The Global Business Simulation Strategy Game – Glo – Bus Quiz Answers

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Within the occasion you are in a enterprise approach class, likelihood is you may be taking the Worldwide Enterprise Simulation Approach Recreation, or for transient, “Glo-Bus”. You will most likely be taking two quizzes on this course, Glo-Bus Quiz 1, and Glo-Bus Quiz 2. Every quizzes will go over concept fundamentals of the game, and significantly Quiz 2 can have very troublesome questions. A number of the questions are financial based. Right here is one occasion question that you will most likely get.

Given the subsequent Financial Assertion data:

Earnings Assertion Data Quarter 1

(in 000s)

Product sales Revenues $50,000

Working Income $14,400

Web Earnings $9,555

Steadiness Sheet Data

Entire Current Belongings $70,000

Entire Belongings $149,000

Entire Current Liabilities $26,000

L-T Debt (attract opposition to credit score rating line) $33,000

Entire Equity $90,000

Completely different Financial Data

Depreciation $4,000

Dividend funds $2,250

Based mostly totally on the above figures, the company’s capital development consists of what debt and equity percentages? (These percentages are one among many components utilized in determining the company’s credit score standing, as outlined on the Help show display for the Comparative Financial Effectivity internet web page of the GSR.)

Listed below are the 5 options.

20% debt and 80% equity or 20:80.

27% debt and 73% equity or 27:73.

35% debt and 65% equity or 35:65.

37% debt and 63% equity or 37:63.

None of these.

So to answer this question, we should always take a look at this earnings assertion and conclude what debt and equity is.

Entire Equity reveals itself at $90,000, so that’s simple.

Nevertheless the precise laborious half is deciphering what debt is. Contemplate it or not, nevertheless current liabilities is just not part of “debt”. And that may be a mistake that people make.

So debt is simply Long term debt at $33,000 Nevertheless then what?

To find out the correct ratio, the system for debt ratio= debt/(debt+equity)

[And for note the equity ratio=equity/(debt+equity)]

Or on account of this reality 33,000/(33,000+90,000)=.268 or what equals 27%. Subsequently the debt ratio is 27%, and the stableness being 73% is equity.

The proper reply is the second!

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Source by Bryan Lance Lee