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Contribution Margin
- Sales less Variable Costs
- sales-variable costs= contribution margin
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Margin Percentage
- Contribution Margin / Sales= Margin Percentage
- Contribution Margin divided by sales=
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Variable Costs
Expenses that are tied to the sale of each unit.
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Period Costs
People that are not tied directly to the cost of producing a unit--administration, salespeople, managers for example.
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Net Margin
Contribution Margin - Period Costs
Put simply, it is what the product contributes towards profits.
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Emergency Loan
In the real world emergency loans do not exist. When you run out of cash, you have "a liquidity crisis", "Chapter 11", or simply "Bankruptcy" on your hands.
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Working Capital
Current Assets - Current Liabilities
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Current Ratio
Current Assets / Current Liabilities = (Cash + A/R + Inventory) / (A/P + Current Debt)
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Days of Working Capital
Working Capital / (Sales/365)
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Forecasting
Your ability to forecast demand, build adequate inventories to satisfy demand, and yet not accumulate excessive inventory
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Promotion
Driven by your promo budget, creates product awaremeness before customers shop. If customers are not aware of the product, they will not buy.
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Place
Driven by your sales budget. It examines the question, "How easy is it for customers to work with you during and after the sale?"
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Productivity
- the productivity of your workforce through the course of the simulation.
- (add more)
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Financial Structure Category
Financial structure of your (a) company--its relationship between debt and equity. (Liabilities, or debt vs. stockholder's equity)
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Leverage
Total Assets / Total equity (according to CapSim)
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Assets
The property, plant, and equipment of "the Company," and they are listed on the left side fo the balance sheet.
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Liabilities and Owner's Equity
the right side represent the people who paid for he Assets and their current stake (on those assets)
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The Financial Structure of the firm is the relationship between _____ and _____. The relationship is called "______" because stockholders are matching their equity with debt to create a bigger company.
Debt and Equity. "Leverage"
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Sides of the Balance Sheet
The left is "what is owned," and the right is "who owns it."
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EBIT
(Earnings before interest and taxes)
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ROE (Return on Equity)
EPS=Profits / Equity= Profits / Assets * Assets / Equity= ROA * Leverage
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EPS (Earnings Per Share)
EPS= Profits / Shares Outstanding
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Cumulative Profits
The sum of all company profits
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Cumulative Free Cash Flow
Cumulative Free Cash Flow = the sum of all the Free Cash Flows since you took over management of the company.
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Market Capitalization
Market Capitalization = the current value of your stock price times shares outstanding
-or-
Current value of stock price * Shares Outstanding
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ROS (Return on Sales)
Net profit, generated each year, divided by total sales for the same period.
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Turnover
Turnover = Sales, generated in a particular year, divided by the value of total assets for the same period.
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