Letter to the Shareholders
Table of Contents
Letter
to Shareholders 3
Financial
Information 5
Balance Sheet 5
Income Statement 6
The
Management Discussion & Analysis Report (MD&A) 7
Additional
Analysis 10
References 12
To Our Stockholders:
General Public Consulting is in its second year and looking
well. It makes me exceptionally proud of
the leadership team and of all of the dedicated interns. We set some goals and have been able to meet
them despite the tough environment of the externship. The leadership teams and committed interns are
motivated to preserve this externship opportunity into the future. All team members pulled their own weight
alongside others who were working just as hard.
The team had the drive and motivation to make changes and enhance the externship
program. General Public Consulting provides an array
of services from guidance and assistance to General Public University to working with
non-profit organizations in providing assistance to further their own missions.
Extensive advertising has been done to get
information out to the public and to gather prospective clients. We collaborated with General Public Radio and have
our first over the air advertisement for General Public Consulting and we also have a
Facebook page. In the upcoming year General Public Consulting has plans to launch their website to further promote the Company. General Public Consulting has further promoted the program by developing and implementing;
Twitter, Google Plus, LinkedIn, Podio, MailChimp, and HootSuite. The likes and hits on these sites has
increased immensely since they were implemented.
General Public Consulting has worked with all of the following
companies: 101 Miles of Maine, Girl Scouts of America, Boy Scouts of America,
Modest Needs, Operation Smile, Small Business Institute, CICS Irving Park Puma
PTO, Canine, It’s Greek to Me, Fish for Life, and FLIPS to help them promote
their programs (Income by Customer, 2014). Prospective clients for the upcoming year
include; Chinese Tire, JOPPA, and Friends at Dallas Pool Center (General Public Consulting
Newsletter (c), 2014). We are excited
about our customer collaborations and have many new opportunities on the
horizon. We have been working to develop
and implement the scripts for several experiential training videos
(General Public Consulting Newsletter (a), 2014) .
We were able to successfully make the Small Business Institute (SBI) its
own independent division who is currently researching what experimental
learning other schools might have. This
research will help in the development of the Business Counselor Intern
Certification (BCIC) (General Public Consulting (b), 2014).
The budget for the month of May was right on
target. The actual expenses were under
the budgeted figures for this month and are expected to be for the month of
June as well. Forecasted income was only
slightly under budgeted figures. General Public Consulting is right on target of where they should be.
General Public Consulting has set goals and
priorities for the upcoming terms and know there is a lot of tough work
ahead. We are going to enter the next
year with momentum and energy to focus on continued growth opportunities;
excited and confident about our ability to continue improving the externship
experience.
Sincerely,
Marley Johnson, President
Balance Sheet General Public Consulting
As
of: 07/13/2014
Assets
Current Asset
Accounts
Receivable 62,495.00
Total for Current Asset 62,495.00
Bank
Owner Checking 59,284.91
General Public Finance 109,659.50
General Public Finance 109,659.50
Total for Bank 168,944.41
Total Assets 231,439.41
Liabilities
Current Liability
Accounts Payable 4,970.01
ST Payable 1,583.98
ST Payable 1,583.98
Taxes Payable 22,801.78
Total for Current Liability 29,355.77
Total Liabilities 29,355.77
Equity
Owner Investment
/ Drawings 78,118.20
Previous Year(s) Earnings (35,710.00)
Current Year Earnings 159,675.44
Total equity 202,083.64
Total Liabilities
and 231,439.41
Equity
Income Statement
General Public Consulting
Reporting period: 01/01/2014 to 07/13/2014
Gross Profit 337,571.50
Operating Expenses
Repairs & Maintenance 254.98
Computer -Software 1,831.88
Computer -Hosting 30.00
Software 900.00
Website Maintenance
322.55
Legal Fees 6,296.64
Insurance -General
Liability 14,985.00
Office Supplies 3,503.90
Utilities 6,179.80
Miscellaneous
Expense 1,124.78
Travel Expense 3,302.03
Marketing 510.00
Postage 180.00
Payroll -Salary
& Wages 131,408.97
Payroll-Tax 3,285.57
Advertising &
Promotion 3,779.96
Total
Operating Expenses 177,896.06
Net Profit 159,675.44
The Management Discussion and Analysis Report (MD&A)
Mission and Organizational Structure
The mission statement of General Public Consulting is: “to provide a wide range of services to our customers
by delivering guidance and assistance to all areas of General Public University, and to
support them in developing intern and externships for the students as they
grow. General Public Consulting will provide the best resources for our customers while
fostering an internship program that will further their skills in a business
environment. In doing so, General Public Consulting will access all of the intern’s skills
that they have learned in the General Public School of Business, making them better
qualified to enter corporate America as a highly trained professional or become
an entrepreneur. Essentially, General Public Consulting wants to deliver services to all
educational areas of General Public University, to support them in developing intern
and externships for the students as they grow. General Public Consulting will also work
with small, not for profit, businesses to provide educational resources for the
success of their futures. We want to be able to provide the best resources for
our customers by using the skills of our top School of Business students, in an
internship pro-gram that gives our customers quality service and our interns knowledge
of developing and managing a business.” (General Public Consulting Marketing Brochure,
2014).
The Company is organized with a Human Resources Department,
Finance Department and Operations Department.
Within Human Resources are the training department and the recruiting
department. The Finance Department is
comprised of the auditing department, tax department, payroll department and
the AP/AR department. The Operations
Department houses sales/marketing, information technology, consulting and the
project management office as well as the new SBI department.
Performance Goals and Results
The Company is striving to create opportunities for students
wherein they can make “real” decisions based upon their studies and learning
(Cojanu, Marley, May 12, 2013). General Public Consulting will meet and exceed its projected
sales of $395,000 for the year.
Currently the total revenues for the year are at $337,571. This is well over half of the projected sales
for the year. The company set a goal to
make SBI an independent division under the Operations Department and this goal
has been met. SBI is going strong and
doing lots of research on other schools’ experimental learning
opportunities. This research will help
lead the SBI team to reach their ultimate goal of creating a Business Counselor
Intern Certification. The Finance
Department set a goal to create an LLC to do outside financial work for
customers. This goal is being met and
will be in full swing within the next month or two. Price schedules have been created for the
work and the paperwork has been completed to create the LLC. The HR department set goals to create a
better on-boarding process for new interns.
They have worked diligently and created new documents and tracking forms
and we are excited to say that no intern was “lost” in the last group to come
in. The recruiting department is trying
many different tactics to raise the number of incoming interns to the
program.
The Company was started on July 31, 2013; financial statements
show that sales were $73,500 for 2013. Projected sales for 2014 are $395,000
(General Public Consulting, 2013). Net profit is
currently $159,675. Expenses are being
kept to a minimum and more and more clients are incoming. With the Finance Department branching out to
take on accounting customers the profit will increase even more than originally
projected. Bringing SBI’s Certification
program online will increase revenues as well.
Systems, Controls
and Legal Compliance
As the Company is operating with interns fresh with learning they
are meeting legal compliance by adhering to GAAP. The auditing department has been able to
conduct audits on all of the departments to ensure compliance with GAAP. They are happy to say that all of the
departments are meeting and/or exceeding expectations of compliance. There is a strict chain of command that
allows for communication but also allows for control of information. The IT department has diligently been working
to protect General Public Consulting’s information and has standards in place to restrict
access once an intern has graduated out of the class.
Future Effects,
Uncertainties, Risks
It is expected that certain risks may affect the future situation
of the company such as not being able to represent some clients and economic
factors (General Public Consulting, 2013). Another
major factor affecting the future of General Public Consulting is recruitment numbers. The Finance Department is made up of
accounting students and while several terms met with a high number of interns
coming into the department, the last term saw a very low number of accounting
student interns to operate and run the Finance Department.
This program is innovative and creative and it teaches students
while they are actually getting to “work” and also have some fun. The program allows for personal connections
to be made that might otherwise not have been made. The ultimate goal of the program is to make
the students ready to enter the workforce.
Having the internship listed on a student’s resume has already led to
students getting three interviews in one week once they had added the
internship experience to their resume.
Additional Analysis
With the assistance of this
spreadsheet which was created by Jerry Sherlock, Professor of Financial Statement
Analysis, I was able to predict what kind of income General Public Consulting might have
for the next five years. If expenses
remain at 52% of the income and the tax rate is 25% for all years with just a
very small growth rate of 4% General Public Consulting could see sales at over $400,000 in
the next five years.
General Public Consulting’s
financial results show the following
· Current
ratio indicates a figure of 2.13
· Net
profit margin is .47
· Return
on assets is .70
The current ratio is a measure of liquidity and
a company’s ability to quickly convert assets and securities to cash. At this point General Public Consulting definitely has
the ability to cover their liabilities.
The net profit margin is 47%. A higher net profit margin indicates that General Public Consulting is better at converting sales into profit (Wilkinson, J., 2013). In the fourth quarter of 2013 the average net
margin for a professional services industry was only 11.43% and in the second
quarter of 2014 dropped to 10.85% (Professional Services Industry (a), n.d.).
The average return on assets for the
professional services industry in fourth quarter 2013 was 9.2% and rose to
15.59% in the second quarter of 2014 (Professional Services Industry (b),
n.d). General Public Consulting certainly has a much
higher return on assets than the average in professional services.
Net profit margin and return on assets are
measures of profitability for a company.
Return on assets is extremely high. General Public Consulting is certainly using its assets to their benefit and
generating revenue. One of its greatest
assets are the interns themselves and with the vast business and accounting
knowledge of several interns put together for a common goal, this company will
grow by leaps and bounds.
Reference:
Balance Sheet. (July 13,
2014). Waveapps.
Cojanu, Marley. (May 12, 2014). Email. TOMORROW is the Last
Day to Switch to the ONLINE Internship for Real Experience!
Income by Customer.
(July 13, 2014). Waveapps.
Income Statement. (July
13, 2014). Waveapps.
General Public Consulting (2013). Annual Report.
General Public Consulting Marketing
Brochure. (2014). Retrieved from URL: http://gallery.mailchimp.com/eab8c77dfd7275691de9bd0b3/files/42f0d637-6028-4c03-99db-8d9c379a2dc5.pdf
General Public Consulting Newsletter
(a). (July 6, 2014).
General Public Consulting Newsletter
(b). (June 15, 2014).
General Public Consulting Newsletter
(c). (June 22, 2014).
General Public Consulting Newsletter
(d). (June 28, 2014).
Professional Services
Industry (a). (n.d.). Profitability by
quarter, Gross, Operating and Net Margin 2Q2014 Retrieved July 19, 2014,
from http://csimarket.com/Industry/industry_Profitability_Ratios.php?ind=908
Professional Services
Industry, (b). (n.d.). Profitability by
quarter, Gross, Operating and Net Margin 2Q2014 Retrieved July 19, 2014,
from http://csimarket.com/Industry/industry_ManagementEffectiveness.php?ind=908
Taylor, Sherlock.
(2014). Proforma Income Statements
M&A. Financial Statement Analysis.
Wilkinson, J. (2013,
July 24). Net Profit Margin Analysis. The Strategic CFO. iCal. Retrieved July
19, 2014, from http://strategiccfo.com/wikicfo/net-profit-margin-analysis/
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