Instructions

Topics: Cash flow, Accounts receivable, Balance sheet Pages: 5 (661 words) Published: November 18, 2014


Managing Growth Assignment
Khalilah Skinner
FIN/571
July ,
Frank Seibert
Resources:
 Harvard Business Publishing: Working Capital Simulation: Managing Growth Assignment Ch. 1 - 21 ofFundamentals of Corporate Finance
WileyPLUS Assignments
All additional resources from each week 
Review the following scenario:
Acting as the CEO of a small company, you will apply the principles of capital budgeting to invest in growth and cash flow improvement opportunities in three phases over 10 simulated years. Each opportunity has a unique financial profile and you must analyze the effects on working capital. Examples of opportunities include taking on new customers, capitalizing on supplier discounts, and reducing inventory.  You must understand how the income statement, balance sheet, and statement of cash flows are interconnected and be able to analyze forecasted financial information to consider possible effects of each opportunity on the firm's financial position. The company operates on thin margins with a constrained cash position and limited available credit. You must optimize use of internal and external credit as you balance the desire for growth with the need for maintaining liquidity. Sign-in to the simulation and review each of the following: Welcome Statement

How to Play
Terminology Primer
More Details (this includes information to help you understand how to play the simulation)

Write a paper of no more than 1,400 words that analyzes your decisions during each phase (1-3) and how they influenced each of the following final outcomes (metrics) of SNC EBIT
Sales
Net Income
Free Cash Flow
Total Firm Value
 
Address the following in your paper:
A summary of your decisions and why you made them
How they affected SNC's working capital
What general effects are associated with limited access to financing  Include scholarly references (in addition to your course textbook and simulation materials) to support your positions.  
Format your paper consistent with APA guidelines.

Click the Assignment Files tab to submit your assignment.
Managing Growth Assignment
A summary of your decisions and why you made them

Phase 3: 2019 - 2021 Synopsis
You selected Renegotiate Supplier Credit Terms, and Adopt a Global Expansion Strategy and declined Acquire a High-Risk Customer . Below is a synopsis of how each opportunity affected your Working Capital and Cash Flow.

Renegotiate Supplier Credit Terms
SNC's ability to renegotiate payment terms with Dynasty Enterprises resulted in a significantly lower accounts payable balance and improved margin. Taking on Viva Familia as a new customer helped SNC grow its top line with a very modest increase in cash tied up in inventory. Phase 2: 2016 - 2018 Synopsis

You selected Pursue Big-Box Distribution, Expand Online Presence, and Develop a Private-Label Product and declined no opportunities . Below is a synopsis of how each opportunity affected your Working Capital and Cash Flow.

Pursue Big-Box Distribution
Taking on Mega- Mart Inc. as a customer resulted in impressive top-line growth but the company's EBIT margin declined. Expand Online Presence
Expanding SNC's presence in online retail increased sales with little negative impact on working capital balances. Develop a Private-Label Product
Selling the private label product to Fountain of Youth Spas increased SNC's EBIT margin, only modestly resulting in increased accounts receivable and inventory balances. Phase 1: 2013 - 2015 Synopsis

You selected Acquire a New Customer, Leverage Supplier Discount, and Tighten Accounts Receivable and declined Drop Poorly Selling Products  Below is a synopsis of how each opportunity affected your Working Capital and Cash Flow.

Acquire a New Customer
Taking on Atlantic Wellness as a new customer increased sales significantly but resulted in higher accounts receivable and inventory balances.

Leverage Supplier Discount
Selling its herbal nutraceutical line to...
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