FinanceSim - Corporate Finance Simulation

In this simulation participants manage a simulated firm executing short and long term financial transactions related to working capital management and capital budgeting. Funding is available through short and long term loans, bonds and stock. On the investment side, the firm can invest in short-term certificates of deposit of various denominations, in plant expansion, and/or in equipment replacement. Firms also must choose between two suppliers based on price and term conditions. They can consider extending cash discounts for each of the three products they manufacture and sell. Furthermore, they have to forecast liquidity needs and net income after taxes.

Students can be grouped in teams of two to five members. Up to twenty teams can participate. The simulation can last up to twelve weeks with each week simulating three months of operations. Before the beginning of each simulation, the economic environment and the degree of competition in which the companies will conduct their operations can be modeled. The potential profitability and risk of the company can also be modeled.

A manual and weekly instructions for students are provided on this website before each round of decisions. After each round, reports and financial statements in Excel format are made available to students. The professor also receives a summary report.

Decisions are implemented in a progressive manner. The number and complexity of the decisions increases as the simulation progresses. A tentative decision schedule is available. After a simulation round is processed, firm reports, including financial statements and footnotes, are made available to participants and professors. Another report includes a summary of performance variables and a ranking of the teams. Depending on the preference of the instructor and the nature of the course, an Excel template can be made available to aid the students in forecasting financial statements. Students can also receive technical support from ASDSIM Business Simulations.

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