Final Capsim Quiz Flashcards
Four Issues that concern the finance department
-Acquiring capitol to expand companies’ assets
-Driving the financial structure of the firm
-Selecting and monitoring performance measures
-Establishing a dividend policy that maximizes return to share holders
Three ways to add and raise capitol
-Current Debt (Bank loans)
-Stock Issue
-Bond issue (long term debt)
Interest rate and date current debt is paid off
-Yearly interest rate
-Paid off January 1 of next round
What is the cap criteria for long term debt
-80% of last years fixed assets
Ways to subtract funds
-Retire Stocks
-Retire Bonds
% of stocks you can retire each round
5% of total outstanding shares
Fee to retire bonds early
1.5%
What do dividends affect
Stock Price
Benefits of issuing dividends
-Increase your ability to raise capital on investments
When may you have to take out an emergency loan
when company runs out of cash
Interest rate on emergency loan
7.5% above current years rate
Four criteria that sets stock price
Book Value (total equity)
Earnings Per Share
Dividends Per Share
Emergency loans (negative impact)
What happens of dividends are set higher then this years EPS
Stock Price goes down
Effects of exchange rate
1% transaction fee
appears on cash flow as “effect of exchange rate changes”
4 pillars of the balanced scorecard FINANCE
Profit - 10
Return on assets - 5
Market Cap % - 5
Debt/assset ratio - 5
4 pillars of the balanced scorecard CUSTOMER
Product Design Score – 10
Awareness – 5
Accessibility – 5
Market Penetration – 5
4 pillars of the balanced scorecard INTERNAL BUSINESS PROCESS
Contribution Margin – 10
Capacity Utilization - 5
Market Share - 5
Market Share Growth - 5
4 pillars of the balanced scorecard LEARNING AND GROWTH
Employee Turnover - 10
Profit/Employee - 5
Market Price/Employee – 5
Sales/Employee – 5
How are scores determined in the 4 pillars
based on how closely you come to achieving the goals set for you each round
Effects of adding a region kit
+ 10% demand boost
+ 3m development time
+ 15% material cost per unit
% that awareness decreases each round
33%
% of accessibility you lose each round
33%
Two forecasting formulas
Last year’s market share * current round segment size
Last year’s potential sale * growth rate
increasing service life by 1,000 hours does what?
$.30 to material cost
New unit of capacity cost
$6 for floor space + $4 * automation raiting
does changing the products service life or adding a region effect affect perceived age
NO
Cost to increase automation by one point
$4
Length of a bond
10 years
Brokerage fee when issuing a bond
5%
What is the cap criteria for bond holder lending amounts
80% of the value of plant and equipment
How are interest rates for newly issued bonds determined
current debt interest rates + 1.4%
How do you calculate demand
Your products scores/ total of competitors product scores
What are current debt interest rates based on
debt to asset ratio
How to calculate working capitol
current assets - current liabilities
How is 90 days of sales calculated
90/360
how is excess working capital calculated
working capital - 90 days of sales
Criteria for max investment in production plant
depends on capitol budget limit
capital budget limit calculation
max amount of money that can be raised through stock and bond issues
+
Excess working capitol
-
Stock dividends in current year
Profit sharing % with employees
2%
what happens if the product service life fall below 1,000 hours of the segments guidelines
- 20% to customer satisfaction score
-for every 1,000 hours below
max number of stocks that can be issued criteria
20% of your company’s outstanding shares in that year
book value calculation
equity
divided by
shares outstanding
how is equity calculated
common stock and retained earning values listed on balance sheet
