University Finance Simulation Report: BUSI 601, Winter 2020

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This report analyzes a financial management simulation of a banking organization, focusing on the internal system factors relevant to a business's strategy. The simulation highlights a product/service diversification strategy, with the bank offering retail, commercial, corporate, and specialist banking services, along with financial accounting and planning. The report emphasizes the importance of a diverse service portfolio and collaboration between functional divisions to meet stakeholder needs. The simulated services include retail banking (student loans, savings accounts), commercial banking (various loan types), corporate banking (capital solutions), financial accounting (auditing and account maintenance), financial planning and wealth management, specialist markets (personal trading), and structured finance (legal and corporate restructuring). The report references key concepts and provides a detailed overview of the simulation's components and strategic implications, contributing to the overall sustainability of the simulated financial institution.
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Running head: SIMULATION OF FINANCIAL MANAGEMENT
Simulation of Financial Management
Name of the Student
Name of the University
Author Notes:
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1SIMULATION OF FINANCIAL MANAGEMENT
Capism is a web-based learning tool that uses simulated environments to develop
strategies that specifically tackle specific business operations. Operational activities as well as
financial operations can be simulated with the help of Capism. Thus, it can be said that it is a tool
with the help of which one can simulate operations of an organization regardless of the nature of
activities that the organization may be associated to. The nature of outcomes that an organization
will be subject to in term of financial proceedings depends on the proceedings that are associated
a said division within an organization.
Figure: Mind Map of Company X
For organizations that are operating mainly in the financial sector, it is important to
diversify. By diversity, it implies to the diverse operations that can be carried out by an
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2SIMULATION OF FINANCIAL MANAGEMENT
organization. The higher the number of activities that are carried out by the company in terms of
financial services, the more likely the organization is to gain favorable nature of outcomes with
the help of which the organization can gain favorable nature of outcomes. It is mainly important
in terms of the proceedings of an organization that operates in the financial sector, however, it is
also applicable when it comes to the activities of organizations no matter what industry they
operate in. Hence, it can be said that companies should pay extensive attention in terms of the
functions of the financial division of the company. A banking organization is being simulated in
the current scenario. It is evident that the strategy that has been chosen by the organization is
characterized by a great deal diversification in terms of the services that are being offered by the
company. Hence, the stay that had been chosen by banking company X is product/ service
diversification strategy. The company has carried out their financial proceedings with the help of
a service diversification strategy. Three comment had been successful in developing a diverse
service portfolio. The latter is likely to help the company in gaining favorable outcomes that will
likely help the company in satisfying the needs of the other functional divisions of the company.
It must be realized that it is important for all the functional wings to collaborate with each other.
The latter helps in smooth integration of the operations that are being carried out by the
company. Furthermore, the latter is indirectly linked to Satiation of the needs of the diverse
groups of stakeholders associated to the company that is both the internal and external
stakeholders. The simulation that has been carried out describes the different segregations that
are present in the company’s finance wing. Company X being a company operating in the
banking sector, has placed extensive attention in service portfolio development. Following are
the components of the simulated service portfolio;
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3SIMULATION OF FINANCIAL MANAGEMENT
Retail banking: Retail banking refers to the activities carried out by banking companies by
providing services such as provision of student education loans and regular services such as
savings or current accounts (Bakar, Clemes & Bicknell, 2017). Helping individuals with
salary accounts, stock market accounts and various mass market banking services are
complied with in terms of operations of banking company.
Commercial banking: Loans refers to borrowing of a sum of money that is paid after a
stipulated time and that is coupled with a certain interest rate (Berger, Makaew & Roman,
2019). There might be different types of loans that might be demanded by the consumers.
Hence, different types of loans are offered by the company in order to gain effectiveness in
satisfying the diverse needs of the consumer community.
Corporate banking: It is evident that capital is needed for the establishment of any
organization regardless of the nature of activities of the company. However, all banks might
not have the ability to produce enough capital that helps in sustaining the capital
requirements of their company. Thus, Company X provides the service of corporate banking
that provides financial solutions to organizations that are experiencing capital requirements.
Financial structuring solutions are provided not only provided to emerging companies but
also to companies that are deemed to be established.
Financial accounting: Maintaining accounts and auditing must be complied with in
organizations in order to ensure that no capital or money is being wasted by a company
(Russell, Milne & Dey, 2017). Auditing in terms of financial services refers to checking the
viability of the financial services that are provided by an organization and carried out by an
organization with respect to the financial proceedings of the company. Maintaining accounts
help in catering to and recording all the activities that are to be carried out by companies with
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4SIMULATION OF FINANCIAL MANAGEMENT
regards to interaction between the consumers and the different divisions within an
organization. The latter is a service that is provided by Company X.
Financial planning and wealth management: Company X provides services of wealth
management and financial planning (Bhattacharya & Roy, 2019). The service is offered to
companies or individual consumers who aim to boost their financial presence. The popularity
of the wealth management and financial planning is noticeably rising; thus, it is a service that
had to be incorporated into the operations of Company X.
Specialist markets: Provision of services from personal trading to completion of services.
Specialist marketing opinions are needed when it comes to operations in share market. Thus,
the latter helps in developing room for serving consumers who need such services.
Structured finance: There are various financial services that require legal and corporate
financial restructuring. In the market that is deemed to be highly dynamic in nature, there
might be issue that hinder the effectiveness of operations of the company. In cases the most
appropriate solution might be to solve the issue by restructuring the legal and corporate
framework. Hence, legal and corporate framework restructuring services are provided by
Company X.
The assimilation of the said activities helps in generating the interrelated activities with
the help of which companies might gain favorable nature of outcomes with the help of which the
companies are likely to contribute to their sustainability in both the short run and the long run.
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5SIMULATION OF FINANCIAL MANAGEMENT
REFERENCES
Bakar, J. A., Clemes, M. D., & Bicknell, K. (2017). A comprehensive hierarchical model of
retail banking. International Journal of Bank Marketing.
Berger, A. N., Makaew, T., & Roman, R. A. (2019). Do Business Borrowers Benefit from Bank
Bailouts?: The Effects of TARP on Loan Contract Terms. Financial Management, 48(2),
575-639.
Bhattacharya, R., & Roy, S. (2019). Strategic Wealth Management by Linear Programming
Technique. Journal of the Gujarat Research Society, 21(15), 367-375.
Russell, S., Milne, M. J., & Dey, C. (2017). Accounts of nature and the nature of
accounts. Accounting, Auditing & Accountability Journal.
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