BUSS3500 v2
In terms of this department, our main approach is to generate more funds by issuing shares and bonds to support the long term investment in other departments.
The overall performance is just like the middle aged man, who has a relatively successful career, a well off and stable life which tend to be over ambitious and are not satisfied with what they have. They are eager to make some change but are confused about how to change and therefore has made some mistakes.
In each round, we always achieve the highest sales revenue, but the profit is relatively low since the expenses are fairly significant.
In round 1 and round 3, we did quite a lot investment in our department, we tended to issue shares and long term debt at the maximum level. In these two rounds, the P/E ratio is much higher other rounds, which are nearly 600 and about 900. Although we released two new products which requires significant R&D costs as well as the expenses on automation and purchasing capacity, the results is still really pleasant, in the rounds after, we achieved the most profit compared to other groups in the industry. In addition, the stock price boosts by approximately $10 and reflects a continuous rising trend.
However, due to the previous outstanding performance, we are kind of carried away by the success. In round 5, we are overconfident and too ambitious about our sales figure, so we optimistically overestimate the sales forecast. We produce too many units but the actual sales are not as well as we expected. Excessive inventory is left over and leads to high inventory carrying cost. Additionally, we spent too much in plant improvement, variable cost and SGA stuff. But with huge expenses incurred, we didn’t generate sufficient funds in finance segment. In general, with the inaccurate forecast, we spent too extravagant but didn’t raise enough funds to support. As a result, we didn’t have cash and unavoidably got a significant emergency loan.
We learnt the lesson and act
The overall performance is just like the middle aged man, who has a relatively successful career, a well off and stable life which tend to be over ambitious and are not satisfied with what they have. They are eager to make some change but are confused about how to change and therefore has made some mistakes.
In each round, we always achieve the highest sales revenue, but the profit is relatively low since the expenses are fairly significant.
In round 1 and round 3, we did quite a lot investment in our department, we tended to issue shares and long term debt at the maximum level. In these two rounds, the P/E ratio is much higher other rounds, which are nearly 600 and about 900. Although we released two new products which requires significant R&D costs as well as the expenses on automation and purchasing capacity, the results is still really pleasant, in the rounds after, we achieved the most profit compared to other groups in the industry. In addition, the stock price boosts by approximately $10 and reflects a continuous rising trend.
However, due to the previous outstanding performance, we are kind of carried away by the success. In round 5, we are overconfident and too ambitious about our sales figure, so we optimistically overestimate the sales forecast. We produce too many units but the actual sales are not as well as we expected. Excessive inventory is left over and leads to high inventory carrying cost. Additionally, we spent too much in plant improvement, variable cost and SGA stuff. But with huge expenses incurred, we didn’t generate sufficient funds in finance segment. In general, with the inaccurate forecast, we spent too extravagant but didn’t raise enough funds to support. As a result, we didn’t have cash and unavoidably got a significant emergency loan.
We learnt the lesson and act