Kick Shoe Company: Comprehensive Year 13 Shareholder Report Review

This annual shareholder report for Kick Shoe Company details the company's performance in Year 13, reviewing key financial indicators, market share, and strategic initiatives. The report analyzes revenues, net profits, operating costs, and balance sheet data, including assets, liabilities, and equity. It examines market share across internet, wholesale, and retail channels, and provides insights into global unit sales and financial ratios. The analysis covers financial performance, company image, return on equity, stock prices, and human resources, including worker productivity and training. Additionally, the report evaluates pricing strategies, sales performance across different segments, and advertising efforts. The report concludes with a review of key performance indicators, financial ratios, and human resource metrics, summarizing the company's strengths, weaknesses, and plans for Year 14.

Subject Name: XXX
Subject Code: XXX
Tutor: XXX
Assignment: Annual Shareholder Report for Year 13
Date: XXX
Name: XXX
Student ID: XXX- Finance Manager
Name: XXX
Student ID: XXX- Operations Manager
Name; XXX
Student ID: XXX- Marketing Manager

Year 13
Annual Shareholder
Report
Kick Shoe Company.

INTRODUCTION
It has been a long business year, many activities, strategies, plan executions, and most of all, the
fact that we have reached at this point in business. Over the years, we have measured our
progress, learnt from our past, and made plans on how to forge the future as a company and have
established strategies that have made us hold onto business for this while. Some fail, some are
successful and others extremely successful. This is so, because of the structure of our company,
cooperation from all stakeholders and the belief in quality and positively contributing to the
society. Part of our building pillars as a company is responsibility towards stakeholders. This
way we manage to be steadfast to our task and be able to meet our goals. Our stakeholders
include:
i. Government
ii. Shareholders.
iii. Consumers
iv. Workforce
v. Business community.
According to BDC business article, in order to determine whether your business is a success or
not, you need to measure the value of your strategies over the cycle period of your business,
BDC (2018). This has been true for Kick Shoes Company. Each year we generate a report for
our business status, activities, and a plan for the succeeding year. As part of our responsibility to
our investors who need to know whether their money is meeting its value and the progress of the
business they are financing and whether they are benefiting for their financial input.

EXECUTIVE SUMMARY
In year 12, Kick Shoes Company outlined plans it intended to see come into fruition in year 13,
this among others included:
i. Increase in the return on equity
ii. Increasing its market share
iii. Lowering the cost of production
iv. Improving its product quality
v. Raising the revenue rates through increase of sales
vi. Increasing worker knowledge and Skills
vii. Increasing its product output
viii. Promoting its image
ix. Raising product awareness through, among other means: advertising and sales support
for retailers
As it is with all plans, not everything planned happens, but the percentage of achieving the ones
stated is what defines success and failure. Kick Shoes achieved a number of the year 12 plans
however it failed in some.
In this report, we will outline the key indicators of business performance, analyze the result,
draw inferences, and reach into conclusions. We will then determine the year 14 plans.
Moreover, strategize on how to achieve them.
We will include graphs to show relationship over the business years and show the change:
whether positive or negative. From the data that gathered over the year, we will outline our
strengths, weaknesses and seek to use our strengths and heal our weaknesses.
DATA AND INTERPRETATION
MARKET SHARE
Company Market distribution
Kick Shoe company ventures the sale of its footwear products in three distinctive markets:

i. Internet market
ii. Wholesale market
iii. Retail market (private-label)
However, retail market is often under private-label market category. In year 13, unlike other
business years, the internet share market saw a higher market share than wholesale market by
about 3%. While the internet stood at 9% of the company’s market share, wholesale had 6%
market share.
Figure 1: Market share percentage for internet and wholesale
Global market share
The company market share dropped by over 5% from 11% to 6%. This was majorly due to lower
wholesale venture and lower image rating. This can be attributed to consumer change and more
products that are competitive.
Figure 2: global market share

Global Unit Sales
Due to a drop in market share, Kick feet company recorded a drop in its year 13 total sales from
6389 to 5893. However, the internet sales remained relatively the same at 1022 units while the
whole sale units dropped, holding at 4237 units.
Figure 3: Global unit sales
Selected Financial Statistics for year 13
Table 1: Selected financial statistics
Oper
ating
Cost $48,587
Ware
house
cost $19,073
Total marketing expenses (wholesale
& internet) $53403
Admin expenses ($) $7,966
Operating Profits % 15.7
Net Profit % 9.5
Current Ratio 2.38
Invda
ys
164

The cost of operation for the company was 48,587 in year13 a decrease of 3.271% from year 12,
showing a positive effect of workforce skills and specialization.
The operation profits for year 13 was 15.7%
The warehouse cost in year 13 was averagely 19,073, which is 3.63 per pair, however this
differed on individual type of product, i.e.:
 Private label
 Branded
Hence, in total, the cost of warehousing was $19,073 in year 13.
The current ratio of year 13 stood at 2.38%, while the inventory days were 164. In addition, the
total expenses for administration was $7,966
Balance sheet for year 13
Table 2: Summary balance sheet for Kick Shoe Company
Balance sheet summary ($,
000)
Cash On Hand 326299
Total Assets 292,500
Current Liabilities 50,915
Long-Term Debt 36792
Beginning Equity 177,698
Stock Sale (Purchase) 9,700
Earnings Retained 29,387
Ending Equity 207,085
The company had total assets of $292,500 while the cash on hand as per end of inventory year
was $326299. The earnings that retained by the company totalled to $207,085, the return on
equity for year 13 was$ 29,387 indicating a return of 15.3% for year 13.

FINANCIAL PERFORMANCE
Table 3Company financial performance
SUMMARY OF KEY PERFORMANCE
INDICATORS:
YEAR 10 11 12 13 Changes
Revenues
(000’s)
239147 265185 273715 309,451 Increased
Net Profit
(000’s)
25000 27445 23620 36066 Increased
Percentag
e profit
14.9% 19.1% 17.3% 16.1% Decreased
NET REVENUES
In year 13, fortunately, Kick Shoe Company recorded a increase in revenue from a record
$273,715,000 to $ 309,451,000 this was on average a 7.24 % increase in revenue.
Consequently, this saw the company profits rise from $23620to $36066

Figure 4: Net revenues graph
COMPANY IMAGE
The company had a shaky image in year 13; this is due to an increase in credit rating and a
decrease in image rating.
Credit rating
The credit rating for the company remained at a high of A-, indicating the company is able to pay
its credit on the operating finances; this is good for our credit generation in case we need to come
up with funding for our business operations.
Figure 5: Credit rating graph

Image rating
Despite a good credit rating, the company recorded a drop in its image rating by almost 5 points;
this is attributed to a lower advertisement strategy adopted in year 12 for year 13.
Figure 6: Image rating graph
Return on equity (R.O.E)
In year 13 Kick Shoe company saw a decrease on its average return on equity from 18.7% to
15.3%, this indicates that the market shares for each stock dropped in the dividend attraction.
Figure 7: return on equity.
Stock Price
Due to the seemingly slump on return on equity, the company’s stock quote on the stock market
went down from $51.35 to $34.48. However, the investor expectation was still up, expecting an
increase stock price to get back their profits.

Figure 8: Stock price for year 10-13
Terms Year 10 Year 11 Year 12 Year 13
Changes in
year 13
Earning
s per
Share
(EPS)
$3.89
3.21 3.17 3.03
Increased
Return
on
Equity
%(ROE)
17.3
19.7 17.7 15.3
Increased
Credit
Rating
B+ A- A- A - Same
Image
Rating
70 76 74 66 Decreased
Stock
Price
55.57 61.35 51.35 34.48 Decreased
FINANCIAL RATIO ANALYSES
Table 4: Company financial ratio

The company had a positive financial ratio in the year 13, where the interest coverage ratio
increased by 4.08% from 5.87% in year 12 to 9.95% in year 13. However, the debt to asset ratio
went down a little by 7% from 29% in Y-12 to 22% in Y-13 this was due to increased borrowing
and in-flexible asset expansion policy for the year 13 while the company was adopting an
increased production policy per worker, hence had to put in more resources into worker-
expenditure other than asset acquisition. In line of financial ratio, the company default risk ratio
decreased by 0.9%, this indicates a positive improvement in tender acquisition and insurance.
HUMAN RESOURCES
One of the company strategic plans for the year 13 was to increase worker productivity through
training, motivation i.e. by increase of incentives and increased supply to key markets. This was
a success for the company.
Table 5: Company statistics on worker productivity and investment
Year 10 11 12 13 Changes
Workers Productivity pairs
per worker (000’s)
6, 857 6,687 6,579 6,564 Increased
RATIOS/
YEAR
10 11 12 13 Changes
Interest
Coverage
Ratio
4.74% 5.94% 5.87% 9.95% Increased
Debt to Asset
Ratio
38% 33% 29% 22% Decreased
Default Risk
Ratio
1.96
(medium)
1.94
(medium)
2.57
(high)
1.60
(medium
)
Decreased
Credit Rating B+ B A- A- Same

Number of Workers 1,847 1,876 2057 2054 Increased
Net footwear production 4,526 5,986 6,431 6,758 Increased
Annual Base Wages (000’s
per worker)
 North America
 Asia-Pacific
17.3
6.9
17.67
7.6
21.2
5.1
21.4
5.3
Increased
Increased
Incentive Pay (000’s per
worker)
 North America
 Asia-Pacific
1.43
0.68
1.60
0.9
1.30
0.75
1.30
0.80
Increased
Increased
Best Practice Training per
worker
1,576 1,723 1,765 2049 Increased
The company recorded a decrease in average per worker output (000’s) from 6,579 to 6,564 this
hindered the company long-term plan of increased worker productivity slightly.
The company also cut the number of its plant workers from 2057 to 2054, consequently, this saw
a production in branded footwear of 6,758 units.

In order to increase worker training and skills, the company ensured an increase in expenditure in
both the worker-training program and the sigma quality program, as in.:
 Incentive pay per worker in North America was $21,400 an increase from 12’s $21,200
in year 13, While in the Pacific Asia region was $5,300 per worker an increase from
$5,100 in year 12
 The company spending on TQM/6-Sigma Quality Program was $10,200,000. This was
to ensure quality product output by the company production segment.
PRICING
In the of incentive year 12, the company had a strategic plan to increase affordability of its shoe
products, this was part of the goal of increasing the market share. Therefore, the company
adopted he discount on product policy hence decreasing its pricing of its market segments:
 Internet
 Wholesale
 Private label
Table 6: price comparison year 12 and 13
Price per Pair
(currency in
AUD)
North America Europe
Africa
Asia Pacific Latin America
Internet
Year 12
Year 13
$70.25
$72.00
$70.25
70.32
$70.25
77.58
$70.25
75.08
Wholesale
Year 12
Year 13
$55,52
$61.00
$52.43
$50.89
$63.66
$78.66
$51.33
$57.35
Net Revenues
Year 13

Wholesale
internet
71,248
10,296
99,228
9,775
28,789
7,758
73,815
8,034
 The company internet price over all its regions was averagely $70.25 in year 12, while
that in year 13 was $73.34
 Wholesale pricing ranged between $50.89 and 78.66 across the company market share as
in:
i. North America- 61.00
ii. Europe Africa- 50.89
iii. Asia pacific- 78.66
iv. Latin-America-57.35
Averagely due to decrease in sale prices, the revenues generated from internet sales was
approximately $35,863 in year 13, and sale revenues from wholesale totalled $273,080
Figure 9: Pricing trends
SALES PERFORMANCE
The company had a good sales record for both the internet segment and wholesale. However, the
private label segment saw a slump in its sales record:
Table 7: Sales revenue
TOTAL SALES YEAR

REVENUES
($000s)
10 11 12 13 Changes
Internet $32,769 $28,536 $31,425 35,863 Increased
Wholesale $324,037 $333,932 $321,106 273,080 Increased
 The total sales over internet increased from 31,425 to 35,863
 Wholesale sales increased from$ 321,106 to $ 273,080 indicating a 17.58% increment
ADVERTISING AND AFTER-SALES SUPPORT
In a bid to increase customer product awareness, promote sales and ensure customer loyalty. The
company adopted an advertising approach towards sales and a customer aftersales support
approach such as sales rebate, to increase customer loyalty.
Table 8: Advertising and aftersales support
Description/ year 10 11 12 13 Results
Total advertising
expenses- internet
and wholesale
($000s)
17,500 16,900 21,760 26,000 Increased
Retailer support
($000s)
4,900 4,900 4,720 5,365 Increased
Rebate redemption 4,700 4,885 4,200 3,450 Decreased
Inventory clearance
(revenue after
clearance $000)
387 479 463 508 Increased
Inventory ending 1674 1539 1587 1,898 increased

pairs
 Generally, the advertising expenses increased, this was in bid to increase product
awareness in the company market regions and increase sales as a result.
 The ending inventory revenue after clearance increased from$ 463,000 to $508,000
 Ending inventory pairs was 1898 in year 13.

CONCLUSION
As it is with our aims, in year 13, we managed to keep track and be steadfast on our year 12
plans and goals for coming year 13. Through following through our strategies, we recorded a
number of successes:
i. We managed to increase per worker output
ii. We increased our cash in hand at the end of the fiscal year 13
iii. The product rejection rate dropped, this is due to increase in product quality and
aftersales customer support
iv. We put more into advertising and celebrity endorsements to help boast our sales index.
v. We managed to lower our product prices for our customers.
vi. Our internet and wholesale market segments sale returns went up.
vii. The operating and advertising expenses recorded a decrease.
viii. The company return on equity saw an increase record
However, we had a few record drops:
i. Our net revenue dropped relatively in year 13 compared to year 12
ii. The company image rating also dropped a little by approximately 5 points.
Generally, kick Shoe Company had a good business year. This was due to the cooperation from
all our stakeholders and our steadfast positive and optimistic approach in making a positive mark
in our market share and down to our fundamental unit: Our customers.
Conclusively, the company can venture into wider business areas, since it is in a position to
increase its capacity and finance its business operations

REVIEW
Despite the vicissitudes and the unpredictability of the market as an entity, we nevertheless
succeeded in maintaining high integrity data and business records. In addition, we stayed on
course of our previous years goals for the succeeding years. This amongst other principles has
ensured our stability as a company and enabled the company predict and plan for its subsequent
move. The companies guiding principles of quality products, responsibility and inclusive
participation of all the stakeholders always hold, this has enabled the company and will enable it
to achieve its goals.

SUBSEQUENT YEARS STRATEGIES
Our future goals for coming years include:
 Regulate our internet prices and wholesale prices to match the quality of footwear we are
manufacturing.
 Increase our worker skill training for our workers program to increase the worker output
 Increased advertising over internet and wholesale.
 Provide more worker incentives for motivation
 Sell company stocks for clearance with reasonable discounts
 Improve our footwear quality.
 Make our products available as per demand in different regions.
 Promote our Image and Credit rating
 Increase our return on equity for coming year 14
In order to achieve this, we will focus on increasing our market share through increased sale
incentives and increase our productivity index boast our net revenue. We will improve the
quality of our shoe products and engage more in green incorporation program. Further, we will
focus on lowering expenses by utilizing all our plant capacity to meet our expenses- productivity
ratio.
In year 14, we will focus on expanding our market to other regions such as North America,
through product promotion and introduction in the new market venture. We will increase the
stock share cost by $3, to enable boast our company image and increase finances.