How performance in the Capstone Simulation results in a simulation grade
The base Capstone Simulation point score is generated as outlined below. You may access your Round and Cumulative score during Team Competition on the CapSim website at Reports →Analysis & Scoring →Analyst Report. This document outlines how the 10-item scoring method will be used. Your grade for the team or Individual Competitions will be simply your total points earned divided by the maximum points earned by a student or team (Individual or Team Competitions) in the same industry (simulation number). Large classes may have two industries organized in them.
Margin
Margin points are earned in three areas. 1. Contribution Margin Percentage (Up to 33 1/3 points). Each product with a contribution margin greater than 30% earns points. If all products have contribution margins greater than 30%, you earn 33 1/3 points. 2. Net Margin Percentage (Up to 33 1/3 points). Each product with a net margin greater than 20% earns points. If all products have margins greater than 20%, you earn 33 1/3 points. 3. ROS or Return On Sales (Up to 33 1/3 points). ROS is defined as (Net Profit / Total Sales). ROS looks at the entire company's after tax margins. You earn 33 1/3 points for an ROS of 10% or greater. You earn nothing for a negative ROS. An ROS between 1% and 10% is scaled. For example, an ROS of 5% would earn 16.65 points. To be considered for contribution and net margins, a product must start the year with a plant and begin making sales on January 1. Products that are in R&D at the beginning of the year are ignored. Why do margins matter? And why focus upon Contribution Margin, Net Margin, and Return On Sales? To simplify things, let's consider an example where you have only one product.
REVENUE ($000) Sales VARIABLE COSTS Direct Labor Direct Material Inventory Carry Total Variable Costs Contribution margin PERIOD COSTS Depreciation SG&A: R&D Promotion Awsum $30,000