Verbal Report by Teams 6 & 1
And
The Performance Scorecard
&
Demystifying Financial Reports
Chapters 10 & 11
What is The Performance Scorecard?
It is an analysis system & set of tools that enables
a comprehensive analysis of publicly traded
corporations including their financial statements.
 It helps you collect and organizing key
Performance data
 Guides in the evaluation and scoring of
performance data
 Systematizes & categorizes performance data
for presentations purposes.
PSC

Copyright protected… ©
The PSC software is a copyright protected financial and
general analysis program designed to accompany the
“Management Strategy & Performance” textbook. It is a
powerful and versatile tool written as a template in Microsoft
Excel. It will provide you with an automatic ratio analysis,
informative bar charts, and performance statistics – both
financial and non-financial. It will guide you in developing a
platform for comparing competing companies of different sizes.
Predictive ratios and comparisons will be highlighted.
Each critical cell contains a detailed explanation of the
relevance of that item and supplemental information about its
significance in performance measurements.
Getting started with using the PSC…
Enter the financial data from your benchmark & target’s
annual reports into the PSC template.
Caution: The categories on the annual reports will not line up
perfectly with the categories on your PSC. You will need to
combine, reorganize, and reclassify data from the annual
report so that it will fit into the PSC.
Don’t let the need to combine, reorganize, and
reclassify bug you. If you have difficulty:
1st Ask your team for help
2nd Ask your Professor for help
As you enter the financial data from the annual reports of
your selected companies, the PSC will automatically “commonsize” the information.
The result will be several columns of percentages. The
percentages will be the basis for comparing the performance of
the target to the benchmark.
Remember: You will be comparing “percentages” NOT
ABSOLUTE CURRENCIES (dollars, yen, euro, etc.)
Your “PSC” has a red triangle in the upper right hand
corner of many data cells. If you hold the cursor on any one of the
triangles it will provide you with the meaning, essence, and
relevance of that particular measurement.
You will also notice that there are certain cells with
Yellow shading.. These are the only cells that require your input.
DANGER!! If you skip the following steps – you will suffer!
BALANCE SHEET: FIRST – Find the “total assets” on your
selected company’s statement and type that number into the
total assets cell of your PSC template. Next transfer all the
assets from the selected company’s balance sheet to the PSC,
followed by liabilities and lastly the equity.
See p. 343 of textbook
INCOME STATEMENT: FIRST – Find the revenue on your
selected company’s statement and record this in the PSC.
SECOND Find the net income on the company’s statement
and record it in the PSC. Then you may transfer the remaining
items from the company’s income statement to the PSC.
See p. 343 of textbook
Your PSC template is a tool and like any
other tool, it may be easier to use on some jobs
(or companies) than others.
.
Your PSC template is generic in nature and
broadly structured to fit most companies. Some
financial statements will match categories easily
while others will require significant data
reclassification.
Project Demonstrating Excellence (PDE)
The PSC analysis software is a primary tool for
completing your PDE (semester project)
(Project Demonstrating Excellence).
The PSC will automatically produce statistical analyses
and create an array of bar charts that will assist in performance
interpretation and help you to “spice up” the appearance of your
(Project Demonstrating Excellence). PDE
You can paste the charts into your to create a more
visually interesting and decision informative report.
The PSC is divided into five (5) distinct industries, each
with a different analysis template. It is important that you
select the template that most closely matches the industry in
which your target company competes.
Remember, regardless of the template you select, you
WILL have to reorganize some of the data from your target
company’s annual report so that it fits into the PSC.
The five divisions are:
(1) “GP1” merchandisers, manufacturers, & restaurants
(2) “GP2” conglomerates
(3) “S” service type organizations
(4) “B” banking corporations
(5) “I” financial services
 The “GP1” is for manufacturers, merchandisers, AND
restaurants. Examples of companies using the “GP1”
include: Wal-Mart, Coca Cola, Exxon, Marriott,
McDonalds, Domino’s Pizza, Inc. Chipotle Mexican
Grill, Inc., Krispy Kreme Doughnuts, Inc., etc.
The “GP2” PSC is specifically for conglomerates such as the
GE, Siemens AG, Koninklijke Philips Electronics, ABB,
Ltd, etc.
 The “S” is for service businesses such as FedEx, WellPoint,
Southwest airlines, etc. (For most hotels use “S” unless they
report a gross profit – then use GP1)
 The “B” is for basic banks such as M & T Bank, KeyCorp,
JP Morgan etc.
 The “I” is for financial institutions that are involved in more
than just basic banking such as Morgan Stanley,
Goldman Sachs, Deutsche Bank AG, etc.
The analysis template will guide the data
entry. The cells containing a yellow tint are
input cells and these will turn white once the
data has been entered.
Cells without a yellow tint will not accept data.
The PSC is password protected so that
you cannot inadvertently damage cells. If you
try to enter data and get a password warning,
simply move to the next cell.
There are several sources that you will need
to access for INPUT data but the annual report
of your target company will be the primary
source. Other sources may include online
financial websites and/or financial periodicals
and newspapers.
When recording data to the PSC, try to do
so in millions or thousands. That means
omitting zeros whenever possible. It means –
rounding off numbers. BE SURE TO BE
CONSISTENT IN YOUR ROUNDING!
Never record cents (pennies) to the PSC!
Additional required information:
1) Basic EPS (Earnings Per Share)
2) Diluted EPS
3) Share Price (Market value of each share as
of the date of the annual report)
4) Dividends per common share
5) Beta
You may not use a company that
has a deficit.
PDEs with deficits will be
graded as “zero.”
After you have recorded the raw data in the
PSC, charts and graphs will be automatically
generated. These should be analyzed.
In order to enhance your understanding of
the results, it is strongly advised that you
carefully study Chapter 12: “Measurements &
Meanings” because it will provide you with a
deeper insight to the components, meaning, and
essence of the individual ratios.
Once you have completed all sections of the Performance
Scorecard, print ALL tabs except the welcome page and any tab
that actually says: DO NOT PRINT).
Then you can begin writing the financial piece of your PDE
Project Demonstrating Excellence.
Remember: Every tab from your PSC must be printed and
included as an appendix to your PDE.
You must also include a copy of the (1) Balance Sheet, (2) Income
Statement, and (3) Statement of Cash Flows from your target
AND your benchmark companies. Yes, that means you are
including a copy directly from your target & benchmark firms!
If you do not include the items listed above, your grade
will be significantly reduced.
Read Chapters 12 “Measurements & Meanings”
And Chapter 13 “Scoring Performance”