annual report sample design (financial statements)

Ferrari Company: Making a Mark

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developed as of Year FOUR

Ferrari carries with it, the reputation of having the highest

standards of quality in service. This Year, Ferrari has made a

mark in the real estate industry.

Cont

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CEO letter 1

President’s Report 2

Financial Highlights 3

Management Discussion and Analysis 4

Financial Statements

Statement of Financial Performance 5

Statement of Financial Position 6

Statement of Changes in Equity 7

Statement of Cash Flows 8

Notes to Financial Statements 9

Certification of Financial Statements 18

Contact Information 19

Making a Mark ! 004

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lumber yard door in the back of a friend's

music store. Why is this important? Because

while the door and file cabinets are no longer,

the “humble” has remained.

We are not loud nor are we boastful. We

treat each other as each of us would like to

be treated. Every individual in the firm must

be treated with the same dignity and respect,

regardless of their position.

Decisions are made by consensus; it takes a

little more time but it works. Opinions must be

grounded in logic and fact. All opinions are

considered equally. Ferrari is living proof that

it is indeed quite achievable.

The bottom line is that we are a uniquely

entrepreneurial company. We own and/or

manage rental apartments assisted living

facilities.

Our growth is based upon trust. Because we

have no ownership in the properties we

recommend, our clients know that we always

present the best real estate opportunity

available. With Ferrari, there is no conflict of

interest; what is best for you is our only

interest. Nothing excites us more than to

provide the platform for an individual to

blossom in the career of his or her choosing.

Ty M. Bollinger

CEO

Focus on Core Property Business

The company sees large opportunities for

expansion in this sector with the huge gap

that remains between supply and demand in

housing. For the , Ferrari is set to launch two

more buildings covering the affordable,

middle and high-end segments. These are

the new properties in St. James Place and in

Tennessee Avenue. To be able to reach new

markets, Ferrari will continue to enhance its

leisure developments.

The opening of these properties should see

stronger contributions for the next years and

beyond. We will continue to deliver

shareholder value through the acceleration of

growth of our businesses and diversification

in more high-value-added endeavors but with

the fiscal discipline to ensure that your money

is well spent.

Our “portfolio” approach is also about people

– not just technology – so we create custom

teams for each client.. At Ferrari, we believe

in the personal approach. Taking the time to

know our clients and understand their

business is critical to helping them achieve

their goals, and ours.

Ferrari Company’s management and staff will

continue to work together as a team. The

Company remains financially prudent but at

the same time ready to take advantage of

opportunities when they arise.

Outlook for the Next Years

Ferrari's beginning was humble, indeed. Two

rusty file cabinets holding an unpainted,

.

01 Year 4 Annual Report

Ferrari Real Estate Company

The secret behind staying power is foresight. Through the years, the Company has stayed

attuned to the ebb and flow of business, expanding in areas where it perceives strength

and making strategic investments and alliances at the right time. Armed with this business

acumen, the Company is in excellent shape for long-term growth and competitiveness.

Ferrari have a solid decision making philosophy, and we hold each of our

business lines to high standards of achievement. But those factors alone do not

account for what we have become; there are numerous companies with humble

origins that ultimately flourish, in most cases through the addition of outside

equity capital. But, Ferrari has a unique culture for growth; not only revenue

growth, but also individual growth.

In assessing the potential of each property, it is clear that a majority of the

company’s value lies in a handful of assets. Accordingly, our team is sharply

focused on maximizing the potential value of these key assets while monitoring

opportunities to selectively monetize those less impactful assets at appropriate

timing and pricing. We have successfully reached our goals to build our

properties efficiently in the orange monopoly.

We recognize that we will never be able to fully predict what might go wrong or

when another increase in rentals might strike. We also recognize that

diversification is important. Our asset base lacks geographical diversity, but

concentrated in one of the most desirable markets. Still, this location of our asset

class affords us valuable flexibility to focus on those market and product specific

opportunities that make sense at any given time in an economic cycle.

In the following pages, we have thoroughly discussed the financial condition and

performance of our company. This is to let our shareholders be a part of our

progression. We undertake an in-depth analysis of our strengths and

weaknesses, as well as the external factors which we can not control.

Nevertheless, Ferrari continues to be one of the strongest real estate company

for registering persistent higher income.

The Ferrari Company is synonymous with the relentless pursuit of achievement.

We are inspired by that legacy and are systematically and strategically

positioning our portfolio. While we are at the start of a long journey together, we

look forward to continuing to earn your trust as we confront the many challenges

ahead. Progression is our Destination.



Progression is our Current Destination.

Angelie De Ramos

President

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Year1 Year 2 Year 3 Year 4

Assets

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Year 1 Year 2 Year 3 Year 4

Net Income

Expenses

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Financial Position

Financial Performance

Rental Revenue

Salary Revenue

Dividend Revenue

Miscellaneous

Rent Expense

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Tax expense

Revenue Breakdown

Expense Breakdown



Management Discussion and Analysis

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Total revenue attributable to the operations and rentals of the

Ferrari Company stood at M 4,254 representing a 94% increase

over the previous year, given improved market conditions in the

local economy and the development of our real estates.

Total Group revenues consisting of net interest income, other

operating income, and dividend income reached M 4,943 or 76%

higher than the M 2806 registered in year 3. Other operating

income comprised income from salaries, dividend income and

miscellaneous income increased by 12% to M 689 from last

year’s M 614.

Total operating expenses of the Group grew by 272% to M 2892

from M 778, mainly driven by the M 1,934 increase in the rent

expense. The material components of total operating expenses

are rent expenses and depreciation expenses which accounted

for a 287% increase and 29% increase respectively.

Miscellaneous expenses are incurred this year, amounting to M

150.

Provision for income tax for year three was corrected; income

tax accrued was overstated by M 631.2. Effective income tax

rate of the Group was at 30% above M 2000 with an additional

fixed tax expense of M 300 Thus, the company incurred a tax

expense of M 315.3 for year four.

Given the improvement in net profits for the year, Return on

Average Equity was 31%; return on Average Assets was at 26%.

For the year 4, Ferrari paid the amount of total cash dividends of

M100 declared in Year 3.

Results of Operation

Financial Condition

The Ferrari Company closed the third year with total assets of M

8,274.20 or 56% higher than the figure reported in the third year.

The growth was driven by the M 2700 increase in receivables

and the development of productive properties in the orange

monopoly. At year-end, cash on hand stood at M 970.2. The

decrease in the cash balance of the company was due to the

increased rental payments to other companies. With the

continued push for profitable investments, M 400 cash was

invested in equity securities to earn returns.

Receivables recorded a total of M 4,200. This was mainly driven

by the strong demand in the orange group monopoly. The

consumer book, in which Hat Spring and Titanic Company has

been our avid customers, was bolstered by steady demand

across the housing and other real estate plans. Capital rose by

19% due to an investment of M 440 from other companies. This

proves that more companies invested this year compared to last

year.



Financial Position


Ferrari Company

Statement of Financial Position

As of Game Year-Ended Month 13, Year 4

Assets Note Year 4 Year 3 Year 2 Year 1

Cash on Hand M 970.20 M 1,139.60 M 1,133.80 M 1,162.00

Receivables 4,200.00 1,514.00 0 0

Property and Buildings 2 1,904.00 1,838.00 1,342.00 920.00

Investment in Equity Securities 3 1,200.00 800.00 400.00 0

Total Assets M 8,274.20 M 5,291.60 M 2,875.80 M 2,082.00

Liabilities and Shareholders’ Equity

Liabilities

Trade and other Payables 4 M 1,215.30 M 1,039.60 M 43.20 M 58.20

Total Liabilities 1,215.30 1,039.60 43.20 58.20

Equity

Contributed Capital 2,791.00 2,351.00 1,920.00 1,500.00

Retained Earnings 4,267.90 1,901.00 912.60 523.80

Total Equity 7,058.90 4,252.00 2,832.60 2,023.80

Total Liabilities and Equity M 8,274.20 M 5,291.60 M 2,875.80 M 2,082.00



Financial Performance


Ferrari Company Statement of Financial Performance

For the Game Year-Ended Month 13, Year 4

Total Revenue Year 4 Year 3 Year 2 Year 1

Rent Revenue M 4,254.00 M 2,192.00 M 26.00 M 100.00

Salary Revenue 600.00 600.00

600.00 600.00

Miscellaneous Revenue 75.00 0

130.00 30.00

Dividend Revenue 14.00 14.00

Total Income M 4,943.00 M 2,806.00 M 756.00 M 730.00

Total Expense:

Rent Expense M 2,608.00 M 674.00 M 156.00 M 148.00

Miscellaneous Expense 150.00 0

150.00 0

Depreciation Expense 134.00 104.00

18.00 0

Total Expense M 2,892.00 M 778.00

324.00 148.00

Income before Tax M 2,051.00 M 2,028.00 M 432.00 M 582.00

Less: Income Tax Expense 315.30 939.60

43.20 58.20

Net Income M 1,735.70 M 1,088.40 M 388.80 M 523.80



Shareholders’ Equity


Ferrari Company Statement of Changes in Shareholders’ Equity For the Game Year-Ended Month 13, Year 4

Note Year 4 Year 3 Year 2 Year 1

Contributed capital, start of turn 1 M 2,351.00 M 1,920.00 M 1,500.00 M 1,500.00

Additional Contributed Capital 5 440.00 431.00 420.00 0

Contributed capital, turn 13 M 2,791.00 M 2,351.00 1,920.00 1,500.00

Retained Earnings, turn 1 1,901.00 912.60 523.80 523.80

Correction of Error – prior year accrued

expenses overstatement 6

631.20

Corrected beginning balance 2,532.20

Net Income 1,735.70 1,088.40 388.80 0

Dividend Declared 0 (100.00) 0 0

Retained Earnings, turn 13 M 4,267.90 1,901.00 912.60 523.80

Balances, turn 13 M 7,058.90 M 4,252.00 M 2,832.60 M 2,023.80



Cash Flows


Ferrari Company Statement of Cash Flows For the Game Year-Ended Month 13, Year 4

Cash flow from Operating Activities Year 4 Year 3 Year 2 Year 1

Received from Passing Go M 600.00 M 600.00 M 600.00 M 600.00

Received from Rentals 1,554.00 692.00 26.00 100.00

Received from investment securities 28.00 0 0 0

Received from Miscellaneous 75.00 0 130.00 30.00

Paid for Rentals (1708.00) (674.00) (156.00) (148.00)

Paid for Miscellaneous (150.00) 0 (150.00) 0

Payment for Income Tax (308.40) (43.20) (58.20) 0

Net Cash flows provided by Operating Activities M 90.60 M 574.80 M 391.80 M 582.00

Cash flow from Investing Activities

Payment for the Acquisition of Land 0 0 (220.00) (920.00)

Sale of Property 0 0 80.00 0

Payment for Investing (400.00) (400.00) (400.00) 0

Payment for Building Houses (200.00) (600.00) (300.00) 0

Net Cash flows provided by Investing Activities M (600.00) M (1,000.00) M (840.00) M (920.00)

Cash flow from Financing Activities

Received from Investment 440.00 431.00 420.00 0

Paid for Dividends (100.00) 0 0 0

Net Cash flows provided by Financing Activities M 340.00 M 431.00 M 420.00 M 0

Net Change in Cash for the Year (169.40) 5.80 (28.20) (338.00)

Beginning Cash 1,139.60 1,133.80 1,162.00 1,500.00

Ending Cash M 970.20 M 1,139.60 M 1,133.80 M 1,162.00

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