An Application of Financial Analysis of the Business Firm in a Simulated Competitive Environment

Abstract

"A procedure is described whereby the Business Management Laboratory business game was modified to produce financial data records that were then imported into the fisCAL financial analysis software package. The record schema contained 101 data fields in an ASCII format with delimiters. Data fields included income statement and balance sheet items as well as such items as the capitalization rate, discount rate, various valuation factors, etc. Students in a graduate strategic management course were required to subject the imported financial data to the structured financial analysis of fisCAL. Industry comparisons on a normalized basis were made using both percent and dollar variance measures. Such comparisons were made for income statement and balance sheet items, breakeven analysis, operating capital requirements, financial ratios, and cash market value. Based upon multiple previous periods, trends and proforma projections are made for the income statement, balance sheet, financial ratios, and cash flow management. "