The Company Board™ is a graphical presentation of the financial results of a company. Individual line items in the Income Statement and Balance Sheet are represented by colored stacks, with the scale shown at the bottom left
The smaller right side of the board is an Income Statement.
- money coming into the business is shown by the gold stacks (Sales Revenue, and sometimesOperating Adjustments)
- the direct Cost of Revenue (COGS or COS) is shown by the multi-colored stacks;
- other Expenses including SG&A, Interest, and Taxes are shown by silver stacks;
- and the Profit or Net Income is given at the bottom, represented by black stacks (or shadow stacks for a Loss>
The larger left side of the board is a Balance Sheet.
- silver represents Cash, Receivables and other (non-inventory) Current Assets. Receivables are automatically calculated to their position on Days Sales Outstanding.
- the value of Inventories is shown by the multi-colored stacks along the blue arc;
- so the silver and multi-colored stacks represent the Current Assets
- and Fixed Assets are shown as copper stacks on the left.
The total amount of these silver, multi-colored, and copper stacks represents the Total Assets, and is equal to the combined total of Liabilities and Equity:
- red stacks in the red area of the Balance Sheet represent Short-Term Debt (Current Liabilities)and Long-Term Debt. The stacks nearer to the Cash area are the short-term liabilities coming due within the year;
- black stacks in the black corner of the Balance Sheet represent different sources of Equity.
We teach business acumen workshops. The very rapid visualization of a company’s finances is useful in the classroom, to connect the game board learning back to the client’s real world. And it is useful after the classroom, to refresh the intellectual learning and the experience of the business simulation.
But the Company Board is useful even if you have never participated in an Income/Outcome business simulation. The real power of the Company Board is that it simplifies the presentation of complex ideas. Everyone is used to seeing financial statements as columns of numbers, and if the fear of finance is present, it can be difficult to overcome. The Company Board provides a new, different, way to approach that same information.
The next post will talk about extracting useful information from the Company Board.