FinGame_Manual_Summary[1]

FinGame_Manual_Summary[1] - FinGame Manual Summary Success...

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FinGame Manual Summary Success = adopted strategy must be flexible enough to adjust to changing environment over time Primary objective: learn how to plan, formulate strategies, and make sets of sound decisions through time; maximize common SH wealth Efficient market: common SH value increased when managers invest in assets that provide ROI that exceeds the cost of capital used to make the investment Duration of a period of play = one quarter of a year = three months Maximum life = 24 quarters Company operates in nonspecific environment and decisions among companies are independent Secondary effects cause disparities which can place company in ‘locked out’ position First active set of decisions: quarter 2 Edit Pro Forma decision inputs : allows preparation of estimated statements that are generated from the company’s current financial position based on the manager’s forecasts of est. units demanded, est. interest rates for the coming period, and remaining set of company operating, investment, and financing decisions Run pro forma simulation : generate pro forma financial statements and summary data View pro forma results : viewing of the simulated info for current and all prior complete co. quarters; only the most recently simulated set of statements will be retained Edit actual decision inputs : decisions from final pro forma plan are automatically transferred to the actual decision inputs; next ‘run the actual simulation’ to generate financial statements for actual quarter View actual results: view quarter’s simulation results; any prior quarterly statements can be viewed View other companies and financial statements; one quarter delay before access Pro forma decision sheet : requires company forecast expected demand, interest rates for securities for coming quarter, and product unit price; test impact of decisions; can be changed until actually run Pro forma statements can be repeated as often as desired for a given quarter Actual quarter decision are irrevocable after simulation is run Accumulated wealth: current value of one share, plus value of all per share cash div distributed from quarter 1, plus market rate of interest on all previous dividends and interest on prior dividends Outperform by: having superior long term plan for company management, being flexible in revising the plan quickly in response to changing environment, micromanaging assets, liabilities, revs, and costs to minimize long term costs while max long term revs, make new investments if there is expected value gain (positive NPV) Comparisons of pro forma statements over different strategies will lease to the rejection of many strategies and narrow a manager’s decision to the few strategies that are most likely to max common SH wealth Cash and liquidity mgmt: min combo of carrying costs and stock out costs for cash Stock out costs : outstanding marketable securities liquidated at 3% disc rate; penalty loan w/ 8% interest rate issued to overcome remaining cash shortfall
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This note was uploaded on 09/14/2011 for the course FIN 6406 taught by Professor Sturm,r during the Fall '08 term at University of Central Florida.

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FinGame_Manual_Summary[1] - FinGame Manual Summary Success...

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