Working Capital Simulation Managing Growth
Working Capital Simulation: Managing Growth
Gregory Smith
FIN/571
March 10, 2015
Mrs. Debra Hartsfield
Working Capital Simulation: Managing Growth
The Harvard Business Simulation asked that one act as the C.E.O. of Sunflower Nutraceuticals (which will be referred to as SNC throughout this paper). Within the simulation there were phase in which decisions were made to help SNC with the growth of the company. This paper will explain the decisions made will influence SNC to estimate the value of the company, the working capital of the company, and evaluate the general affects associated with the limited access of financial mix.
Sunflower Nutraceuticals Background
SNC is a privately owned organization that is a large distributor and manufacturer of dietary supplements. The organization has a distribution network including direct customer sales, distributor sales, and retailer sales. SNC was established in 2006 as an internet company. The company soon opened a retail outlet store which also sold private labeled products. Although the organization is successful and has the potential of becoming one of the largest nutraceutial company’s in the United States the company has a problem breaking even. This has caused the organization to exceed its 1 million dollar credit limit several times over the years to finance payroll and other operating expenses. SNC has some restrictive financial options which only allows them to utilize a approximately 10% of working capital to diversify and expand. As the C.E.O. one made decisions that will allow the organization to grow working capital, and allow the organization to utilize these funds to expand and grow financially.
Phase I. SNC Simulation (2013-2015)
The initial phase of the simulation four opportunities were presented that has the potential to maximize the organization’s growth.
Opportunity I.
Acquiring a New Client – SNC made a deal with Atlantic Wellness, a successful health food organization and brought them in as a
Gregory Smith
FIN/571
March 10, 2015
Mrs. Debra Hartsfield
Working Capital Simulation: Managing Growth
The Harvard Business Simulation asked that one act as the C.E.O. of Sunflower Nutraceuticals (which will be referred to as SNC throughout this paper). Within the simulation there were phase in which decisions were made to help SNC with the growth of the company. This paper will explain the decisions made will influence SNC to estimate the value of the company, the working capital of the company, and evaluate the general affects associated with the limited access of financial mix.
Sunflower Nutraceuticals Background
SNC is a privately owned organization that is a large distributor and manufacturer of dietary supplements. The organization has a distribution network including direct customer sales, distributor sales, and retailer sales. SNC was established in 2006 as an internet company. The company soon opened a retail outlet store which also sold private labeled products. Although the organization is successful and has the potential of becoming one of the largest nutraceutial company’s in the United States the company has a problem breaking even. This has caused the organization to exceed its 1 million dollar credit limit several times over the years to finance payroll and other operating expenses. SNC has some restrictive financial options which only allows them to utilize a approximately 10% of working capital to diversify and expand. As the C.E.O. one made decisions that will allow the organization to grow working capital, and allow the organization to utilize these funds to expand and grow financially.
Phase I. SNC Simulation (2013-2015)
The initial phase of the simulation four opportunities were presented that has the potential to maximize the organization’s growth.
Opportunity I.
Acquiring a New Client – SNC made a deal with Atlantic Wellness, a successful health food organization and brought them in as a
References: Parrino, R., Kidwell, D.S., & Bates, T. W. (2012). Fundamentals of Corporate Finance (2nd ed). John Wiley & Sons, Inc. Retrieved from the University of Phoenix eBook database. University of Phoenix. (2013). Harvard Business publishing: Working Capital Simulation: Managing Growth assignment [Multimedia].