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(ROS) Return on sales
- Net profit, generated each year, divided by total sales for the same
Turn Over (Asset Turn Over)
- Sales, generated in a particular year, divided by the value of total
- assets for the same period.
(ROA) Return on Assets
- Net profit, generated each year, divided by the value of total
- assets for the same period.
- Total assets at the end of the period under review divided by
- owners' equity for the same period. A value of 2 indicates that half the
- assets have been bought with equity, and the other half with current
- and/or long term debt.
Example: Assets = $2,000,000Owners' equity = $1,000,000
$2,000,000 /$1,000,000 = 2
(ROE) Return on Equity
- Net profit, generated each year, divided by the value of owners' equity
- for that year.
(EBIT) Earnings Before Interest and Taxes
- Profits before loan interest payments, broker fees, write-offs, and
- bonus income are taken into account.
- Cumulative total of all profits (losses) generated since the game's
- inception (includes Round 0 profits).
- Sales, General and Administrative expenses: In the simulation,
- SG&A includes all R&D, Marketing, and TQM costs.
- Contribution Margin = Sales - (Direct Labor + Direct Materials +
- Inventory Carry)
- Contribution Margin % = Sales - (Direct Labor +
- Direct Materials + Inventory Carry) / Sales
(BOND MARKET) Series #
- Label given to a bond when it was issued. The first numbers are the
- interest rate. “S” means series, and the last two digits refer to the
- year the bond is due. 15.4S2011 means that the bond pays a coupon 15.4%
- each year and that the principal is due in 2011.
(BOND MARKET) Face Value
- For each outstanding bond, Face ($000): Principal of the issue. If the
- face is $11,040,000 then $11.04M in bonds were issued (unless a portion
- of the bond was paid off before maturity). Using the 15.4S2006 bond with
- a face value of $11.04M as an example, coupons of 15.4% or a total of
- $1,700,160 will be paid each year until the bond becomes due in 2006. In
- 2006, the last coupon and the principal are due. The principal is
- converted automatically to Current (short term) Debt on December 31 of
- the year it is due.
(BOND MARKET) Yield
- A measure of what the bond is worth at current interest rates. To
- calculate, the stated interest rate is divided by the closing bond
- price. For example, if the stated interest is 15.4% and the closing
- price is $115.80 then $15.40 divided by $115.80 gives a yield of 13.3%.
(BOND MARKET) Close (Outstanding Bonds)
- Closing price of the bond last year. Bonds are bought and sold in the
- marketplace, but since their interest payment is fixed, the price of the
- bond fluctuates. A risk assessment is made for each firm, ranging from
- “AAA” to “D.” For each lower grade, investors expect an additional 0.5%
- yield. The simulation adjusts the closing price of the bond so that the
- yield reflects current interest rates and an appropriate risk.
(STOCK MARKET) EPS (Earnings per share)
- Earnings Per Share = Net Profit for the year divided by the number of
- Shares Outstanding.
(STOCK MARKET) P/E (Price Earnings Ratio)
Price Earnings Ratio = Stock Price divided by Earnings Per Share (EPS)