Foundations TM Annual Report
Part 1
The Foundations Annual Report must be turned in April 14th. Each team should
briefly review their activities over the eight years that they have managed their
Foundations company. This includes the company’s business plan, strategic decisions,
competitive / market assumptions, tactical decisions, the outcomes of those decisions, and
changes that were necessary to meet competition. Based on this information, each team
will document its Foundations TM experiences in the form of a final year annual report to
the Company's shareholders.
Your Annual Report is not intended to be an academic paper. It should be a professional
and truthful “sell-job” to the stockholders and Board illustrating your management team’s
understanding of the industry and your specific company, the effectiveness of your
decisions, your financial accomplishments with specific emphasis on the final year, and
your company’s positioning for the future.
o Don't be generic!
o What makes your firm unique?
o What were your successes?
o In what fundamental ways did you distinguish yourself from your competitors?
Make sure you provide evidence to support your conclusions and that you integrate the
material from the class discussions in your presentation. The report must be a typed,
single spaced, 10 - 15 page (guideline) document that is spiral-bound with any included
attachments and appendices. You must also submit your report to the Dropbox on
eCollege prior to the beginning of class on the due date. This final written Annual
Report is the basis for your presentation to the stockholders and the Board of Directors
during the last week of class (see Part 2 of the assignment.)
BUSI 20173
Spring 2016
Foundations TM Annual Report
The Annual Report must include, at a minimum:




Cover Page
Table of Contents
Letter to stockholders
Corporate Message. It almost always reflects how a company sees itself, or how
it would like others to see it. Here, the company can explain itself to stockholders,
using photographs, illustrations and text.
o Your company's Vision and Mission statements
o Business Philosophy
 What is important to you in business?
o Describe your industry and markets.
 Was it a growth industry?
 What changes occurred in the industry, short term and long term?
 How was your company poised to take advantage of them?
o Company’s strategic direction
 Summarize your original strategy and compare any emergent
strategies versus the original strategy.
 In a narrative format, evaluate your strategy within the context of
SWOT analysis
o What factors made the company succeed?
 Describe your most important company strengths and core
competencies.

Financial Highlights. These highlights give a quick summary of a company’s
performance. The numbers appear in a short table and usually compare
performance over multiple (3-5) years.
Example from Kellogg 2010 Annual report:
2010
2009
2008
2007
2006
2005
$12,397
$12,575
$12,822
$11,776
$10,907
$10,177
Gross Profit as a % of Net Sales
42.7%
42.9%
41.9%
44.0%
44.2%
44.9%
Operating Profit
$1,990
$2,001
$1,953
$1,868
$1,766
$1,750
3%
$3.32
$3.17
$3.01
$$2.79
$2.53
$2.38
7%
$534
$1,266
$806
$1,031
$957
$769
$47-56
$36-54
$40-59
$49-57
$42-51
Dividends Paid per Share
$1.56
$1.43
$1.30
$1.20
$1.14
$1.06
8%
Earnings per Share (diluted)
$3.30
$3.16
$2.99
$2.76
$2.51
$2.36
7%
30,645
30,949
32,398
26,494
25,856
MILLIONS EXCEPT PER SHARE DATA AND NUMBER
OF EMPLOYEES
Net Sales
Basic per share amount
Cash Flow (net cash provided by
operating activities, reduced by capital
expenditures)
Stock Price Range
Number of Employees
BUSI 20173
5- Year
CAGR
4%
Spring 2016
Foundations TM Annual Report

Management discussion. A series of short, detailed reports that discuss and
analyzes the company’s performance during your last year. It must cover results
of R&D, Production, Marketing, and the adequacy of capital resources (Finance)
to fund operations. Include in these reports your analysis and comparison to your
selected competitors.
o What decisions did you make and why you made them
o How did you implement them
o How successful they were

Financial Statement and notes.
(print your final year of Foundations Annual Reports)
o The SEC requires three statements – statement of earnings, statement of
financial position, and statement of cash flows

Selected Financial Data. This information summarizes a company financial
condition and performance over five years usually accompanied by supporting
charts.
o Select the data for 3 – 4 “key financial objectives / ratios”; these may
include revenue (sales), gross profit, net earnings (net income), earnings
per share, dividends per share, market price per share and key ratios.
o Include a brief narrative for each data set that you select.
Example from Kellogg 2010 Annual report:
Our high quality, delicious foods, loved by
consumers around the world generated net
sales of more than $12 billion in 2010.
BUSI 20173
We maintained operating profit
while continuing to invest in our
business.
Spring 2016
Foundations TM Annual Report
2010 EPS increased 4% over 2009, the 9th
consecutive year of growth.
Total shareowner return on Kellogg shares for 2010
was –1%. Kellogg Company remains a strong longterm investment, with ten-year cumulative annual
return on Kellogg shares of 157% significantly
outperforming both the S&P Packaged Foods Index
80% return and the S&P 500 Index 15% return for the
same period.(d)
Dividends per share have
increased 47% over the past 5
years.
Advertising
investment of more
than $1.1 billion in
2010 continued our
consistent and
strong investment in
building our brands.
Cost-saving and efficiency programs
in 2010 continued to provide
substantial progress toward our goal
of $1 billion in annual cost-savings
by the end of 2011, and we now
expect to exceed this target.
o Using your company’s “key financial objectives / ratios”
 How well did you perform against these objectives
 How did your selected competitors do against these objectives
 What actions did you take to maximize your objectives attainment

The Company’s Future.
o Discuss specifically what your Executive team has done to position your
company for the future.
o Discuss what you are going to accomplish next year as your company
continues to grow and prosper.

Required attachments: (These pages are not included in the 10 – 15 page
guideline)
o Brief Bio for each member of the executive team stating their primary
responsibilities as executives in the simulation company.
o Any addition charts, graphs, etc. to support your written report (do not
include the last FastTrack Report).
Annual Report Expectations:
This assignment must be a typed, single spaced, (10 - 15 page guideline) document that is
spiral-bound with any included attachments and appendices. Grading will include both
objective and subjective components. The objective portion will focus on technical errors
– misspelling, incorrect word choice, structure of sentences and paragraphs, unnecessary
font changes etc. The subjective portion will focus on understanding of the simulation,
clarity of the writing, meeting the needs of the target audiences – Board of Directors and
Stockholders.
BUSI 20173
Spring 2016
Foundations TM Annual Report
Part 2
Stockholders’ Meeting: Your presentation to the members of the Board of Directors will
provide them with the information they need to decide whether to give you a “vote of
confidence” and retain you as a management team, or to replace you with new
management. As such, they have asked you to come before them to discuss four things:
(1) your management team’s overall performance over the past eight years
(2) The company’s financial performance in your final year as shown in your Annual
Report
(3) The company’s performance compared against two of your key competitors (select
two of your major rivals - Baldwin, Chester, Digby, Erie, or Ferris and prepare a
competitor analysis).
(4) what specific steps your management team has taken to position your company for
future success
All presentations must be emailed to j.mathis@tcu.edu before 12:00 p.m. (noon) on
Wednesday, April 20. Failure to do so will result in an 8 point penalty on the team
grade. No changes are allowed to your presentation materials after this time. In
addition, you must schedule a practice presentation with the Professional
Development Center. And since the PDC often suggests changes to the visuals, you
should try to schedule this practice presentation prior to the date that presentation
materials are due, since no changes are allowed after that date.
BUSI 20173
Spring 2016