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Projected Year 11 Performance 

Investor Change
Scoring Measures Year 11 Expectation Other Measures Year 11 from Y10
EPS (earnings per share) $2.64 $2.50 Net Revenues ($000s) 531,985 +23.0%
ROE (return on equity) 22.9% 21.0%
Net Profit ($000s) 52,569 +31.4%
Credit Rating A B+
Image Rating 83 70 Ending Cash ($000s) 6,238 +164

North America Europe-Africa Asia-Pacific Latin America

W C T Facility Facility Facility Facility
Industry Company Industry Company Industry Company Industry Company
Prior-Year Compensation and Productivity Data Average I Average I Average I Average I
Workforce Base Wages 34,000 34,000 20,400 0 12,000 12,000 12,000 0
Compensation Incentive Pay 4,650 4,650 2,790 0 1,573 1,573 1,574 0
(toal $ per year)
Fringe Benefits 3,007 3,007 1,800 0 1,536 1,536 1,500 0
Total Regular Compensation 41,657 41,657 24,990 0 15,109 15,109 15,074 0
Overtime Pay (included incentives) 6,443 6,443 0 0 3,391 3,391 0 0
Total Compensation 48,100 48,100 24,990 0 18,500 18,500 15,074 0
Incentive Pay as a % of Regular Compensation 11.2% 11.2% 11.2% 0.0% 10.4% 10.4% 10.4% 0.0%
Workforce Productivity (pairs per worker per year) 5,000 5,000 3,500 0 3,500 3,500 3,500 0
Minimum Wage = 34,000 Minimum Wage = 20,400 Minimum Wage = 12,000 Minimum Wage = 12,000
Compensation Base Wage (% change from prior year) +1% 34,340 0% 0 +1% 12,120 0% 0
and Training Incentive Pay ($ per non-rejected pair) $ 1.00 4,858 $ 0.00 0 $ 0.50 1,662 $ 0.00 0
of Production Fringe Benefits ($ per year) $ 3000 3,007 $ 0 0 $ 1500 1,536 $ 0 0
Workers
Total Regular Compensation ($ per year) 42,205 0 15,318 0
Overtime Pay (includes incentives) 2,827 0 2,069 0
Total Compensation ($ per year) 45,032 0 17,387 0
Incentive Pay as % of Regular Comp. 11.5% 0.0% 10.8% 0.0%
Best Practices Training ($ per worker) $ 3500 per worker $ 0 per worker $ 3250 per worker $ 0 per worker
Materials Cost Impact (from cumulative
BP expenditures) Std -0.05 Sup -0.10 Std 0.00 Sup 0.00 Std -0.05 Sup -0.10 Std 0.00 Sup 0.00

Supervisory Staff (ratio of production workers to supervisors) 50 to 1 Staff = 17 0 to 1 Staff = 0 50 to 1 Staff = 24 0 to 1 Staff = 0
Ind. Avg. Co. I Ind. Avg. Co. I Ind. Avg. Co. I Ind. Avg. Co. I
Prior-Year Supervisory Compensation ($/year/supervisor) 60,000 60,000 36,000 0 25,000 25,000 25,000 0
Minimum Salary = 60,000 Minimum Salary = 36,000 Minimum Salary = 25,000 Minimum Salary = 25,000
Supervisory Compensation (% change in salary, benefits, and bonus) 0% 60,000 0% 0 0% 25,000 0% 0

Projected Workforce Productivity (pairs per worker in Y11) 4,939 0 3,482 0

Number of Workers Employed (given branded production entries) 860 0 1,221 0

$000s $/pair $000s $/pair $000s $/pair $000s $/pair

Cost of Labor Production Base Wages 29,532 6.62 0 0.00 14,799 3.15 0 0.00
Associated Workers Incentive Pay 4,178 0.94 0 0.00 2,029 0.43 0 0.00
with Footwear Fringe Benefits 2,586 0.58 0 0.00 1,875 0.40 0 0.00
Production Overtime Pay 2,431 0.54 0 0.00 2,526 0.54 0 0.00
Total 38,727 8.68 0 0.00 21,229 4.52 0 0.00
Per-pair figures
not adjusted for Best Practices Training Expenditures 3,010 0.67 0 0.00 3,968 0.85 0 0.00
rejected pairs. Supervisory Compensation (salary + benefits) 1,020 0.23 0 0.00 600 0.13 0 0.00
Total Cost of Production Labor 42,757 9.58 0 0.00 25,797 5.50 0 0.00

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Projected Year 11 Performance 

Investor Change
Scoring Measures Year 11 Expectation Other Measures Year 11 from Y10
EPS (earnings per share) $2.64 $2.50 Net Revenues ($000s) 531,985 +23.0%
ROE (return on equity) 22.9% 21.0%
Net Profit ($000s) 52,569 +31.4%
Credit Rating A B+
Image Rating 83 70 Ending Cash ($000s) 6,238 +164

North America Europe-Africa Asia-Pacific Latin America

B F P Facility Facility Facility Facility
Branded Materials Standard Materials % 68 % 0% 46 % 0%
(see anticipated materials
Production Superior Materials %
prices at bottom of page) 32 % 0 % 54 % 0 %
Specs Number of Models / Styles (50 to 500 models) 250 250
Enhanced Styling / Features ($000s per model) $ 37 k/model $ 0 k/model $ 34 k/model $ 0 k/model
TQM / 6-Sigma Quality Program ($/pr. produced) $ 5.00 per pair $ 0.00 per pair $ 5.00 per pair $ 0.00 per pair

Projected S/Q Rating (the style/quality rating ranges from 0.5 to 10.0 stars) 7.2★ 0.0★ 7.3★ 0.0★
Projected Reject Rate (percentage of pairs that will fail inspection) 1.7% 0.0% 4.5% 0.0%

Maximum Y11 Production Capability Without Overtime 5,000 pairs 0 pairs 6,000 pairs 0 pairs
(assuming all unused facility space is filled at the
beginning of the year with production equipment) Maximum Overtime 6,000 pairs 0 pairs 7,200 pairs 0 pairs
This figure is an approximation given beginning inventories, projected reject rates, and entries that currently
Total Branded Production Needed in Year 11 9,600 pairs reside on the Internet and Wholesale Marketing decision pages. The company must schedule production of
(to satisfy projected demand in all four regions) (before rejects) about this many pairs to satisfy projected demand and inventory requirements.

Note: To install production equipment at the beginning of the current year in a facility that currently has unused
space, go to the Production Facilities decision entry page (the next item in the decision entries menu).

Year 11 Production Regular-Time 4,250 pairs 0 pairs 4,250 pairs 0 pairs

Capability (000s of pairs Overtime (20% maximum) 850 0 850 0
before rejects)
Total Production Capability 5,100 pairs 0 pairs 5,100 pairs 0 pairs

Branded Pairs to be Manufactured in Y11 (000s) Total = 8,282 4033 pairs 0 pairs 4249 pairs 0 pairs

Branded Footwear Regular-Time Production 4,033 pairs 0 pairs 4,249 pairs 0 pairs
Production (000s of pairs) Overtime Production 0 0 0 0
Rejected Pairs (and reject rate) 69 (1.7%) 0 (0.0%) 191 (4.5%) 0 (0.0%)
Net Branded Production 3,964 pairs 0 pairs 4,058 pairs 0 pairs
Production Capability Remaining for Private-Label Operations 1,067 pairs 0 pairs 851 pairs 0 pairs

Cost of Rejected Pairs (in $000s and $ per pair produced) $2,022 $0.51 $0 $0.00 $4,910 $1.21 $0 $0.00

$000s $/pair $000s $/pair $000s $/pair $000s $/pair

Costs Associated with Materials Cost 31,686 7.99 0 0.00 38,946 9.60 0 0.00
the Production of Labor Cost (including supervisory costs) 38,086 9.61 0 0.00 22,833 5.63 0 0.00
Branded Footwear Enhanced Styling/Features 9,250 2.33 0 0.00 8,500 2.09 0 0.00
TQM / 6-Sigma Quality Program 20,165 5.09 0 0.00 21,245 5.24 0 0.00
Production Run Set-Up 6,000 1.51 0 0.00 6,000 1.48 0 0.00
Maintenance (of facilities and equipment) 2,975 0.75 0 0.00 3,822 0.94 0 0.00
Depreciation (of facilities and equipment) 9,854 2.49 0 0.00 8,245 2.03 0 0.00
Total Branded Production Cost 118,016 29.77 0 0.00 109,591 27.01 0 0.00
Beginning figures represent actual
Anticipated Y11 Materials Prices Standard Materials $ 6.00 per pair Superior Materials $ 12.00 per pair materials prices from the prior year.

Anticipated Global materials prices are a function of industry-wide usage of superior versus standard materials and industry-wide utilization of
Materials available footwear production capability — see page 4 of the Footwear Industry Report for Year 10. You may enter estimates of
Prices Year 11 materials prices above. The more accurate the estimates, the more accurate your projected production costs will be.

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Projected Year 11 Performance 

Investor Change
Scoring Measures Year 11 Expectation Other Measures Year 11 from Y10
EPS (earnings per share) $2.64 $2.50 Net Revenues ($000s) 531,985 +23.0%
ROE (return on equity) 22.9% 21.0%
Net Profit ($000s) 52,569 +31.4%
Credit Rating A B+
Image Rating 83 70 Ending Cash ($000s) 6,238 +164

North America Europe-Africa Asia-Pacific Latin America

E F P Facility Facility Facility Facility
Space Available for Footwear Production Equipment in Y11 5,000 pairs 0 pairs 6,000 pairs 0 pairs
Production Equipment in Place at Beginning of Y11 (000s of pairs) 4,000 pairs 0 pairs 4,000 pairs 0 pairs
Purchase of Production New (000s of pairs) 250 pairs 0 pairs 250 pairs 0 pairs
Equipment Refurbished (000s of pairs) 0 pairs 0 pairs 0 pairs 0 pairs

Sale of Existing Equipment (oldest equipment will be sold first) 0 pairs 0 pairs 0 pairs 0 pairs

Total Footwear Production Capability in Y11 (000s of pairs without OT) 4,250 pairs 0 pairs 4,250 pairs 0 pairs
Percentage of New / Refurbished Production Equipment 100% 0% 0% 0% 6% 94% 0% 0%

North America Europe-Africa Asia-Pacific Latin America

P I O Facility Facility Facility Facility
Capital outlay ($000s) $10,625 $0 $10,625 $0
Option Purchase of special equipment No No No No
Projected annual cost savings
A to reduce reject rate by 50% at current reject rate ($000s) $39 $0 $1,617 $0
Capital outlay ($000s) $6,800 $0 $6,800 $0
Option Layout revisions to reduce pro-
Projected annual cost savings Yes No Yes No
B duction run setup costs by 50% at current model count ($000s) $2,570 $0 $2,570 $0
Capital outlay ($000s) $20,400 $0 $20,400 $0
Option Purchase of special equipment
Projected annual cost savings No No No No
C to increase S/Q rating by 1 star at current S/Q effort ($000s) $2,937 $0 $4,481 $0
Capital outlay ($000s) $61,200 $0 $61,200 $0
Option Robot-assisted production to in-
Projected annual cost savings No No No No
D crease worker productivity by 50% at current production / comp. $6,789 $0 $956 $0

North America Europe-Africa Asia-Pacific Latin America

S P E Facility Facility Facility Facility
Space in 000s Equipment Space at the End of Year 10 5,000 pairs 0 pairs 6,000 pairs 0 pairs
of Pairs Construction of Additional Space (initiated in Y10) 0 0 0 0
(without OT)
Space Available for Equipment in Year 11 5,000 pairs 0 pairs 6,000 pairs 0 pairs

Construction of New / Additional Space (to be available in Year 12) 0 pairs 0 pairs 0 pairs 0 pairs

Space Available for Production Equipment in Year 12 5,000 pairs 0 pairs 6,000 pairs 0 pairs

Capital Outlays Purchase of New Equipment $ 5,000 $ 0 $ 5,000 $ 0

in Year 11 Purchase of Refurbished Equipment 0 0 0 0
($000s)
– Book Value of Equipment Sold 0 0 0 0
Equipment Upgrade Options 6,800 0 6,800 0
Energy Efficiency Initiatives 425 0 425 0
New / Additional Facility Space 0 0 0 0
Net Capital Outlays in Year 11 $ 12,225 $ 0 $ 12,225 $ 0

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Projected Year 11 Performance 

Investor Change
Scoring Measures Year 11 Expectation Other Measures Year 11 from Y10
EPS (earnings per share) $2.64 $2.50 Net Revenues ($000s) 531,985 +23.0%
ROE (return on equity) 22.9% 21.0%
Net Profit ($000s) 52,569 +31.4%
Credit Rating A B+
Image Rating 83 70 Ending Cash ($000s) 6,238 +164

North America Europe-Africa Asia-Pacific Latin America

B D Facility Facility Facility Facility
Pairs Available for Shipment (000s of pairs produced at each facility after rejects) 3,964 pairs 0 pairs 4,058 pairs 0 pairs

Pairs to be Shipped North America Warehouse 2434 0 0 0

from Facility to Europe-Africa Warehouse 1330 0 830 0
(000s of pairs)
Asia-Pacific Warehouse 0 0 1583 0
Latin America Warehouse 200 0 1645 0
Remaining Pairs to be Shipped (if left unshipped, will be shipped automatically) 0 pairs 0 pairs 0 pairs 0 pairs

North America Europe-Africa Asia-Pacific Latin America

W O Warehouse Warehouse Warehouse Warehouse
Pairs Models S/Q Pairs Models S/Q Pairs Models S/Q Pairs Models S/Q
Inventory Left Over at the End of Year 10 (000s) 71 200 3.7★ 60 200 3.7★ 45 200 3.7★ 45 200 3.7★
Inventory Clearance (prior to Year 11 operations) 0 % 0 pairs 0 % 0 pairs 0 % 0 pairs 0 % 0 pairs
$000s $/pair $000s $/pair $000s $/pair $000s $/pair
Clearance Discounted Clearance Revenues 0 0.00 0 0.00 0 0.00 0 0.00
Statistics Direct Cost of Pairs Cleared 0 0.00 0 0.00 0 0.00 0 0.00
Margin Over Direct Cost 0 0.00 0 0.00 0 0.00 0 0.00
Pairs Models S/Q Pairs Models S/Q Pairs Models S/Q Pairs Models S/Q
Beginning Inventory (000s of pairs carried over from Year 10) 71 200 3.7★ 60 200 3.7★ 45 200 3.7★ 45 200 3.7★
Incoming Shipments from North America Facility 2,434 250 7.2 1,330 250 7.2 0 0 0.0 200 250 7.2
(see Note 1 below) Europe-Africa Facility 0 0 0.0 0 0 0.0 0 0 0.0 0 0 0.0
Asia-Pacific Facility 0 0 0.0 830 250 7.3 1,583 250 7.3 1,645 250 7.3
Latin America Facility 0 0 0.0 0 0 0.0 0 0 0.0 0 0 0.0
Pairs Available for Sale in Year 11 (see Note 2 below) 2,505 249 7.1★ 2,220 249 7.1★ 1,628 249 7.2★ 1,890 249 7.2★
Projected Demand (given branded marketing decision entries) 2,882 2,460 1,919 1,892
Required Inventory (needed to achieve delivery time) 115 (2-week delivery) 102 (2-week delivery) 75 (2-week delivery) 87 (2-week delivery)
Projected Inventory Surplus (Shortfall) -492 (minimal) -342 (minimal) -366 (minimal) -89 (minimal)

Projected Distribution and Warehouse Costs $000s $/pair $000s $/pair $000s $/pair $000s $/pair
Exchange Rate Cost Adjustment (on incoming shipments) 0 0.00 0 0.00 0 0.00 0 0.00
Distribution and Freight on Footwear Shipments 2,434 0.97 4,320 1.95 1,583 0.97 3,690 1.95
Warehouse Tariffs on Pairs Imported 0 0.00 12,960 5.84 0 0.00 18,450 9.76
Costs Inventory Storage (on Y10 inventory) 36 0.01 30 0.01 23 0.01 23 0.01
Packaging / Shipping (iNet + wholesale) 13,471 5.38 11,857 5.34 9,165 5.63 9,839 5.21
Warehouse Lease / Maintenance 1,000 0.40 1,000 0.45 1,000 0.61 1,000 0.53
Total Dist. and Whse. Costs 16,941 6.76 30,167 13.59 11,771 7.23 33,002 17.46

Note 1: These figures include the Pairs to be Shipped figures entered at the top of the page and their associated model availability and S/Q rating attributes. If all of the
available pairs at a facility are not shipped then the unshipped pairs will be automatically shipped to regional warehouses in proportion to the shipping decision
entries that exist for that facility.
Note 2: The number of models and S/Q rating of pairs available in each warehouse is a weighted average of the models and S/Q ratings of pairs in beginning inventory
and of pairs shipped in from each plant. The weighted average model availability and weighted average S/Q rating in each region is used to determine the
attractiveness of your brand against the brands of rival companies in the industry.

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Projected Year 11 Performance 

Investor Change
Scoring Measures Year 11 Expectation Other Measures Year 11 from Y10
EPS (earnings per share) $2.64 $2.50 Net Revenues ($000s) 531,985 +23.0%
ROE (return on equity) 22.9% 21.0%
Net Profit ($000s) 52,569 +31.4%
Credit Rating A B+
Image Rating 83 70 Ending Cash ($000s) 6,238 +164

North America Europe-Africa Asia-Pacific Latin America

I M Market Market Market Market
Year 10 Year 11 Year 10 Year 11 Year 10 Year 11 Year 10 Year 11
Marketing variables gen- S/Q Rating (weighted average) 4.0★ 7.1★ 4.0★ 7.1★ 4.0★ 7.2★ 4.0★ 7.2★
erated by production and Models Available (weighted average) 200 249 200 249 200 249 200 249
marketing decisions in Y11. 10,000 9,000 8,000 7,500
Brand Advertising ($000s) 10,000 9,000 8,000 7,500
Internet Retail Price ($ per pair sold online) 67.00 77.00 72.00 82.00 67.00 77.00 72.00 82.00
Marketing Retail Price Exceeds Wholesale Price by 40% 40% 36% 41% 40% 40% 36% 40%
Decisions Search Engine Advertising ($000s) 5,000 5500 4,500 5000 4,000 4500 4,000 4000
Free Shipping (from warehouse to buyer) No Yes No Yes No Yes No Yes
Marketing variables de-
termined by prior-year
Celebrity Appeal (sum of appeal indices for all
celebrities under contract) 0 0 0 0 0 0 0 0
decisions / outcomes. Brand Reputation (prior-year image rating) 70 70 70 70 70 70 70 70
Year 10 Year 11 Year 10 Year 11 Year 10 Year 11 Year 10 Year 11
Actual Projected Actual Projected Actual Projected Actual Projected
Internet Market Share (% of total regional sales volume) 8.3% 11.7% 8.3% 11.7% 8.3% 11.6% 8.3% 11.4%
Internet Sales Volume (000s of pairs sold to online customers) 353 558 300 474 225 369 225 361
$000s $/pair $000s $/pair $000s $/pair $000s $/pair
Revenue, Cost, and Gross Internet Revenues 42,966 77.00 38,868 82.00 28,413 77.00 29,602 82.00
Profit Projections ± Exchange Rate Adjustments 0 0.00 0 0.00 0 0.00 0 0.00
for Year 11 Adjusted Gross Revenues 42,966 77.00 38,868 82.00 28,413 77.00 29,602 82.00
+ Shipping Fees (paid by customer) 0 0.00 0 0.00 0 0.00 0 0.00
Net Internet Revenues 42,966 77.00 38,868 82.00 28,413 77.00 29,602 82.00
Cost of Pairs Sold 17,078 30.61 17,325 36.55 10,275 27.85 14,138 39.16
Warehouse Expenses 7,217 12.93 6,156 12.99 4,856 13.16 4,718 13.07
Marketing Expenses 9,179 16.45 8,358 17.63 7,745 20.99 6,847 18.97
Administrative Expenses 1,245 2.23 1,058 2.23 824 2.23 806 2.23
Operating Profit (Loss) 8,247 14.78 5,971 12.60 4,713 12.77 3,093 8.57
Operating Profit Margin 19.2% 15.4% 16.6% 10.4%

Estimated industry averages S/Q Rating 4.0★ 4.0★ 4.0★ 4.0★

for these marketing variables
are entered on the Wholesale Models Available 200 200 200 200
Marketing decision entry page. Brand Advertising ($000s) $ 10,000 $ 9,000 $ 8,000 $ 7,500
Competitive Retail Price ($ per pair) $ 67.00 $ 72.00 $ 67.00 $ 72.00
Assumptions Search Engine Advertising ($000s) $ 5000 $ 4500 $ 4000 $ 4000
Free Shipping None None None None
Industry averages for these vari- Celebrity Appeal 0 0 0 0
ables determined by prior-year
decision entries / outcomes. Brand Reputation 70 70 70 70

Competitive Enter your estimates of the industry average marketing efforts that will prevail in each internet segment in Year 11.
Assumptions The more accurate your estimates are, the more accurate your projected market shares and unit sales will be.

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Projected Year 11 Performance 

Investor Change
Scoring Measures Year 11 Expectation Other Measures Year 11 from Y10
EPS (earnings per share) $2.64 $2.50 Net Revenues ($000s) 531,985 +23.0%
ROE (return on equity) 22.9% 21.0%
Net Profit ($000s) 52,569 +31.4%
Credit Rating A B+
Image Rating 83 70 Ending Cash ($000s) 6,238 +164

North America Europe-Africa Asia-Pacific Latin America

W M Market Market Market Market
Year 10 Year 11 Year 10 Year 11 Year 10 Year 11 Year 10 Year 11
Marketing variables gen-
erated by production and
S/Q Rating (weighted average) 4.0★ 7.1★ 4.0★ 7.1★ 4.0★ 7.2★ 4.0★ 7.2★
marketing decisions in Y11. Models Available (weighted average) 200 249 200 249 200 249 200 249
Wholesale Wholesale Price to Retailers ($/pair) 48.00 55.00 53.00 60.00 48.00 55.00 53.00 60.50
Marketing Brand Advertising ($000s) 10,000 10000 9,000 9000 8,000 8000 7,500 7500
Decisions Mail-In Rebate ($3 to $15 per pair) 5.00 5.00 5.00 5.00
5.00 5.00 5.00 5.00
Delivery Time (1 to 4 week delivery) 3 2 3 2 3 2 3 2
Retailer Support ($0 to $10000 per outlet) 4,000 4000 4,000 4000 2,750 2750 2,750 2750
Marketing variables de-
Retail Outlets (willing to carry your brand) 1,000 1,000 1,000 1,000 700 700 700 700
termined by prior-year Celebrity Appeal (sum of appeal indices for all
celebrities under contract) 0 0 0 0 0 0 0 0
decisions / outcomes. 70 70 70 70
Brand Reputation (prior-year image rating) 70 70 70 70
Year 10 Year 11 Year 10 Year 11 Year 10 Year 11 Year 10 Year 11
Actual Projected Actual Projected Actual Projected Actual Projected
Wholesale Market Share (% of total regional sales volume) 8.3% 9.3% 8.3% 9.3% 8.3% 9.3% 8.3% 9.2%
Pairs Available for Sale (after filling internet orders) 2,068 1,947 1,760 1,746 1,320 1,259 1,320 1,529
(000s) Wholesale Demand for Branded Pairs 1,997 2,324 1,700 1,986 1,275 1,550 1,275 1,531
Required Inventory (needed to achieve delivery time) 71 115 60 102 45 75 45 87
Surplus (Shortfall) of Branded Pairs 0 -492 0 -342 0 -366 0 -89

$000s $/pair $000s $/pair $000s $/pair $000s $/pair

Revenue, Cost, and Gross Wholesale Revenues 100,760 55.00 98,640 60.00 65,120 55.00 87,241 60.50
Profit Projections ± Exchange Rate Adjustments 0 0.00 0 0.00 0 0.00 0 0.00
for Year 11 Net Wholesale Revenues 100,760 55.00 98,640 60.00 65,120 55.00 87,241 60.50
Cost of Pairs Sold 56,071 30.61 60,090 36.55 32,968 27.84 56,475 39.16
Warehouse Expenses 7,290 3.98 6,731 4.09 5,332 4.50 6,144 4.26
Marketing Expenses 16,703 9.12 15,507 9.43 11,280 9.53 11,889 8.24
Administrative Expenses 4,089 2.23 3,669 2.23 2,642 2.23 3,219 2.23
Operating Profit (Loss) 16,607 9.06 12,643 7.69 12,898 10.89 9,514 6.60
Operating Profit Margin 16.5% 12.8% 19.8% 10.9%

Competitive S/Q Rating 4.0 ★ 4.0 ★ 4.0 ★ 4.0 ★

Assumptions Model Availability 200 models 200 models 200 models 200 models
Wholesale Price ($ per pair) $ 48.00 $ 53.00 $ 48.00 $ 53.00
Brand Advertising ($000s) $ 10000 $ 9000 $ 8000 $ 7500
Rebate Offer ($ per pair) $ 5.00 $ 5.00 $ 5.00 $ 5.00
Delivery Time (weeks) 3.0 weeks 3.0 weeks 3.0 weeks 3.0 weeks
Retailer Support ($ per outlet) $ 4000 $ 4000 $ 2750 $ 2750
Industry averages for these vari- Retail Outlets 1,000 outlets 1,000 outlets 700 outlets 700 outlets
ables determined by prior-year Celebrity Appeal 0 0 0 0
decision entries and outcomes. 70 70 70 70
Brand Reputation

Competitive Enter your estimates of the industry average marketing efforts that will prevail in each wholesale segment in Year 11.
Assumptions The more accurate your estimates are, the more accurate your projected market shares and unit sales will be.

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Projected Year 11 Performance 

Investor Change
Scoring Measures Year 11 Expectation Other Measures Year 11 from Y10
EPS (earnings per share) $2.64 $2.50 Net Revenues ($000s) 531,985 +23.0%
ROE (return on equity) 22.9% 21.0%
Net Profit ($000s) 52,569 +31.4%
Credit Rating A B+
Image Rating 83 70 Ending Cash ($000s) 6,238 +164

North America Europe-Africa Asia-Pacific Latin America

P P -L P Facility Facility Facility Facility
Private-Label Materials Standard Materials % 70 % 0% 64 % 0%
Specifications Superior materials % 30 % 0 % 36 % 0 %

Number of Models / Styles (global requirement) 100 models 0 models 100 models 0 models
Enhanced Styling / Features ($000s per model) $ 10 k/model $ 0 k/model $ 12 k/model $ 0 k/model

S/Q Rating of Private-Label Pairs to be Produced Global Minimum = 3.0★ 5.6★ 0.0★ 5.5★ 0.0★

Capacity Available for Private-Label Prodiction (000s of pairs) 1,067 pairs 0 pairs 851 pairs 0 pairs

Private-Label Pairs North America Warehouse 215 0 0 0

to be Produced Europe-Africa Warehouse 215 0 0 0
and Shipped to Asia-Pacific Warehouse 0 0 222 0
(before rejects)
Latin America Warehouse 0 0 222 0
Proposed Total Production Regular Time 217 pairs 0 pairs 1 pairs 0 pairs
of Private-Label Pairs Overtime 213 0 443 0
(000s of pairs)
Pairs Rejected 26 (1.5%) 0 (0.0%) 37 (3.9%) 0 (0.0%)
Net Private-Label Production 404 pairs 0 pairs 407 pairs 0 pairs
Projected Cost of Private-Label Pairs to be Produced ($ per pair) $32.16 per pair $0.00 per pair $28.83 per pair $0.00 per pair

North America Europe-Africa Asia-Pacific Latin America

P -L C O Market Market Market Market
(projected total regional demand assuming nor-
Private-Label Demand mal competitive conditions – see page 4 of FIR) 2,664 pairs 2,664 pairs 2,712 pairs 2,712 pairs

Pairs Offered for Sale (to be produced and shipped if offer is accepted) 212 pairs 212 pairs 213 pairs 213 pairs

Price Offer (must be at least $10.00 below the Y11 regional average whsle. price) $ 45.00 $ 50.00 $ 45.00 $ 50.00
Projected Private-Label Market Share (if offer is accepted) 8.0% 8.0% 7.9% 7.9%
$000s $/pair $000s $/pair $000s $/pair $000s $/pair
Revenue, Cost, and Gross Private-Label Revenues 9,540 45.00 10,600 50.00 9,585 45.00 10,650 50.00
Margin Projections ± Exchange Rate Adjustments 0 0.00 0 0.00 0 0.00 0 0.00
for Year 11 Net Private-Label Revenues 9,540 45.00 10,600 50.00 9,585 45.00 10,650 50.00
Production Cost 6,818 32.16 6,818 32.16 6,141 28.83 6,141 28.83
± Exchange Rate Adjustments 0 0.00 0 0.00 0 0.00 0 0.00
Freight / Packaging / Tariffs 424 2.00 1,908 9.00 426 2.00 2,769 13.00
Margin Over Direct Costs 2,298 10.84 1,874 8.84 3,018 14.17 1,740 8.17
The projected outcome of winning a Private-Label contract may Incorporate the pro- Incorporate the pro- Incorporate the pro- Incorporate the pro-
be included in the overall performance projections for the cur- jected olutcomes for jected olutcomes for jected olutcomes for jected olutcomes for
rent year. Select "Yes" for a region only if there is a reasonable this region into Y11 this region into Y11 this region into Y11 this region into Y11
probability of winning a Private-Label contract in the region. projections? Yes projections? Yes projections? Yes projections? Yes

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Projected Year 11 Performance 

Investor Change
Scoring Measures Year 11 Expectation Other Measures Year 11 from Y10
EPS (earnings per share) $2.64 $2.50 Net Revenues ($000s) 531,985 +23.0%
ROE (return on equity) 22.9% 21.0%
Net Profit ($000s) 52,569 +31.4%
Credit Rating A B+
Image Rating 83 70 Ending Cash ($000s) 6,238 +164

C E C
Appeal Indexes Contract Terminate Available Contract
Amount Contract Contract for Offer Offer
Celebrity N.A. E-A A-P L.A. Currently Signed By ($000s / yr.) Early Length Offer ($000s / yr.) Priority
Judy Judge 85 65 60 40 [unsigned] 0 2 years NOW $ 0
Kimmie Jimmel 100 70 65 75 [unsigned] 0 2 years NOW $ 750 2
Bud Birkenstock 70 100 70 55 [unsigned] 0 2 years NOW $ 0
Jose Montana 60 50 60 95 [unsigned] 0 2 years NOW $ 1000 1
Samuelle Jackson 40 85 60 100 [unsigned] 0 3 years NOW $ 0
Bronko Mars 60 45 100 65 [unsigned] 0 3 years NOW $ 0
Steff Caraway 75 80 95 60 [unsigned] 0 3 years NOW $ 0
Jay XYZ 75 70 55 90 [unsigned] 0 3 years NOW $ 0
Nunchuck Norris 90 80 100 65 [unsigned] 0 2 years Year 12
Roger Federation 75 85 65 100 [unsigned] 0 3 years Year 12
Nick Shavan 70 75 70 55 [unsigned] 0 2 years Year 12
Anderson Blooper 65 60 70 80 [unsigned] 0 3 years Year 12
Mic Jagermeister 80 100 75 75 [unsigned] 0 2 years Year 12
Jim Hardball 65 45 70 70 [unsigned] 0 3 years Year 12
LaBron Game 100 80 85 85 [unsigned] 0 2 years Year 12
Flint Westwood 50 75 60 70 [unsigned] 0 3 years Year 12
When the total annual cost of the company's winning Year 11 contract offers
Spending Cap on Year 11 Contracts ($000s) $ 1500 reaches this dollar amount, all remaining lower-priority offers will be withdrawn. $1,750 Sum of Year 11
contract offers.

Most Recent Contract Offers • Enter all contract offers in thousands of dollars per year. For example,
(letter in parentheses indicated company that made the offer) enter an offer of $2.5 million as 2500.
No. of Highest 2nd 3rd
Celebrity Offers Offer Highest Highest • The minimum annual contract offer is $500k (entered as 500).
Judy Judge 0 0 0 0
• A contract offer entry of $0 for a given celebrity indicates that the
celebrity will receive no offer.
Kimmie Jimmel 0 0 0 0
Bud Birkenstock 0 0 0 0 • The maximum annual contract offer is $30 million (entered as 30000).
Jose Montana 0 0 0 0 • In a given year, offers may be made to as many celebrities as are
Samuelle Jackson 0 0 0 0 available, however a company will be awarded no more than 3 celebrity
Bronko Mars 0 0 0 0 contracts in the same year.
Steff Caraway 0 0 0 0
Jay XYZ 0 0 0 0
• When making offers to multiple celebrities in the same year, it is recom-
mended that you prioritize the offers and set a spending cap for the year
Nunchuck Norris 0 0 0 0 (to guard against winning more contracts than intended).
Roger Federation 0 0 0 0
Nick Shavan 0 0 0 0 • In a given region, the maximum affective celebrity appeal total is 300.
Anderson Blooper 0 0 0 0 When the sum of the appeal indexes in a given region reaches 300, no
Mic Jagermeister 0 0 0 0 additional market impact is gained by signing more celebrities.
Jim Hardball 0 0 0 0
LaBron Game 0 0 0 0
Flint Westwood 0 0 0 0

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Projected Year 11 Performance 

Investor Change
Scoring Measures Year 11 Expectation Other Measures Year 11 from Y10
EPS (earnings per share) $2.64 $2.50 Net Revenues ($000s) 531,985 +23.0%
ROE (return on equity) 22.9% 21.0%
Net Profit ($000s) 52,569 +31.4%
Credit Rating A B+
Image Rating 83 70 Ending Cash ($000s) 6,238 +164

Corporate Social Responsibility and Citizenship

Below are seven CSRC initiatives that can be used to develop a Which (if any) of the seven initiatives to pursue and how much to
"social responsibility strategy" for your company. The drop-down spend is entirely voluntary. There is no pressure to spend anything
selection boxes below offer several optional actions. on these initiatives — the company can perform successfully without
While undertaking CSRC initiatives is often considered "the right undertaking any social responsibility initiatives. In Year 10, prior
thing to do", one reason to operate in a socially responsible manner company management spent no money on any of the seven optional
social responsibility initiatives.
is to enhance the company's image. Aggressive and astute pursuit of
a social responsibility strategy over 5 years can increase the The Help button at the top-right offers further information and guid-
company's Image Rating by 15 to 20 points. ance regarding the seven CSRC initiatives.

CSRC I
Involves the use of recycled packaging materials to box each pair of athletic footwear at company distribution centers.
Use of Recycled Boxing / Packaging No Increases shoe packaging costs by $0.15 per pair.
Involves investments at each production facility for each million pairs of production capability to improve energy
Energy Efficiency Initiatives $ 100 efficiency and use renewable energy sources. Treated as capital investment depreciated at 10% per year.
Involves making tax-deductible donations to charities and charitable causes. Reported on the Income Statement under
% ofprofit
pretax
Charitable Contributions $ 0 or 0 "Other Expense" (reduces pre-tax profits).
Involves training for and development / enforcement of a code of ethics for company managers at all levels. Increases
Ethics Training / Enforcement Yes corporate administrative expenses by $400k annually.

Improved Cafeteria and On-Site Involves one-time capital investment of $2.5 million and increased administrative costs of $600k annualy per facility.
Child Care Facilities No Results in a one-time productivity increase of 100 pairs per year at each facility.
Working
Conditions Improved Ventilation, Involves one-time capital investment of $3.0 million and increased administrative costs of $500k annualy per facility.
Lighting, and Safety No Results in a one-time productivity increase of 100 pairs per year at each facility.
Involves compliance monitoring of supplier employment practices and working conditions to prevent 50+ hour work
Institution of a Supplier Code of Conduct Yes weeks, substandard wages, use of underage labor, exposure to toxic materials, and lax safety practices. Entails added
annual administrative costs of $750k per facility.

Cash Outlays for Corporate Social Responsibility and Citizenship in Y11 Total Cash Outlays ($000s) $2,850 Per Pair Sold ($ per pair) $0.33

Company's Historical CSRC Efforts Year 6 Year 7 Year 8 Year 9 Year 10 The information below indicates the range of CSRC
effort being exerted by the companies in your
Recycled Boxing / Packaging No No No No No industry. These statistics should be helpful in craft-
ing your own company's CSRC strategy.
Energy Efficiency Initiatives ($000s) 0 0 0 0 0
Charitable Contributions ($000s) 0 0 0 0 0 Year 9 Year 10
Industry 16 CSRC Cash Outlays
Ethics Training / Enforcement No No No No No
Thousands of $ High 0 0
Improved Working Facilities No No No No No Average 0 0
Conditions Safety/Lighting No No No No No Low 0 0
Supplier Code of Conduct No No No No No $ Per Pair Sold High 0.00 0.00
Total Cash Outlays Thousands of $ 0 0 0 0 0 Average 0.00 0.00
$ Per Unit Sold 0.00 0.00 0.00 0.00 0.00 Low 0.00 0.00

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Projected Year 11 Performance 

Investor Change
Scoring Measures Year 11 Expectation Other Measures Year 11 from Y10
EPS (earnings per share) $2.64 $2.50 Net Revenues ($000s) 531,985 +23.0%
ROE (return on equity) 22.9% 21.0%
Net Profit ($000s) 52,569 +31.4%
Credit Rating A B+
Image Rating 83 70 Ending Cash ($000s) 6,238 +164

F C F
Sources of 1-Year Bank Loan (7.00% interest) $ 0 Uses for Early Repayment of L-T None
Additional Cash 5-Year Bank Loan (7.50% interest) $ 0 Excess Cash Loans (Balance Sheet Note 8) N/A
($000s) ($000s)
10-Year Bank Loan (8.00% interest) $ 0
Dividend ($/share) Year 10 dividend was $1.00 $ 0.50
Stock Issue (000s of shares at $30.15) 0 Stock Repurchase (000s of shares at $30.15) 100
Maximum share issue in Y11 = 0k Maximum share repurchase in Y11 = 200k

Shares of stock outstanding at the beginning of Year 11 20,000 k Shares of stock outstanding at the end of Year 11 19,900 k

Projected Cash Available in Year 11 $000s Projected Cash Outlays in Year 11 $000s
Beginning Cash Balance (carried over from Year 10) $ 6,074 Cash Payments to Materials Suppliers $ 77,554
Outlays Production Expenses (excluding depreciation) 154,798
Cash Receipts from Footwear Sales 519,534
Inflows Bank Loans 1-Year Loan 0 Distribution and Warehouse Expenses 97,408
5-Year Loan 0 Marketing and Administrative Expenses 105,058
10-Year Loan 0 Capital Facility Expansion (new space) 0
Outlays Equipment Purchases 10,000
Stock Issue (0 shares @ $30.15) 0
Sale of Used Production Equipment 0 Equipment Upgrade Options 13,600
Interest Income on Y10 Cash Balance 121 Energy Efficiency Initiatives 850
Loan to Cover Overdraft (1-year loan @ 9.0%) 0 Bank Loan 1-Year Loan 0
Repayment 5-Year Loans 0
Cash Refund (awarded by instructor) 0
10-Year Loans 15,900
Total Cash Available from All Sources $ 525,729 Interest Bank Loans 8,829
Payments Y10 Overdraft Loan 0
Stock Repurchases (100 shares @ $30.15) 3,015
Income Tax Payments 22,529
Dividend Payments to Shareholders 9,950
Charitable Contributions 0
Cash Fine (assessed by instructor) 0
Total Cash Outlays $ 519,491

If sales targets are not met, an overdraft loan is likely with this low cash balance.  Projected Cash Balance at the End of Year 11 ($000s) $ +6,238
Last Year 11 Last Year 11
Other Important Financial Statistics Year (projected) Performance on Credit Rating Measures Year (projected)

Interest Rate Paid on Overdraft Loans 9.0% 9.0% Interest Coverage Ratio (operating profit ÷ interest exp.) 6.62 9.62
Interest Rate Received on Cash Balances 2.0% 2.0% Debt to Assets Ratio (total debt ÷ total assets) 0.39 0.32
Shareholder Equity (mandated minimum = $150 mil.) $210 mil. $250 mil. Risk of Default (based on Y11 default risk ratio of 4.56) Medium Low

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