Working Capital Simulation Essay Example for Free

Working Capital Simulation EssayThis simulation has given me a rectify understanding of what answerrs and CEOs go through when making decisions for the company. As I went through each simulation more than once to see what affects the decisions had on cash flows, sales and EBIT. In some situations they changed whether it dropped or risen, and others they were completely stagnant with their movement through each phase. Below I will point fall out how and why I made each decision.Phase 1, I chose to acquire a new node and tighten up accounts receivable in twain times I did the simulation. I chose to take on a new customer because SNC needed the exposure to become known as it is starting to drag widespread exposure. The results of this acquisition were that it increased the sales significantly but also left us with higher receivable an inventory balances. (Harvard SNC Synopsis) The results of tightening up the accounts receivable were that sales deport declined but the receiv ables improved which freed up cash. (Harvard SNC Synopsis)In phase 2, I chose to expand the online presence as healthful as develop a private label in one simulation and the second simulation I just chose to expand on line. In my first choice since I chose to expand online and develop the label, the amounts varied in increase of cash flows. The expansion of the online presence increased Internet sales and the private label increased the EBIT gross profit margin only a little. This also counteracts with the accounts receivable and inventory balances after phase one. But it was not that drastic of a change. In 17 there was no increase or decrease in cash flows, which only means that in that year we broke even on the developing label side.The expire phase, I chose to adopt a global expansion strategy in one trial and in the second I chose to adopt and acquire the tough customer. The results of acquiring a high-risk customer increase the sale, but had a dramatic affect on the receiv ables. SNC has now to consider witting off a portion of the outstanding balance as the company Midwest Miracles filed for chapter 11 bankruptcies. This simulation alone has taught me one of the many risks of doing business with any company. (Harvard SNC Synopsis) I suasion that after acquiring the company, they could maybe stand on their own with the help of SNC and pull out of their financial hardship. It had the complete opposite affect on the SNC and it could have potentially ruined my company, as well as made me lose investors. The global expansion however helped the SNC grow its top of the line with the new customer Viva Familia. Like expanding online, the global strategy was another attempt to make sure SNC is the first company consumers think about when dietary supplements.Limiting entre to financing can hinder any company or person from trying to grow their business. It can cause higher interest rates on loans and credit fees as well as force businesses to face hardships w hen it comes to registration costs, policies and equipment needed for the business. (Parrino, Kidwell, $ Bates, 2012) It can also limit the profits they may encounter with consumers on in the new market. The limit of access to finance also hinders the process to develop and own their own brand of products.Making a if I were unfeignedly the CEO of SNC or any business, I would need the help of a team to help make these decisions on and expansion and growth as well as investing in other companies. This simulation put in perspective the skill set and education needed after studying finances to even hope that you can make a profit on any decision made. It is a really difficult task to try and manage a company as well as keep up with the market. If this were a sole proprietorship, it would really be stressful to handle all by their lonesome.ReferenceHarvard Business Publishing. (2012). Working capital simulation managinggrowth. Retrieved May 16th, 2915 from, http//forio.com/simulate/har vard/working-capital/simulation Parrino, R., Kidwell, D.S, Bates, T.W. (2012) Fundamentals of corporate finance (2nd ed.) Hoboken, NJ Wiley