Run 1: Complete the simulation on your own and with a credit limit of 3.2 M. Completion due date: Nov 17.
Run 2: Complete the simulation with the help of my cash management tool and with a credit limit of 3 M. Completion due date: 11/24. Ten new opportunities will be presented in three phases for students to select. Students are required to select at least one opportunity in each phase.
FIN500 – Working Capital Simulation
Working Capital Simulation: Managing Growth –
Authored By Sandeep Dahiya
Distributed by Harvard Business Publishing
Acting as the CEO of a small company called Sunflower Nutraceuticals (SNC), students choose to invest in growth and cash-flow improvement opportunities in three phases over 10 simulated years. Each opportunity has a unique financial profile and students must analyze effects on working capital. Examples of opportunities include taking on new customers, capitalizing on supplier discounts, and reducing inventory. Students must understand how the income statement, balance sheet, and statement of cash flows are interconnected and consider the possible effects of each opportunity on the firm’s financial position. The company operates on thin margins with a constrained cash position and limited available credit. Students must optimize use of “internal” and external credit as they balance the desire for growth with the need for maintaining liquidity. Learning Objectives:
Walk the tightrope between growth and illiquidity. Appreciate how attention to cash management techniques is critical to managing a firm effectively. Learn to maximize a firm’s growth opportunities in a limited-credit environment. Subjects Covered:
Accounting; Cash flow; Cash flow statements; Credit management; Entrepreneurial finance; Entrepreneurial management; Finance; Growth strategy; Small Business Administration; Working capital Setting:
Background of the Simulated Firm – SNC is a privately held distributor based in Miami, Florida, and founded in 2006. SNC started as an internet-based, direct-to-consumer distributor and retailer of dietary supplements, including vitamins, minerals, and herbs for women, with product offerings for all age groups. Through its web site and catalog, SNC offers customers a large selection of stock keeping units (SKUs) from more than 50 third-party brands. The company ambitiously expanded into new retail outlets and launched several private-label brands. SNC is breaking even, with relatively flat annual sales growth on total revenues of $10 million. The business is working-capital intensive, and margins are generally thin.
Accept or Decline a new business opportunity. There are multiple business opportunities presented over 9 years. KEY CONSIDERATION
Consider the effects on working capital that each opportunity presents and whether those effects can be funded. SNC has a revolving-credit facility constraint that cannot be relaxed: the firm can draw up to $3.2 million from this credit facility. Violation of the credit constraint ends the simulation game by forcing SNC into bankruptcy. Several times during the past few years, the company was not sure how it would finance the payroll, given the firm’s constrained cash position. The company’s line of credit was overdrawn more than once in the past, so that another violation cannot be accepted. Current Balance Sheet
Current Income Statement
Current Cash Flows Statement
Opportunity 1: Acquire a new customer
SNC is considering adding Atlantic Wellness, a large, successful health food chains as a new corporate customer. Taking on this customer would immediately increase sales by $4 million per year.
Opportunity 2: Leverage supplier discount
SNC is also considering working with Atlantic Wellness on a half-size contract with an incremental sales benefit of $2 million. In addition, the supplier for Atlantic Wellness is offering very favorable payment terms: 2/30 net 60. SNC could lower its accounts payables by paying within 30 days and realizing a 2% discount on raw materials.
Opportunity 3: Tighten accounts receivable
SNC is considering dropping Super Sports Center from its customer base. This customer takes almost 200 days to pay its invoices. Sales would decrease by $2 million when this customer is dropped, however the cash flow measure of days sales outstanding will quickly improve.
Opportunity 4: Drop poor selling products
SNC is planning to review the order frequency of individual products (SKUs) for the past 12 months. Although SNC carries more than 100 different SKUs, certain types of products are not everyday purchases for most customers, so those items take up space in the physical inventory but have a low turnover. Eliminating those items will decrease sales by $1 million, and lower the day sales of inventory. Etc…
There are 10 opportunities together.
HOW TO BEGIN
You register at the link I gave to the class. When you are in your account, you will see a PREPARE tab. There, read the How to play instruction, and listen to the video.
The instructions under the PREPARE tab are:
Then, move to the next tab, ANALYZE – Dashboard, where you see the current status (which I showed in class). And then move on the next tab, see everything on the screen etc.. , and move all the way to DECIDE where you make decisions. Technical Support Information
Working Capital Simulation: Managing Growth – Harvard Business Publishing By Sandeep Dahiya
1) Technical Support Information. You may need technical support when you start. Harvard Publishing Customer Service Technical Support team is available to answer any of your setup questions or assist your students with simulation registration. They can be reached at 1-800-810-8858 until 8PM ET today. They can also be e-mailed at email@example.com.
2) A FIX for Potential Technical Problems when Starting a ReRun There is sometimes a bug in the simulation that’s not allowing students to start new runs unless they clear their browser cache each time they want to start a new run. The Harvard Business Publishing teams are working on a permanent solution, but in the meantime, the workaround is to delete the browser’s history and then restart the browser. If you cannot start a new run, please give these steps a try:
1. Delete entire browsing history, sometimes referred to as cache & cookies. This link explains how to clear your browser’s cache : http://www.wikihow.com/Clear-Your-Browser%27s-Cache
2. Close out of every single window of your browser so that no browser windows remain open.
3. Open up a new window of your browser, go to http://hbsp.harvard.edu/ and sign in your username and password and once logged in click on My Library on the right, then click on Financial Information and Management under the heading of Courses on the left and finally click Run Simulation in the bottom right to launch the simulation.
Why Work With StudyAcer
Quality Researched Papers
We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.
We have hired a team of professional writers experienced in academic and business writing. Most of them are native speakers and PhD holders able to take care of any assignment you need help with.
If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account.
All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. We will always strive to deliver on time.
Original & Confidential
We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text.
24/7 Customer Support
Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.
No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.
An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.
Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.
If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied.