Working Capital Finance Simulation

Simulation Overview

In this single player asynchronous simulation, learners experiment with different investment and cost-reduction strategies to understand how the income statement, balance sheet, and statement of cash flows are interconnected. Learners balance the desire for growth with the need for maintaining liquidity, considering the effects of each opportunity on a firm’s financial position.

The Story

The participants play the role of CEO for Sunflower Nutraceuticals, a distributor and retailer of dietary supplements. Working in three rounds spanning ten simulated years, learners choose to invest in growth and cash-flow improvement opportunities such as taking on new customers, capitalizing on supplier discounts, and reducing inventory. Each opportunity has a different financial profile and the participants must analyze the short- and long-term impacts on their working capital.

Learning Focus

• Develop intuition for the interconnections between the income statement, balance sheet, and statement of cash flows
• Experiment with tradeoffs between managing revenue and managing working capital
• Explore the consequences of investing too much or too little in net working capital

Topics Covered

• Accounting
• Cash flow statements
• Entrepreneurial finance
• Entrepreneurial management
• Finance
• Growth strategy
• Working capital

See How the Simulation is Played

Each simulation comes with a Teaching Guidebook for the facilitator along with 1:1 facilitator training and free trials.

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This simulation is by Sandeep Dahiya, Harvard Business School Publishing, and Forio