2. Executive Management Team
Natalie Taylor
Chief Executive
Officer
Pat Gestring
Chief Financial
Officer
Stephen Swartzendruber
Production & Marketing
Director
3. Vision
Cyclerz is a bicycle manufacturing company that
provides quality bikes at a price everyone can
afford. Each bike is made with the customer’s
safety and satisfaction in mind.
4. Main Goals
Set goals
Create profit
Grow business
Monitor competition
Raise shareholder value
Make decisions & investments
Learn from mistakes & build on progress
5. CEO Report
Overall Pro Forma Units Sold: 360,188
Overall Actual Units Sold: 304,934
Overall Pro Forma Retail Sales: $140,541,074
Overall Actual Retail Sales: $119,506,259
Overall Pro Forma Profit: $38,928,956
Overall Actual Profit: $30,074,657
6. Overall Actual Units Sold: 304,934
0
20
40
60
80
100
120
2015 2016 2017 2018 2019 2020 2021
Thousands
Units Sold
Pro Forma/Actual Comparison
ProForma Actual
7. Overall Actual Retail Sales: $119,506,259
$0
$5
$10
$15
$20
$25
$30
$35
2015 2016 2017 2018 2019 2020 2021
Millions
Sales Revenue
Pro Forma/Actual Comparison
ProForma Actual
8. Overall Actual Profit: $30,074,657
$0
$2
$4
$6
$8
$10
$12
2015 2016 2017 2018 2019 2020 2021
Millions
Profit
Pro Forma/Actual Comparison
ProForma Actual
10. CFO Report – Keys to $$$ Success
Summary:
The goal of any business is to start with a “comfortable”
cash amount on hand and end with a substantial margin of
profit. (See Chart – next slide)
In Rollovers 1 & 2: (2015, 2016) - Start up cash balance
was under $4M
In Rollovers 3 & 4: (2017, 2018) - Cash balance steadily
increased to $6,168,194 with a net income of $2,408,505
after expenses
11. Net Income
Sales Revenue
1
5
25
2015 2016 2017 2018 2019 2020 2021
2 2
2
2
7 7
8
7
9
10
15
22
27 29
Millions
Net Income/Sales Revenue Comparison
Net Income Sales Revenue
12. Financial Decisions – What Went Well?
Production costs were kept at a minimum while reducing
in-stock inventory when Cyclerz began keeping expenses
low
Redevelopment of an existing bike design caused a steady
increase in sales volume beginning in Rollover 3
Managing the number of bikes produced with the number
of bikes sold in Rollover 3 through 6 increased accuracy of
forecasting making it possible to end with a substantial
net margin of profit in Rollover 7
13. Production Director Report
Main Goals:
increase our awareness
Increase our production in order to have
Establish high sales volume
Earn high profits
Main focus:
Increase our name recognition through branding and
advertising
Efficiency improvement
Lowering the cost of goods sold
14. 1
5
25
2015 2016 2017 2018 2019 2020 2021
2 2
2
2
7 7
8
7
9
10
15
22
27 29
Millions
Revenue & Net Income Comparison
Net Income Sales Revenue
21. Secretary’s Report
Items Reviewed for Every Rollover
Overall results from rollover
New product launch options
Support & Branding adjustments
Production, Capacity & Pricing adjustments
Advertising & PR adjustments
Metrics measured
Equity adjustments
22. Lessons Learned
Balance between price, marketing,
distribution, and capacity is essential
Risks are required
Every penny spent needs produce revenue
Reviewing financial statements is key
23. The Good, Bad and Ugly of Teams
Team Dynamic
Natalie – CEO
Preferred to make safer choices and take less risk
Stephen – Production & Marketing Director
Risk taker and knack for looking at potential production and
profit
Pat – CFO
Voice of reason and tie breaker on tough decisions
24. Closing Statement
Working in a small team gave us an opportunity to
coordinate ideas, share experience and maximize on
each of our strengths. We all have different
personalities and viewpoints, so working together
allowed us to develop our people skills and learn to
compromise. Mike’s Bikes gave us hands-on
experience in a manufacturing business environment
that some of us might not have the opportunity to
experience otherwise.
Editor's Notes
Our vision was centered around creating quality bikes at a reasonable price.
We were constantly aware that we had to keep our customers safe and satisfied if we wanted to retain them.
Our main goal was to find balance within all areas and stay competitive with other teams.
We mimicked the teams with higher share holder value to bring our profit closer to theirs, while watching the teams with less share holder value to avoid any choices that might bring us down.
We wanted to invest in marketing, advertising, branding, support and PR, to raise our brand awareness, while maintaining profit. We also wanted to have a good forecast of production so that we had enough product to support potential sales while making sure not to overproduce and cause excessive inventory.
Overall, we learned a lot from the mistakes we made. We also learned how to work as a team and use each of our strengths to our benefit.
For the entire simulation we over estimated our units sold, retail sales, and profit.
We projected over $55 thousand more units than were actually sold.
Our retail sales variance was over $21 million and our profit variance was nearly $9 million.
Although we made significant profit each rollover, we consistently overestimated our potential.
As you can see we overestimated units sold in each rollover. 2017 was our best forecast of the simulation where we forecast only 48 units less than we actually sold.
We also overestimated sales revenue in each rollover except for 2017. That was our best forecast of the simulation where we had $24,180 more in sales revenue than projected.
This graph also shows how sales increased drastically with the introduction of our Youth Bike in 2018.
As expected based on the previous two slides, profit was less than projected.
Again, 2017 was our best year with $7,280 more in profit than expected.
Our shareholder value increase very slightly from rollover 1-4. From the 4th to 5th rollover it nearly doubled and then continued to rise throughout the rest of the simulation.
As we moved into Rollovers 5 & 6, (2019, 2020), we had a net income of $7,238,973 after expenses!
In the final Rollover 7, (2021) Cyclerz had shown a sizeable profit margin gain of 23%, cash on hand of $30,079,721, and a hefty net income at the close of the year of $8,416,133. We continually gained in net income to move to 2nd place!
Net income stayed between 20 & 30% of sales revenue throughout the simulation.
Communication between the CEO, CFO, and Production/Marketing Director kept critical decisions involving advertising, capacity, and PR at an acceptable level reducing wastage and idle time.
Upon introduction of the road bike in 2018, we decided to offer it at a high-end price, but not the most expensive price available to us. Unfortunately, for us, it was not the right price to sell them at, and another team who priced their bikes higher than us sold a lot more. We increased our price to match theirs, but we also lowered our advertising expenditure in 2019 in order to try to get a higher profit. When we did this, it caused our sales to decline and our forecast was less than what we expected. We continued to raise the price in 2020, raised our advertising expenditures up again, and sold what we had in inventory. In 2021, we decided to lower the price to just below the competitor’s price, and increased advertising again. With the combination of those changes we made, we exceeded our planned production and had some lost sales. If we could have produced enough to cover those lost sales, as well as the lost sales in youth bikes, we probably could have made a lot higher profit and taken over first place and won the competition.
We introduced Youth bikes in 2019, when we were cutting back our spending on advertising and branding. We introduced it at a price of $375, which was higher than our competition’s price, which resulted in us not being able to sell as many as what we produced. Another thing that hindered us from selling as much as we could is that we did not plan on producing as many as we were able to sell. We had lost sales of 5,756. During the 2020 rollover, we redeveloped our bikes to decrease the cost, lowered our price, and raised our advertising. We also produced more to be in line with what we expected to sell. With these changes, we saw an increase in our sales. In 2021, we lowered our cost and spent more in advertising again, and we saw another jump in our sales.
When we started going into the road bikes, we increased our capacity so that we could have room to grow and go into the youth bikes when they became available. We went up from 20,000 to 30,000 in 2018, and increased again in 2019, as we had planned to really sell a lot of the youth bikes. When we realized that the youth bikes only took .25 SCU and the mountain bikes only took .5 SCU, we noticed that we had way too much capacity, and that’s why we lowered it back down to 36,000 in 2021. When we did this, it really helped us to have a lot less waste and a lot less idle time.
As you can see, the total amount we spent on advertising had a direct correlation to our product awareness. When we spent a larger amount on advertising, we had a higher product awareness, as it also showed in our sales.
Here is a quick overview of all the items included in the secretary’s report.
We covered marketing, production, and results prior to each rollover.
It takes a balance of all areas to be successful.
Risks are required if you want to grow & develop a business
Every penny spent needs to go towards something that will bring in revenue of at least the amount spent
Reviewing financial statements to understand the implications of our decisions is key
