In this simulation, participants act as the CEO of Sunflower Nutraceuticals. They try to maximize the value of the company, by managing investment in a variety of growth and cash-flow improvement opportunities during three phases over a nine-year period.
Over the simulated years, participants experiment balancing the desire for growth with the need for maintaining liquidity, by considering the effects of each opportunity on the firm’s financial position.
Each opportunity has a unique financial profile that participants must assess. Opportunities range from taking on new large customers to capitalizing on supplier discounts to moving raw-materials sourcing to overseas suppliers. As part of the decision-making process, participants consider the effects on working capital that each opportunity presents. External funding is also available through a bank line of credit that is limited in its size and availability.
This simulation highlights the benefits of managing working capital effectively in a growing firm. Participants develop their intuition in how to use working capital as an internal funding source, especially when other sources of funding are limited.
Learning Objectives
In this simulation, participants will:
• Develop intuition for the relationships among the income statement, balance sheet, and statement of cash flows
• Develop intuition regarding a firm’s cash conversion cycle and the operating ratios associated with it: DSI, DSO, and DPO.
• Learn the trade-offs between managing revenue and profitability growth simultaneously with net operating working capital (i.e. the fundamental balance sheet levers).
• Appreciate how attention to cash-management techniques is critical to managing a firm effectively.
• Recognize how managers often focus excessively on the income statement and ignore the balance sheet and statement of cash flows.
• Appreciate how too much or too little investment in net operating working capital can have significant consequences.
• Learn how to balance growth opportunities and liquidity constraints.
• Learn to maximize a firm’s growth opportunities in a limited-credit environment.
For more details click the below link to upload the Brochure :
/media/1498/working-capital-pdf.pdf