BUSI 1550: Financial Analysis of SimVenture Simulation Report

This report presents a comprehensive financial analysis of the SimVenture business simulation, a commercial simulation used in educational and business settings. The analysis includes the calculation and interpretation of various accounting ratios, such as operating profit ratio, net profit margin, current ratio, and return on assets. The report examines the company's performance over a six-month period, identifying key trends and areas of concern. It also formulates recommendations and an action plan to improve the financial situation of the simulated business. Furthermore, the report compares and contrasts the financial ratios calculated for August with those calculated for December, providing insights into the impact of the implemented strategies. The analysis covers aspects like liquidity, profitability, and asset turnover, and it offers a detailed examination of the company's cash flow, including a profit and loss statement. The report concludes with an assessment of the business's performance and recommendations for continued improvement, offering a complete financial overview of the simulated business venture. The report is contributed by a student to be published on the website Desklib, a platform which provides all the necessary AI based study tools for students.

CREATIVITY AND DECISION MAKING1
EVALUATION OF SIMVENTURE FINANCIAL ANALYSIS
Student:
Institution:
Instructor:
Date:

BUSINESS FINANCIAL
ANALYSIS 2 1
EVALUATION OF SIMVENTURE FINANCIAL ANALYSIS
EXECUTIVE SUMMARY
Reward captivating commercial simulation, since launching in early 2006,
SimVenture Model had remained provided to 40+ nations. Therefore, the software
particularly used by learning, commercial and charitable sector customers. Linking
the gap amongst concept and exercise, SimVenture Model encounters users to make
inquiries, transactions, and guidelines to shape a fruitful company.
Qualified and specialized trainers, educators and lecturers might also acquire a
free experimental assessment reproduction of SimVenture Definitive. Document to
the base of the page, wide-ranging the 5 void packets and surrender to the application.
However, VSL squad does not a reaction to assessment requirements directed from
nontheoretical email discourses. Allowed connected screen-to display samples of the
software are delivered to qualified trainers, instructors, and presenters.
Classically online assemblies previous up to a period and are way at a period
to suit Wide-ranging the practice at the base of the original sheet to appeal your own
stroke demonstrator. While using the prize-winning commercial simulation ones
might notice the depth and extensiveness of the education resolution and in what way
slight was left to coincidental in the simulated ecosphere. Therefore, it also realizes
and explores the manner we must go a limited extra considerably to integrate a variety
of occupations comprising: commercial advisor provision,
Introduction
Running a business like Sim Venture involves recurrent inspection/ analysis
and assessment of its industry performance. In order to guarantee the persistent

BUSINESS FINANCIAL
ANALYSIS 3 1
profitability of the initiative, it involves using financial ratios to amount and assess it.
Hence, the significance of financial proportions/ ratios turns out to be evident
especially when comparing essential information from assets as well as from
liabilities. Sim Venture is well known Windows-built software that was established in
early October 2006. Therefore, according to the business at current over 110 UK
Advanced Learning organizations use rely on this platform in their program. In
addition,
SimVenture Objectives/ Goal
Simulations aim at developing and attaining rapid trickly profitable and
planned managerial skills as well as acquiring advanced governance skills. Always
aims at acquiring high skills know-how in order to attain high returns and achieve
their targeted goals. Business involved in Creating forward-thinking commercial
simulation and commerce gaming online education clarifications towards
the victorious SimVenture strategy lineup. Always functioning in the learning and
business training segments, through providing reliable gaming knowledge
resolutions that sustenance and engross coaches, in managerial and commercial
leadership
Current Situation of SimVenture Business
Wide-ranging and continuing consultation had remained essential to the
growth of the on-line commercial simulant, SimVenture Development. Hence, the
latest on-line corporate plan simulation, which was established in 2016 to encounter
the mounting requirements of learning and corporate clients, sustains the business's
position at the pole position of the corporate gaming / commercial simulation

BUSINESS FINANCIAL
ANALYSIS 4 1
business. Therefore, the team seems to be committed to generating an education
revolution across the world of corporate and commercial leadership
Finance
$54,000,000 loan from financial institutions and plowing back its profit used
to finance the business activities. Therefore the SimVenture announced to be having
high current ratios, indicating that it was in a position of settling its debt.
Credit Control
The Business outstanding disbursement was surveyed and monitored at the
initial month of the year and no action for the next month. Therefore, the company’s
credit control for initial months seemed to be high. In addition, the business used to
make a lot of returns at the end of every financial year, therefore it was in a good
position of borrowing a huge amount since there was enough collateral
Operation
SimVenture business product design was of high Quality approximately 78%,
thus, the business used to offer services of high quality, thus attracting a high number
of customers. Business performances were ranked high of about 69% indicating that
the business aimed at profit maximizations. Thus, high returns made the business to
expand in its capacity.
Sales and Marketing
Competitor’s study/ explorations market place research was completed in
August and December where the present selling price was annualized to be $ 12,500.
Therefore, the business employed heavy advertisement in which it was in a good
position of eliminating unnecessary competition from its competitors. Employing well

BUSINESS FINANCIAL
ANALYSIS 5 1
competent workers as well as offering services at an economical value made the
business to continue smoothly
A ratio alleged to be assessed and computed in the connection amongst one
scale and another. A financial quantity assumed to be a valuation among a particular
bit of financial information and another. Therefore to assess the business's working
performance seems to be significant, since it contributes the organization the direction
of creating a future choice via an actual and cost-effective way
Calculation of Operating Profit Ration is
cost-effectiveness/performance proportion used to compute the proportion
of revenue a business creates from its actions, prior to deducting taxes and interest
duties. It is calculated by dividing the operating profit by total revenue.
Operating Profit Ratio= Operating Profit/Total Revenue
Operating Profit Ratio= 3,296,264/14,953,224=22.0%
22.0%
Net Profit Edge (also recognized as “Profit Margin” / “Net Turnover Margin
Proportion”) described being a financial share used to compute and analyse the
percentage of revenue a SimVenture firm produces from its entire revenue. Hence, it
measures the sum of net profit a business attains for each dollar of income gained.
Net profit= Profit/ Sales
Net Profit Ratio= 2,486,798/ 14,953,224=16.6%
16.6%
Built and based on this data, Sim Venture portfolio turnover for the financial
year 2004 (completion December 31, 2005)?
Result/ Solution:
Using the financial year completion stability of account:

BUSINESS FINANCIAL
ANALYSIS 6 1
Sum of years inventory =
$219,793/365=602.17
29,769.25/602.17=48.9 days
Collective dimension/ magnitude analysis regarded to be valuable and
beneficial especially when analysing drifts/ tendencies in profitability (by means of
the common magnitude income reports) and tendencies in venture and financing
(while using the shared magnitude balance sheet) (Savage and Van Allen 2014).
Measurement of Liquidity Proportion
Liquidity percentages offer an amount of a Sim Venture capability to create
cash to encounter its instant requirements. Therefore, there are three frequently used
liquidity proportions:
Current Ratios/ Proportions
In addition, the present/ current ratio described being the percentage of current
assets to present liabilities. The current ratio shows a business's capability to fulfil its
current/ present liabilities with its recent assets. Current ratio measurements help Sim
Venture Simulation to measure how successfully and efficiently the business appear
at positioning its venture to labour (Lawrenz and Zorn 2018)

BUSINESS FINANCIAL
ANALYSIS 7 1
Sim Venture Simulation Liquidity Percentage/ Ration, 2005
.
With the results obtained, it indicates the business was in a position of
fulfilling its present liability (Lawrenz and Zorn 2018)
(B) Cost-effectiveness/ Profitability proportions and ratios
A profitability percentage (also mentioned as revenue margin proportions)
relates and contrasts components of revenue with transactions. Hence, it gives an
impression of what creates up to a business's revenue and is generally articulated as a
percentage of every dollar of trades. And the numerator that redirects/ reveals and
finally assesses the presentation of diverse features on the industry: and gross revenue

BUSINESS FINANCIAL
ANALYSIS 8 1
boundary regarded as a proportion of gross earnings/ return to transactions (Gaver and
Pottion 2014)
Working turnover margin/ boundary = $14,561.10 ÷ $39,788.12 = 36.596%
Net turnover margin = $12,254.10 ÷ $39,788.12 = 30.798%
In addition, working profit margin described to be, the proportion of working
profit, functioning income, revenue before interest and duties) to transactions. And
hence the ratio indicates the amount of every money of transactions remained over
after working expenditures:
Net profit margin defined to be the fraction of net revenue to transactions, and
displays on in what way ample of every dollar of transactions remained over after
entirely expenditures:
Net yield boundary=Gross Revenue (Öztürk and Serçemeli 2016)
Accounts receivable income mentioned to be the fraction of net credit
transactions to versions receivable. However, the ratio shows how many periods in
time credit trades must be generated and composed on
Explanations receivable revenue = $9,788 ÷ $7,180 = 5.542 times
Entire asset revenue is the percentage of transactions to overall assets. Total
asset ratio shows the level that the venture in overall assets outcomes in transactions.
However, this might be represented graphically as shown below

BUSINESS FINANCIAL
ANALYSIS 9 1
Return on venture proportions (Minnis 2017
However, update information is issued and distributed twice per year (June
and December). Entirely update statements circulated on the website are divided into
2 segments. Therefore, the first segment of the apprise declaration emphases on
Operator Simulation knowledge and understanding. And while the next sector of the
statement offers information of functionality progresses inside the Regulation Tower.
Profit must always be incorporated as part of any fiscal analysis. Here,
measurements are calculated relative to Transactions which are reflected to be 100%
and showing at least 1000 profit for 3 months in a financial statement
Completion/ final Inventory = $1200
Beginning Inventory = $200
Cost of Goods Sold = $500
Accounts Payable = $200
Profit made during the 3 months
$1,200-200= 1,000
$1,000
And Receivable Turnover = Sales/ Average Receivable

BUSINESS FINANCIAL
ANALYSIS 10 1
150,000,000/150,000=$1000
Profit and loss (P&L) declaration Software summarizes a SimVenture Simulation
income and expenditures for a August to arrive at net remunerations for the period.
P&L statement software:
Table1. The profit and Lost Report for the month of August
1064/16218=0.065
Calculation of Asset Turnover for 3 Months
Calculation of Gross Profit
2000/23024=0.083

BUSINESS FINANCIAL
ANALYSIS 11 1
Table 2: P&L For the Month of December
Calculation of Asset Turnover for 3 Months
Calculation of Gross Profit
2000/23024=0.083
Influence and effects of cash flow in the Sim Venture Simulation Firm
transpired all through in the first mid-year. However, Consultancy assembly
strategically planned to control and regulate the condition and recommence the
growth. Therefore, in this consultancy statement/ analysis projected to identify and
distinguish the industry’s presently cash flow matters and studies the earlier six
months trading matter. And, fiscal and financial consultant assembly had intended the

BUSINESS FINANCIAL
ANALYSIS 12 1
action plans to endorse and recommend enlightening the state in August and the
previous six months of the year. Significantly, informational contented to report of
both cash inflow and outflow for Sim Venture Simulation business (i.e. gross
boundary margin, net profit margin, return on transactions, return on assets, Current
assets, asset income, and current) amongst others have an important result in the
clarification and understanding of the business situation. Thus, it was discovered that
the variable greatest effective is the adjustable functioning cash flows which revealed
negatively on the price of the company’s share (Ricketts 2019)
One-on scheme magnitudes, more commonly termed yield on-asset
proportions, companion actions of aids trade have not though dignified with
interventions and activities of the undertaking. What business needs to assess might
control and govern the profit that appears to represent in the numerator and the
incomes touching and influencing that value, characterized and signified in the
denominator
Thus, the ratio amount of the working income resultant from the company's venture in
entire assets. Return on assets, ROA, believed to be the proportion of net revenue to
assets and designates and show the Sim Venture net profit created for each dollar
participated in entire assets (Altman 2018)