Bus Fund I

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  1. (ROS) Return on sales
    • Net profit, generated each year, divided by total sales for the same
    • period.
  2. Turn Over (Asset Turn Over)
    • Sales, generated in a particular year, divided by the value of total
    • assets for the same period.
  3. (ROA) Return on Assets
    • Net profit, generated each year, divided by the value of total
    • assets for the same period.
  4. Leverage
    • 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
  5. (ROE) Return on Equity
    • Net profit, generated each year, divided by the value of owners' equity
    • for that year.
  6. (EBIT) Earnings Before Interest and Taxes
    • Profits before loan interest payments, broker fees, write-offs, and
    • bonus income are taken into account.
  7. Cumulative Profit
    • Cumulative total of all profits (losses) gen­erated since the game's
    • inception (includes Round 0 profits).
  8. SG+A
    • Sales, General and Administrative expenses: In the simulation,
    • SG&A includes all R&D, Marketing, and TQM costs.
  9. Contribution Margin
    • Contribution Margin = Sales - (Direct Labor + Direct Materials +
    • Inventory Carry)

    • Contribution Margin % = Sales - (Direct Labor +
    • Direct Materials + Inventory Carry) / Sales
  10. (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.
  11. (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.
  12. (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%.
  13. (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.
  14. (STOCK MARKET) EPS (Earnings per share)
    • Earnings Per Share = Net Profit for the year divided by the number of
    • Shares Outstanding.
  15. (STOCK MARKET) P/E (Price Earnings Ratio)
    Price Earnings Ratio = Stock Price divided by Earnings Per Share (EPS)
Card Set:
Bus Fund I
2010-04-27 13:45:36
Capsim Foundation

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