The Cash Flow Statement examines what happened in the Cash Account during the year. Cash injections appear as positive numbers and cash withdrawals as negative numbers. The Cash Flow Statement is an excellent tool for diagnosing emergency loans. When negative cash flows exceed positives, you are forced to seek emergency funding. For example, if sales are bad and you find yourself carrying an abundance of excess inventory, the report would show the increase in inventory as a huge negative cash flow. Too much unexpected inventory could outstrip your inflows, exhaust your starting cash and force you to beg for money to keep your company afloat.

Cash Flows from Operating Activities:	2027	2026
Net Income (Loss)	$7,143	$4,851
Depreciation	$7,587	$7,587
Extraordinary gains/losses/writeoffs	$0	$0
Accounts Payable	$401	($662)
Inventory	($4,098)	($1,581)
Accounts Receivable	($137)	$1,343
Net cash from operations	$10,895	$11,537
Cash Flows from Investing Activities:
Plant Improvements	$0	$0
Cash Flows from Financing Activities:
Dividends Paid	$0	$0
Sales of Common Stock	$4,000	$7,250
Purchase of Common Stock	$0	$0
Cash from long term debt	$0	$0
Retirement of long term debt	($13,900)	$0
Change in current debt (net)	$13,900	($6,950)
Net cash from financing activities	$4,000	$300
Net change in cash position	$14,895	$11,837
Closing cash position	$73,269	$58,374

Annual Report	Page 1

Annual Report	Digby	C143621	Round: 4 Dec. 31, 2027

2027 Income Statement

(Product Name:)	Daze	Dell	Duck	Dot	Dune	Dixxie	THAT	THAT	2027 Total	Common Size
Sales	$61,045	$9,506	$7,723	$20,199	$5,819	$0	$0	$0	$104,292	100.0%
Variable Costs:
Direct Labor	$20,427	$3,067	$2,045	$6,134	$1,773	$0	$0	$0	$33,446	32.1%
Direct Material	$19,145	$2,172	$2,795	$8,014	$1,959	$0	$0	$0	$34,086	32.7%
Inventory Carry	$682	$0	$0	$0	$0	$0	$0	$0	$682	0.7%
Total Variable	$40,253	$5,239	$4,840	$14,149	$3,732	$0	$0	$0	$68,213	65.4%
Contribution Margin	$20,792	$4,266	$2,883	$6,051	$2,087	$0	$0	$0	$36,079	34.6%
Period Costs:
Depreciation	$2,640	$2,427	$1,080	$720	$720	$0	$0	$0	$7,587	7.3%
SG&A: R&D	$266	$1,000	$1,000	$54	$521	$112	$0	$0	$2,952	2.8%
Promotions	$1,500	$750	$500	$1,500	$250	$0	$0	$0	$4,500	4.3%
Sales	$1,350	$600	$600	$1,200	$250	$0	$0	$0	$4,000	3.8%
Admin	$805	$125	$102	$266	$77	$0	$0	$0	$1,375	1.3%
Total Period	$6,561	$4,902	$3,282	$3,740	$1,817	$112	$0	$0	$20,413	19.6%
Net Margin	$14,232	($636)	($399)	$2,311	$270	($112)	$0	$0	$15,666	15.0%

Definitions:Sales: Unit sales times list price.Direct Labor: Labor costs incurred to produce the product that was sold.Inventory Carry Cost: the cost to carry unsold goods in inventory.Depreciation: Calculated on straight-line 15-year depreciation of plant value.R&D Costs: R&D department expenditures for each product.Admin: Administration overhead is estimated at 1.5% of sales.Promotions: The promotion budget for each product.Sales: The sales force budget for each product.Other: Charges not included in other categories such as Fees, Write Offs, and TQM. The fees include money paid to investment bankers and brokerage firms to issue new stocks or bonds plus consulting fees your instructor might assess. Write-offs include the loss you might experience when you sell capacity or liquidate inventory as the result of eliminating a production line. If the amount appears as a negative amount, then you actually made money on the liquidation of capacity or inventory.EBIT: Earnings Before Interest and Taxes.Short Term Interest: Interest expense based on last year's current debt, including short term debt, long term notes that have become due, and emergency loans.Long Term Interest: Interest paid on outstanding bonds.Taxes: Income tax based upon a 35% tax rate.Profit Sharing: Profits shared with employees under the labor contract.Net Profit: EBIT minus interest, taxes, and profit sharing.

Other	$200	0.2%
EBIT	$15,466	14.8%
Short Term Interest	$1,334	1.3%
LongTerm Interest	$2,919	2.8%
Taxes	$3,924	3.8%
Profit Sharing	$146	0.1%
Net Profit	$7,143	6.8%

 

 At the end of each year of operations, companies prepare a report called Annual Report . This report includes information on the financial condition of the company, including achievements as well as problem areas of the company. Annual reports are prepared by the company's management and are addressed to the Board of Directors, shareholders, employees, clients and others interested in knowing the financial and operational results of the company. In particular, this report is very important for investors, because they can obtain immediate information to determine whether or not to continue providing capital for the company. It is very common to see in these reports that updated information is disclosed about the company's progress and its future prospects.

As a final requirement of this course, each work group will prepare an Annual Report using the information obtained from round 1 (module 3) to round 4 (module 6) of the simulator.

The report must include:

1. A cover with the name of the company, its members and the title "Annual Report . "
2. A page with the executive summary written in the form of a message (letter) addressed to the Board of Directors, shareholders, employees and clients of the company. In this letter, you, as the company's management group, will highlight the main financial and operational achievements obtained at the end of year number four compared to the position found at the beginning of operations in round 0.
3. A page where they identify which of the six basic strategies was chosen by the group at the beginning of the simulation and any variations made throughout the next rounds. They must also explain whether or not this strategy helped them gain a competitive advantage in the business simulation, and whether the competitive advantage was temporary or sustainable throughout the years and why.
4. An analysis of the performance of each functional area - R&D , marketing, production and finance - of the company in its round 0 (how the company was found) compared to an analysis of the company's performance in its round 4 (financial and operational position at the end). simulation).
   1. For the marketing area , an analysis of market share, prices and investment in promotion should be included . In this evaluation they must integrate a comparative analysis with other competitors within the industry. In addition, they must use graphs, diagrams and other visual elements that present the analysis of the results obtained by their company and the comparative analysis with the industry throughout the four years of the simulation.
5. At the end of the report, each group member must include a reflection on their individual and group experience during the simulation. How did this experience help you better understand the management work that a company manager does?