BFS-20

District Event #1

CAREER CLUSTER
Finance

CAREER PATHWAY
Corporate (Business) Finance

INSTRUCTIONAL AREA
Financial Analysis

BUSINESS FINANCE SERIES EVENT

PARTICIPANT INSTRUCTIONS

 The event will be presented to you through your reading of the 21st Century Skills, Performance
Indicators and Event Situation. You will have up to 10 minutes to review this information and
prepare your presentation. You may make notes to use during your presentation.
 You will have up to 10 minutes to make your presentation to the judge (you may have more than one
judge).
 You will be evaluated on how well you demonstrate the 21st Century Skills and meet the
performance indicators of this event.
 Turn in all of your notes and event materials when you have completed the event.

21st CENTURY SKILLS

 Critical Thinking – Reason effectively and use systems thinking.

 Problem Solving – Make judgments and decisions, and solve problems.
 Communication – Communicate clearly.
 Creativity and Innovation – Show evidence of creativity.

PERFORMANCE INDICATORS

 Discuss the analysis of a company’s financial situation using its financial statements.
 Extract relevant information from written materials.
 Describe the need for financial information.
 Interpret business data correlations.
 Draw conclusions based on information analysis.

Published 2020 by DECA Inc. Copyright © 2020 by DECA Inc. No part of this publication may be reproduced for resale or posted 1
online without written permission from the publisher. Printed in the United States of America.
 BFS-20
District Event #1

EVENT SITUATION

You are to assume of the role of the manager of GENESIS ELECTRONICS, a small electronics business that
sells mobile phones, desktop computers, and laptops. The owner of the business (judge) wants you to
analyze the inventory account by calculating the inventory turnover ratio and suggest improvements.

The owner (judge) wants you to analyze the monthly performance of the company and focus on
inventory. You will analyze the inventory account by calculating the inventory turnover ratio for each
product. The formula is:
Cost of Goods Sold/((Beginning Inventory + Ending Inventory)/2)
This ratio shows how many times on average a product is sold over a period of time.

You are to meet with the owner (judge) to discuss the results and explain how the ratio can be improved.
The company’s partial income statement and partial balance sheet for the first quarter are below.
Genesis Electronics
Partial Balance Sheet Genesis Electronics
Quarter 1 Partial Income Statement
For Period Ending Quarter 1
Beginning Ending
QTR 1 QTR 1 Desktop
Assets Cell Phones Computers Laptops
Current Assets Sales 345,232 124,432 463,225
Cash 35,042 54,922 COGS 124,754 64,532 254,366
A/R 26,943 25,231 Gross Profit 220,478 59,900 208,859
Inventory
Cell Phones 10,321 12,341
Desktop Computers 28,312 25,121
Laptops 24,012 30,212
Total Current Assets 124,630 147,827

You must:
• Calculate inventory turnover for each product: cell phones, desktop computers and laptops
• Meet with the owner (judge) to explain the meaning of the results
• Based on the results, explain how the ratio can be improved

You will present your ideas to the owner (judge) in a role-play to take place in the owner’s (judge’s)
office. The owner (judge) will begin the role-play by greeting you and asking to hear your ideas. After
you have presented ideas and have answered the owner’s (judge’s) questions, the owner (judge) will
conclude the role-play by thanking you for your work.

Published 2020 by DECA Inc. Copyright © 2020 by DECA Inc. No part of this publication may be reproduced for resale or posted 2
online without written permission from the publisher. Printed in the United States of America.
 BFS-20
District Event #1

JUDGE INSTRUCTIONS

DIRECTIONS, PROCEDURES AND JUDGE ROLE

In preparation for this event, you should review the following information with your event manager and
other judges:
1. Procedures, 21st Century Skills and Performance Indicators
2. Event Situation
3. Judge Role-Play Characterization
Allow the participants to present their ideas without interruption, unless you are asked to
respond. Participants may conduct a slightly different type of meeting and/or discussion with you
each time; however, it is important that the information you provide and the questions you ask be
uniform for every participant.
4. Judge Evaluation Instructions and Judge Evaluation Form
Please use a critical and consistent eye in rating each participant.

JUDGE ROLE-PLAY CHARACTERIZATION

You are to assume of the role of the owner of GENESIS ELECTRONICS, a small electronics business that
sells mobile phones, desktop computers, and laptops. You want the manager (participant) to analyze the
inventory account by calculating the inventory turnover ratio and suggest improvements.

You want the manager (participant) to analyze the monthly performance of the company and focus on
inventory. The manager (participant) will analyze the inventory account by calculating the inventory
turnover ratio for each product. The formula is:
Cost of Goods Sold/((Beginning Inventory + Ending Inventory)/2)
This ratio shows how many times on average a product is sold over a period of time.

The manager (participant) will meet with you to discuss the results and explain how the ratio can be
improved. The company’s partial income statement and partial balance sheet for the first quarter are
below.

Published 2020 by DECA Inc. Copyright © 2020 by DECA Inc. No part of this publication may be reproduced for resale or posted 3
online without written permission from the publisher. Printed in the United States of America.
 BFS-20
District Event #1

Genesis Electronics
Partial Balance Sheet Genesis Electronics
Quarter 1 Partial Income Statement
For Period Ending Quarter 1
Beginning Ending
QTR 1 QTR 1 Desktop
Assets Cell Phones Computers Laptops
Current Assets Sales 345,232 124,432 463,225
Cash 35,042 54,922 COGS 124,754 64,532 254,366
A/R 26,943 25,231 Gross Profit 220,478 59,900 208,859
Inventory
Cell Phones 10,321 12,341
Desktop Computers 28,312 25,121
Laptops 24,012 30,212
Total Current Assets 124,630 147,827

The manager (participant) must:

• Calculate inventory turnover for each product: cell phones, desktop computers and laptops
• Meet with you to explain the meaning of the results
• Based on the results, explain how the ratio can be improved

The participant will present information to you in a role-play to take place in your office. You will begin
the role-play by greeting the participant and asking to hear about his/her ideas.

During the course of the role-play, you are to ask the following questions of each participant:

1. Why is inventory turnover information important?

2. Why do you think desktop computers are selling slower than the other products?

Once the manager (participant) has presented information and has answered your questions, you will
conclude the role-play by thanking the manager (participant) for the work.

You are not to make any comments after the event is over except to thank the participant.

Published 2020 by DECA Inc. Copyright © 2020 by DECA Inc. No part of this publication may be reproduced for resale or posted 4
online without written permission from the publisher. Printed in the United States of America.
 BFS-20
District Event #1

SOLUTION

1. Calculate inventory turnover for each product: cell phones, desktop computers and laptops
Product Calculation Answer
Cell Phones 124,754/((10,321+12,341)/2) 11.01
Desktop Computers 64,532/((28,312+25,121)/2) 2.42
Laptops 254,366/((24,012+30,212)/2) 9.38

2. Meet with the owner to explain the meaning of the results

The goal is to increase the number of times a product is sold in the period. Therefore, a higher inventory
turnover is better. These results show that on average, the cell phones are selling faster during the
period than the other two products. The desktop computers are selling the slowest.

3. Based on the results, explain how the ratio can be improved

To increase inventory turnover, the company would need to increase Cost of Goods Sold by selling
more inventory. Ways to increase sales include lowering price and increasing marketing efforts. Another
way to increase the turnover rate is to reduce the amount of inventory on hand. Safety stock should be
analyzed for effectiveness and just in time inventory methods might be employed.

Published 2020 by DECA Inc. Copyright © 2020 by DECA Inc. No part of this publication may be reproduced for resale or posted 5
online without written permission from the publisher. Printed in the United States of America.
 BFS-20
District Event #1

EVALUATION INSTRUCTIONS

The participants are to be evaluated on their ability to perform the specific performance indicators stated
on the cover sheet of this event and restated on the Judge’s Evaluation Form. Although you may see
other performance indicators demonstrated by the participants, those listed in the Performance Indicators
section are the critical ones you are measuring for this particular event.

Evaluation Form Interpretation

The evaluation levels listed below and the evaluation rating procedures should be discussed thoroughly
with your event director and the other judges to ensure complete and common understanding for judging
consistency.

Level of Evaluation Interpretation Level

Exceeds Expectations Participant demonstrated the performance indicator in an extremely

professional manner; greatly exceeds business standards; would rank in the
top 10% of business personnel performing this performance indicator.

Meets Expectations Participant demonstrated the performance indicator in an acceptable and

effective manner; meets at least minimal business standards; there would
be no need for additional formalized training at this time; would rank in the
70-89th percentile of business personnel performing this performance
indicator.

Below Expectations Participant demonstrated the performance indicator with limited

effectiveness; performance generally fell below minimal business
standards; additional training would be required to improve knowledge,
attitude and/or skills; would rank in the 50-69th percentile of business
personnel performing this performance indicator.

Little/No Value Participant demonstrated the performance indicator with little or no

effectiveness; a great deal of formal training would be needed
immediately; perhaps this person should seek other employment; would
rank in the 0-49th percentile of business personnel performing this
performance indicator.

Published 2020 by DECA Inc. Copyright © 2020 by DECA Inc. No part of this publication may be reproduced for resale or posted 6
online without written permission from the publisher. Printed in the United States of America.
 BFS-20
District Event #1

BUSINESS FINANCE SERIES

2020

JUDGE’S EVALUATION FORM Participant: __________________________

DISTRICT EVENT #1
ID Number: __________________________
INSTRUCTIONAL AREA:
Financial Analysis

Did the participant: Little/No Below Meets Exceeds Judged

Value Expectations Expectations Expectations Score
PERFORMANCE INDICATORS
Discuss the analysis of a company’s
1. financial situation using its financial 0-1-2-3-4 5-6-7-8 9-10-11 12-13-14
statements?
Extract relevant information from
2. 0-1-2-3-4 5-6-7-8 9-10-11 12-13-14
written materials?
Describe the need for financial
3. 0-1-2-3-4 5-6-7-8 9-10-11 12-13-14
information?
Interpret business data
4. 0-1-2-3-4 5-6-7-8 9-10-11 12-13-14
correlations?
Draw conclusions based on
5. 0-1-2-3-4 5-6-7-8 9-10-11 12-13-14
information analysis?
21st CENTURY SKILLS
Reason effectively and use systems
6. 0-1 2-3 4 5-6
thinking?
Make judgments and decisions, and
7. 0-1 2-3 4 5-6
solve problems?
8. Communicate clearly? 0-1 2-3 4 5-6

9. Show evidence of creativity? 0-1 2-3 4 5-6

Overall impression and responses
10. 0-1 2-3 4 5-6
to the judge’s questions
TOTAL SCORE

Published 2020 by DECA Inc. Copyright © 2020 by DECA Inc. No part of this publication may be reproduced for resale or posted 2
online without written permission from the publisher. Printed in the United States of America.