Harvard Simulation
Harvard Simulation Synopsis – Week 6 Assignment
Finance 571
February 8, 2015
Faith Walker
Eric Hohl
Abstract Through the study of the chapters of the Fundamentals of Corporate Finance, it has allowed the reader to review possible investments and projects that business management takes to make capital budgeting decisions and improve income and rate of return. This paper discusses the findings of the simulation completed for Sunflower Nutraceuticals, which was completed as a part of the Harvard Business Simulation. The paper examines three scenarios where managerial decisions were made to pursue risk opportunities, reduce liability, increase sales, and reduce the time of outstanding account receivables in the Cash Cycle.
Company Details
Sunflower Nutraceuticals (SNC) is a privately held nutraceuticals distributor based in Miami, Florida, and founded in 2006. SNC started as an internet-based, direct-to-consumer distributor and retailer of dietary supplements, including vitamins, minerals, and herbs for women, with product offerings for all age groups. Through its website and catalog, SNC offers customers a large selection of stock keeping units (SKUs) from more than 50 third-party brands. Since its founding, the company ambitiously expanded into new retail outlets and launched several private-label brands, including a line of women 's electrolyte sports drinks, metabolism-boosting powders, and a vitamin line for teenage girls.
SNC is breaking even, with relatively flat annual sales growth on total revenues of $10 million. The business is working-capital-intensive, and margins are generally thin. Several times during the past few years, the company struggled to finance the payroll, given the firm 's constrained cash position, and more than once the company 's line of credit was overdrawn. SNC keeps a minimum amount of cash on hand to meet operational needs and this level of required cash is $300,000. The company also accesses a line of credit, with a
Finance 571
February 8, 2015
Faith Walker
Eric Hohl
Abstract Through the study of the chapters of the Fundamentals of Corporate Finance, it has allowed the reader to review possible investments and projects that business management takes to make capital budgeting decisions and improve income and rate of return. This paper discusses the findings of the simulation completed for Sunflower Nutraceuticals, which was completed as a part of the Harvard Business Simulation. The paper examines three scenarios where managerial decisions were made to pursue risk opportunities, reduce liability, increase sales, and reduce the time of outstanding account receivables in the Cash Cycle.
Company Details
Sunflower Nutraceuticals (SNC) is a privately held nutraceuticals distributor based in Miami, Florida, and founded in 2006. SNC started as an internet-based, direct-to-consumer distributor and retailer of dietary supplements, including vitamins, minerals, and herbs for women, with product offerings for all age groups. Through its website and catalog, SNC offers customers a large selection of stock keeping units (SKUs) from more than 50 third-party brands. Since its founding, the company ambitiously expanded into new retail outlets and launched several private-label brands, including a line of women 's electrolyte sports drinks, metabolism-boosting powders, and a vitamin line for teenage girls.
SNC is breaking even, with relatively flat annual sales growth on total revenues of $10 million. The business is working-capital-intensive, and margins are generally thin. Several times during the past few years, the company struggled to finance the payroll, given the firm 's constrained cash position, and more than once the company 's line of credit was overdrawn. SNC keeps a minimum amount of cash on hand to meet operational needs and this level of required cash is $300,000. The company also accesses a line of credit, with a
References: Parrinso, R., Kidwell, D. S., & Bates, T. W. (2012). Fundamentals of Corporate Finance (2nd ed.). Hoboken, NJ: Wiley & Sons.