Bus Fund Vocab

  1. Contribution Margin
    • Sales less Variable Costs
    • sales-variable costs= contribution margin
  2. Margin Percentage
    • Contribution Margin / Sales= Margin Percentage
    • Contribution Margin divided by sales=
  3. Variable Costs
    Expenses that are tied to the sale of each unit.
  4. Period Costs
    People that are not tied directly to the cost of producing a unit--administration, salespeople, managers for example.
  5. Net Margin
    Contribution Margin - Period Costs

    Put simply, it is what the product contributes towards profits.
  6. 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.
  7. Working Capital
    Current Assets - Current Liabilities
  8. Current Ratio
    Current Assets / Current Liabilities = (Cash + A/R + Inventory) / (A/P + Current Debt)
  9. Days of Working Capital
    Working Capital / (Sales/365)
  10. Forecasting
    Your ability to forecast demand, build adequate inventories to satisfy demand, and yet not accumulate excessive inventory
  11. Promotion
    Driven by your promo budget, creates product awaremeness before customers shop. If customers are not aware of the product, they will not buy.
  12. 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?"
  13. Productivity
    • the productivity of your workforce through the course of the simulation.
    • (add more)
  14. Financial Structure Category
    Financial structure of your (a) company--its relationship between debt and equity. (Liabilities, or debt vs. stockholder's equity)
  15. Leverage
    Total Assets / Total equity (according to CapSim)
  16. Assets
    The property, plant, and equipment of "the Company," and they are listed on the left side fo the balance sheet.
  17. Liabilities and Owner's Equity
    the right side represent the people who paid for he Assets and their current stake (on those assets)
  18. 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"
  19. Sides of the Balance Sheet
    The left is "what is owned," and the right is "who owns it."
  20. EBIT
    (Earnings before interest and taxes)
  21. ROE (Return on Equity)
    EPS=Profits / Equity= Profits / Assets * Assets / Equity= ROA * Leverage
  22. EPS (Earnings Per Share)
    EPS= Profits / Shares Outstanding
  23. Cumulative Profits
    The sum of all company profits
  24. Cumulative Free Cash Flow
    Cumulative Free Cash Flow = the sum of all the Free Cash Flows since you took over management of the company.
  25. Market Capitalization
    Market Capitalization = the current value of your stock price times shares outstanding


    Current value of stock price * Shares Outstanding
  26. ROS (Return on Sales)
    Net profit, generated each year, divided by total sales for the same period.
  27. Turnover
    Turnover = Sales, generated in a particular year, divided by the value of total assets for the same period.
Card Set
Bus Fund Vocab
The 27 terms to know