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CAPSIM - Baldwin sensors presentation, Lalit Ganapathy


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CAPSIM - Winner Presentation (An example of utter dominance)

Here is the presentation of my CAPSIM simulation team (Team Baldwin), in which we mercilessly destroyed, decimated, and demoralized our competitors into oblivion!

Not hard to do, since they were incompetent, but it was fun!

Nothing personal, chumps!


-Lalit Ganapathy, CEO Baldwin Sensors

Published in: Business, Economy & Finance
  • slide 9 i mean
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  • @LalitGanapathy How did you calculate the market share averages or the averages in general. By ending did you mean you just did the last round?
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  • @enallst - XBRL or Extensible Business Reporting Language is basically just a fancy spreadsheet whose syntax is oriented towards content/information. The costing taxonomy comprises metadata through 'instances' comprising values ('facts') that comprehend units and contexts. Go to the marketing spreadsheet under proforma in Capsim, and try out different values under spends and penetration to see how it impacts the Balance Sheet, Cash Flow Statements, and the Income Statement. Note to others: Thanks for your interest in the presentation, guys. I will not be responding to questions individually any more on this site, since I visit it infrequently, and also because I believe most issues have adequately been dealt with in the slides and questions and answers below. Thanks and good luck!
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  • @mureese Please refer to earlier responses below for insights on strategy. Sorry for the delayed response - have been busy. Thanks.
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  • What did you mean exactly when you typed 'Forecast 5% below pro-forma XBRL in the beginning, and 10% above in the end?' Which figure is the pro-forma XBRL exactly?
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CAPSIM - Baldwin sensors presentation, Lalit Ganapathy

  1. 1. Baldwin Sensors<br /> Annual Shareholder Meeting – 2018 Audited Results<br /> Baldwin – We build sensors for business success<br />Accounting 491: Accounting Research and Analysis LalitGanapathy, MSRE, MSAcct<br />
  2. 2. Message from the CEOCreating Wealth<br />At Baldwin we strive to create and maximize shareholder value. The shareholder is king in Baldwin’s corporate ethos, and we make no apologies for this old-fashioned business ethic. You as stockholder have reposed trust in us, and invested with us. We regard it our solemn responsibility to vindicate that trust by building the best possible sensors and rewarding you as shareholder.<br /> Your company is pleased to announce an extraordinary dividend of one dollar for 2018. Had you invested in our 2011 IPO at $33.25, you would have seen your investment grow by 434% over eight years, notwithstanding a challenging economy. We at Baldwin value your relationship with us, and look forward to creating more wealth from the exciting opportunities that lie ahead.<br />LalitGanapathy, CEO, Baldwin Sensors<br />
  3. 3. Baldwin’s Core Values<br />
  4. 4. Overall Strategy<br />Borrow heavily in the early years, and increase capacities<br />Automation levels of 7.5 to 8 in all lines<br />Concentrate on Traditional and Low Segments by positioning multiple lines in the early years<br />Avoid emergency loans<br />Nibble away with low cost products and low marketing spends in High, Size, and Performance segments<br />Keep prices competitive – sell less by all means, but at higher margins<br />
  5. 5. Baldwin Operations Workflow - PERT<br />Price Products and <br />Forecast<br />Establish Marketing<br />Spends based on <br />Line Penetration,<br />And Competitors<br />Product Positioning <br />and Project <br />Completion Dates, <br />and Differentiation<br />Address Financing,<br />Funding for Capex,<br />Stock vs Debt, Op. &<br />Net Income, Ratios,<br />and Stock Price<br />Determine future <br />capacities and <br />Automation Levels<br />and related spends<br />Calculate TQM & HR<br />Cost-Benefit Analysis<br />through Pro-forma<br />
  6. 6. Baldwin is pleased to announce an ending stock price of $148.79<br />Recessionary Period<br />(Note: Years 2015 and 2016 witnessed an economic downturn, and market sizes shrank by 7-8% across all segments. Baldwin successfully weathered the two recessionary years.)<br />
  7. 7. Baldwin Sensors – Financial Snapshot<br />(Note: Cumulative Profits figures are from Capstone Courier, and not debrief reports)<br />
  8. 8. Baldwin Sensors: Sales, Net Income, Cumulative Profits<br />
  9. 9. Market Share by company (average)<br />Baldwin<br /> 22.81%<br />
  10. 10. Contribution Margins by company <br />(Note: At no point did Baldwin operate at Contribution Margins below 30%)<br />
  11. 11. Cumulative Profits by company<br />(The cumulative profits chart most closely mirrors the stock price chart)<br />
  12. 12. Stock Price most closely reflects Cumulative Profits!<br />
  13. 13. YOU LOST!!<br />
  14. 14. Net Profit Breakdown by Company (Round 8)<br />Baldwin sensors :<br />Net Profit : $32.436 million <br />Sales : $216.038 million<br />Net Profit Margin : 15% <br />(Baldwin had the lowest relative variable costs:<br />$135.867 million)<br />Net Profit Margin<br />By Company<br />Andrews 8.92% <br />Baldwin 15.01%<br />Chester 7.08%<br />Digby 0.71%<br />Erie 7.41%<br />
  15. 15. Baldwin SensorsBalance Sheet as at Dec 31, 2018 (in ,000’s)<br />
  16. 16. Baldwin SensorsIncome Statement for year ended Dec 31, 2018 (in ,000’s)<br />Note: Common Stock Shares Outstanding: 2,297,296<br /> Earnings Per Share 2018: $14.12<br />
  17. 17. Baldwin Sensors – Statement of Cash Flows for year ended Dec 31, 2018 (in ,000’s)<br />
  18. 18. Baldwin Sensors is proud to announce to its shareholders that we are a Zero-debt company as on Dec 31, 2018.<br />Baldwin also has the lowest number of shares outstanding relative to our<br />competitors, at slightly under 2.3 million shares in common stock<br />
  19. 19. Analyst Report<br />Baldwin Sensors is pleased to announce to its shareholders that we continue to remain a favorite with the investment analyst community, scoring a total of 5327 cumulative points<br />
  20. 20. CAPSIM stars<br />Final tally of stars awarded to Baldwin: 31<br />
  21. 21. How green are we?<br />Baldwin Sensors cares for our planet, and is committed to pursuing sustainable, ecologically responsible, and environmentally friendly business practices. <br />Baldwin’s total environmental spend over 8 years: $3.2 million<br />
  22. 22. Recession Strategy<br />Invest heavily in TQM and HR to leverage cost advantages in the final years<br />Increase automation in precisely those years that competitors will not spend<br />Sell off capacities in lines with excess inventory<br />Completely exit those lines and segments with contribution margins below 30%<br />Mark down excess inventory in unprofitable lines by 15-20%, with zero R/D and Marketing spends <br />
  23. 23. Drift, Capacity Forecasts, & Recession Challenges<br />
  24. 24. Drift, Capacity Forecasts, & Recession Challenges (contd.)<br />Recession<br />Impact: Sell off built-up capacities in Blaze line in Round 7 (900 units), reduce capacity in Baker in Traditional, by 1200, and also completely exit Performance and Size categories by Round 7<br />-7.2% +0.2% +5.8% +9.4%<br />
  25. 25. Drift, Capacity Forecasts, & Recession Challenges (contd.)<br />Impact: Avoid increasing<br />Capacities in Bead and<br />Brawn in the Low-end<br />Segment in the recession<br />Rounds, 2015-2016<br />-7.4% -0.1% +4.6% +12.5%<br />
  26. 26. Traditional Segment Snapshot (Round 8)<br />Total units sales was 4611 units for Traditional Segment in Round 8 <br />
  27. 27. Traditional Segment Performance Chart<br />Note: Baker was a Traditional Product in all 8 Rounds; Bid and Bright drifted <br />from High to Traditional in Rounds 4 and 6 respectively. <br />Brawn drifted out of Traditional to Low in Round 5 (2015)<br />
  28. 28. Low Segment Snapshot (Round 8)<br />Total units sales was 5743 units for Low-end Segment in Round 8 <br />
  29. 29. Low End Segment Performance Chart<br />Note: Bead was our star performer in the Low category, selling a total of 15,662 units in all 8 rounds.<br />Brawn drifted out of Traditional to Low in Round 5 (2015)<br />
  30. 30. Baldwin Product Line in Round 8<br />
  31. 31. The Team<br />
  32. 32. Research and Development<br /><ul><li>Keep RD spends in each line to under 1.2 million; total RD spend between 4-5 million
  33. 33. Ensure project engineering is completed by Dec 31 of each year
  34. 34. Position new products every year for first five years in Traditional and High Segments, to allow drift into Low and Traditional respectively, with appropriate age
  35. 35. Position multiple products within a segment, while ensuring against product cannibalism
  36. 36. Manipulate MTBF to suit the role of the line; if competitive, maximize – if not, minimize to reduce product costs
  37. 37. Balance product positioning against costs and margins</li></ul>LalitGanapathy<br />CEO, Baldwin<br />R&D <br />
  38. 38. Finance<br /><ul><li>Take out maximum debt possible in the earlier rounds at low interest rates
  39. 39. Avoid current debt, scrupulously avoid Emergency Loans, and budget for surplus year-end cash accordingly
  40. 40. Keep Accounts Receivable cycle at 60 days in the first couple years, and bring it back to 30 days in the final rounds to pay off all outstanding long term debt and be a zero-debt company
  41. 41. Issue stock instead of debt when stock price reaches attractive levels in the middle rounds to finance Capex, and buyback stock when the price declines to keep a low equity base and correspondingly high EPS</li></ul>ShakirCurrimbhoy<br /> Chief Financial Officer<br />
  42. 42. Production<br /><ul><li>Increase capacities to maximum permissible levels in the early rounds
  43. 43. Invest heavily in automation from the first round onwards, and aim for automation levels of 7.5-8 in all lines by Round 8
  44. 44. Produce at approximately 10% below forecast in the early rounds, and 30% above forecasts in the final rounds
  45. 45. Produce at 200% capacity in the final round, (Round 8)
  46. 46. Eliminate capacities in lines with excess inventory – if necessary, get rid of the line(s) itself
  47. 47. Never liquidate – keep 1 unit capacity, and sell off inventory at 15-20% markdown
  48. 48. Strike a correct balance between 2nd shift and overtime per pro-forma calculations; sometimes overtime will be more profitable than running a 2nd shift on a low complement increase. </li></ul>Liqin Mao<br />Sr. Vice President, <br />Production<br />
  49. 49. Human Resources, Labor, and TQM<br /><ul><li>Invest primarily in those TQM initiatives that reduce material and labor cost; strive for between 20-25% reduction in material and labor cost – actual reduction was 13.58% in labor and 9.88% in material (totaling 23.46%, exploited in final rounds)
  50. 50. Admin cost reduction of 43.13%, and low recruiting and admin costs
  51. 51. Lowest needed complement at 794 employees
  52. 52. Employee Productivity Index of 103%
  53. 53. Always perform pro-forma cost-benefit analysis for HR and TQM spends, especially relative to competitors
  54. 54. Spend heavily on TQM and HR in recession rounds, even at the risk of showing a yearly loss, since competition will be reluctant to invest in a downturn.</li></ul>Ryan Smith<br />Sr. Vice President,<br />Human Resources<br />
  55. 55. Marketing and Promotion<br /><ul><li>Aim for 100% awareness and accessibility in Traditional and Low Segments from Round 1 onwards
  56. 56. Forecast 5% below pro-forma XBRL in the beginning, and 10% above in the end
  57. 57. Maximize promotion and sales spends at 1.5 and 3 million for critical lines, and gradually scale back in later rounds, after (near)100% awareness and accessibility have been achieved
  58. 58. Spend 4.5 million, then scale back to 3.3 million on sales and accessibility in the final rounds to leverage maximum benefits and synergies from multiple product differentiation between several lines within a segment
  59. 59. Price realistically, yet competitively to achieve contribution margins above 30%. Resist the urge to undercut competitors and price products low, when market demand will not be impacted by it.</li></ul>LalitGanapathy<br />Baldwin CEO, <br />(with additional control over<br />Marketing & Pricing)<br />
  60. 60. CAPSIM DECIMATION It’s about the money, stupid!<br />
  61. 61. Baldwin Sensors<br /> Annual Shareholder Meeting – 2018 Audited Results<br /> Baldwin – We build sensors for business success<br />
  62. 62. Dedicated to my father,the late R. Ganapathy,(1937-2009) (MA Mathematics, MA Statistics, MA Economics)(CEO of CEOs)<br />Executive Director (Retd.) – Minerals and Metals Trading Corporation of India <br />(A Govt. of India Enterprise)<br />Managing Director (Retd.) – <br />Tower Galvanized Products, and <br />Tower Aluminium (Nigeria)<br />Mathematician, Economist, Statistician, Sanskrit Scholar, Writer, Investor, Musician, Philanthropist, devoted Husband, and loving Father<br />