Report of the Interpretive Simulations

Topics: Revenue, Income, Income statement Pages: 6 (1474 words) Published: April 18, 2013

Annual Report

Years One - Three

Bradyn Carson, Clarissa McMickle, Micheal Sullivan, Peiying Li

“Perfect Smile Just a Brush Away”

Mission Statement

AllSmile’s mission is to provide quality toothpaste globally at a fair and honest price, providing customer service with a smile.


“Perfect Smile Just a Brush Away”


Table of Contents
To our ShareholdersPage 2
Potential Future Decisions Page 2
Challenges and Decisions in Year Three Page 3
Sales and Earnings Trends Page 4
Industry ComparisonPage 5
Income StatementPage 6


Last year was a big year — we delivered strong results, launched fantastic new products and services, and positioned AllSmile for an incredible future. For fiscal year, we also maintained strong cost discipline resulting in cash flow from operations of $104.7 million, an increase in manufacturer sales by 23 percent from the prior year. At the beginning of our first year we built a million dollar plant in Brazil. We look forward to all the opportunities this plant will provide for our company such as much lower cost of goods manufactured. We delivered these results by providing new products that help the families in the communities. We look forward to all the great opportunities in the future that our products will bring to Latin American individuals.

Potential Future Decisions

AllSmile has made an impact in the industry over the past three periods due to our ability to compete in terms of pricing, advertising, production, and distribution. We plan on increasing our competitiveness in the Latin American market by expanding our brand’s products to better serve our product demand and also by looking into new markets to enter.

When deciding what new products to implement (if any), we will extensively research demographics, both social and economic, and potential demand for these products. It is very important for us to choose products that produce high margins. We will accomplish this by analyzing our costs associated with producing the products and determining the demand for the product.

As far as pricing, AllSmile was able to compete with the large brands during the first three periods. We intend on continuing this, as well as focusing on competing better against local and regional brands in order to increase our total market share in Brazil.

As the market matures in Brazil, we may need to enter a new market in order to increase revenues and maintain our strong growth. Some important characteristics we will analyze are: Population, GDP and GDP per capita, inflation, poverty, labor costs, shipping costs, tariffs, as well as other political, social, and economic factors.

Since completion of our production plant after period one, our costs of goods manufactured has declined each year. This cost reduction will allow us to allocate more funds to areas that grow our revenue such as: advertising, promotion, and a larger sales force.

Challenges and Decisions in Year Three

Our group chose Brazil as the market to enter. We considered the national population, GPD, per capita income and other factors. Toothpaste is an ordinary and special commodity. It is ordinary, because you can easily find toothpaste everywhere, every household can afford it. It is special, because no matter a men, women, old people or children; both the workers and peasants, or drivers, or white-collar workers, and even national leaders; no matter the richest, the poor, all of them need to use it, it is a necessity product. Brazil's population is the largest in the choice of six countries, and their GDP is the highest, GDP / Capita is low. However, due to the universality of the toothpaste, toothpaste has low prices. It will not be a burden on the economy of the Brazilian family....
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