new users in this industry was typical following a successful campaign. Potential Ownership Changes The relationship between Thomson and Lai was deteriorating, and Thomson wondered whether they should continue to work together. He had options; he could perform a company valuation and buy Lai's stake in BVG so he could run the company himself, or he could nd a suitable buyer for his stake in BVG. With historical gaming revenues growing at 41 per cent annually and giving no indication of slowing down, he needed to be sure selling was the right way to extract maximum value for his efforts. He did not like the idea of leaving money on the table, but he cottld not ignore the negative personal impact the current situation was creating DECISION Thomson worked on his analysis and realized he had missed his planned family time. However, he remained optimistic for the future at BVG and knew that the strategic direction he implemented had to he a good t for both his professional life and his family. 5 2023 :0 Me 2023 1 8/11 Page 8 B20M125 Page 9 9B20M125 EXHIBIT 1: GAMES SOFTWARE-CANADA RETAIL MARKET SEGMENTATION BY VALUE EXHIBIT 4: INCOME STATEMENTS (in millions of CA$) For years ending December 31 2014 2015 2015 % 2015 2014 2013 Segment Revenue Home Consoles $1,018.6 $1, 119.0 Gaming Revenue 100.0 $ 15,714,286 $ 11,078,571 $ 7,857, 143 OIDMTC Refund 1,932,00 1,288,000 952,000 PC $287.7 $202.2 Total Revenue $ 17,646,286 $ 12,366,571 $ 8,809, 143 Handheld Consoles $157.5 $159.7 Operating Expenses Mobile $129.4 $149.0 Administrative Expenses J. 15,243 10,746 7,622 Benefits 6.5 1,029,000 682,500 504,000 Total $1,593.2 $1,629.9 Depreciation 2.1 323,665 299,905 237,665 Facebook Fees 30.0 Source: Mintel Group Lid., Games Software in Canada (2016)-Market Sizes, Mintel, accessed July 5, 2019, 4,714,286 3,323,571 2,357,143 https://store.mintel.com/games-software-in-canada-2016-market-sizes. Int & Principal Payments 6.4 1,000,000 1,000,000 1,000,000 Internet 12,500 2,500 0,00 EXHIBIT 2: GAMES SOFTWARE-US RETAIL MARKET SEGMENTATION BY VALUE Marketing Expenses 17 262,435 185,017 131,218 (in millions of US$) Professional Services 1.8 284,364 242,947 197,453 s is a copyright violation. 1.8 2014 2015 Recruiting 280,000 154,000 34,000 Segment Rent-London 13 200,000 132,65 37,984 Home Consoles $6,450 $7,410 Rent-Toronto 0.3 50,000 33, 163 24,490 Authorized for use only by Yen-Chen Liu in ENTR 3100 at Kwantlen Polytechnic University from 1/5/2023 to 4/26/2023. Use outside these parameters is a copyright violation. Authorized for use only by Yen-Chen Liu in ENTR 3100 at Kwantlen Polytechnic University from 1/5/2023 to 4/26/2023. $5,230 $6,020 Salary-Admin and Mgmt 12.9 2,030,000 1,330,000 980,000 Mobile Salary-Game Development 30.7 4,830,000 3,220,000 2,380,000 PC $1,620 $2,770 Server Fees 1. 152,384 132,465 107,430 0.1 12,500 12,50 10,000 Handheld Consoles $770 $650 Telephone Viking Culture 10 152,345 107.403 76,173 Total $14,070 $16,850 Total Operating Expenses $ 15,348,722 $ 10,879,371 $ 8,195, 176 Source: Mintel Group Lid., Games Software in US (2016)-Market Sizes, Mintel, accessed July 5, 2019, Operating Income $ 2,297,564 $ 1,487,200 613,967 https://store.mintel.com/games-software-in-us-2016-market-sizes. Tax 505,464 327,184 135,073 $ EXHIBIT 3: BIG VIKING GAMES EMPLOYEES PER YEAR Net Income after Tax $ 1,792,100 $ 1,160,016 478,894 Notes: OIDMTC = Ontario Interactive Digital Media Tax Credit; Int = interest; admin and mgmt. = administration and Year 2013 2014 2015 management Source: Company files. Number of Employees 48 65 98 Source: Company files.An 10/11 Page 11 9B20M125 Page 10 9B20M125 EXHIBIT 5: BALANCE SHEET EXHIBIT 6: BIG VIKING GAMES-RATIO ANALYSIS er 31, 2015 2015 Assets Liquidity Current Assets Cash and Short-Term Investments 2,654,280 Current Ratio 4.41 Accounts Receivable 1,932,000 Prepaid Expenses 52,343 Acid Test 4.36 Total Current Assets $ 4,638,623 Fixed Assets Efficiency Computer Software 15,525 Office Furniture 07,800 Age of Receivables 32.58 Equipment and Computer Hard 245,000 Total Fixed Assets 368,325 Less: Accumulated De 161,235 Total Net Fixed Assets 207.090 Stability Debt to Equity 3.62 Intangible Assets Software 2,500,000 Interest Coverage 1.79 Less: Accumulated Amortization 900,000 Total Intangible Assets 1,600,000 Source: Company files. Use outside these parameters is a copyright violation. Authorized for use only by Yen-Chen Liu in ENTR 3100 at Kwantlen Polytechnic University from 1/5/2023 to 4/26/2023. Use outside these parameters is a copyright violation. Authorized for use only by Yen-Chen Liu in ENTR 3100 at Kwantlen Polytechnic University from 1/5/2023 to 4/26/2023. Total Assets $ 6,445,713 Liabilities Current Liabilities Accounts Payable $ 51,023 Current Portion of Long-Term Debt 1,000,000 Total Current Liabilities 1,051,023 Long-Term Debt 4,000,000 Total Liabilities $ 5,051,023 Shareholders' Equity Share Capital 498,640 Retained Earnings 896,050 Total Shareholders' Equity 1,394,690 Total Liabilities & Equity $ 6,445,713 Source: Company files.E F G H 2-4 Operations 2-5 Financial 2-6 Leadership 2-7 HR Root Causes Analysis Profitability Ratio(s) Bases of Power Organizational Resilience Root Causes Analysis Horizontal Analysis Level 5 Leadership Retention/Turnover C Root Causes Analysis Turnover Ratio(s) Level 5 Leadership Retention/Turnover Value Chain Analysis Horizontal Analysis Managerial Grid Deal & Kennedy's Culture Types Value Chain Analysis Profitability Ratio(s) Situational Leadership Theory of Needs Value Chain Analysis Earning Ratio(s) Bases of Power Organizational Resilience Value Chain Analysis Liquidity Ratio(s) Bases of Power Organizational Resilience Value Chain Analysis Solvency Ratio(s) Level 5 Leadership Retention/Turnover Value Chain Analysis Turnover Ratio(s) Level 5 Leadership Centralization vs Decentralization Value Chain Analysis Horizontal Analysis Managerial Grid Centralization vs Decentralization + Value Chain Analysis Vertical Analysis Situational Leadership Centralization vs Decentralization Outsourcing Earning Ratio(s) Bases of Power Centralization vs Decentralization Outsourcing Liquidity Ratio(s) Level 5 Leadership Centralization vs Decentralization Root Causes Analysis Solvency Ratio(s) Managerial Grid Retention/Turnover Root Causes Analysis Turnover Ratio(s) Situational Leadership Deal & Kennedy's Culture Types Outsourcing Horizontal Analysis Bases of Power Theory of Needs