Garza and Neely, CPAs, are preparing their service revenue (sales) budget for the coming year (2!2)"#he practice is divided into three departments$ auditing, ta%, and consulting" &illable hours for each department, by 'uarter, are provided belo"
DepartmentQuarter 1Quarter 2Quarter 3Quarter 4
Auditing2,*!,+*2,!2,#a%*,*-2,+.2,22,/*Consulting!,+2!,+2!,+2!,+2Average hourly billing rates are$ auditing 0/, ta% 0.*, and consulting 0!2"Prepare the service revenue (sales) budget for 2!2 by listing the departments and shoing for each 'uarter and the year in total, billable hours, billable rate, and total revenue"
GARZA AND NEELY, CPAsSales Revenue BudgetFor the Year Ending Dece!er "#, $%#$&uarter #&uarter $De't(Billa!le)oursBilla!le Rate*otal Rev(Billa!le)oursBilla!le Rate*otal Rev(
GARZA AND NEELY, CPAsSales Revenue BudgetFor the Year Ending Dece!er "#, $%#$&uarter "&uarter +De't(Billa!le)oursBilla!le Rate*otal Rev(Billa!le)oursBilla!le Rate*otal Rev(
GARZA AND NEELY, CPAs
2,43084 204,120 1,73084 145,3203,350 93 311,550 2,790 93 259,4701,720 102 175,440 1,720 102 175,440691,110 580,2302,16084 181,440 2,66084 223,4402,26093 210,1802,83093 263,1901,720102 175,4401,720102 175,440567,060 662,070
Harvard Business Publishing: Working Capital Simulation: Managing Growth Assignment
Ch. 1 - 21 ofFundamentals of Corporate Finance
All additional resources from each week
Review the following scenario:
Acting as the CEO of a small company, you will apply the principles of capital budgeting to invest in growth and cash flow improvement opportunities in three phases over 10 simulated years. Each opportunity has a unique financial profile and you must analyze the effects on working capital. Examples of opportunities include taking on new customers, capitalizing on supplier discounts, and reducing inventory.
You must understand how the income statement, balance sheet, and statement of cash flows are interconnected and be able to analyze forecasted financial information to consider possible effects of each opportunity on the firm's financial position. The company operates on thin margins with a constrained cash position and limited available credit. You must optimize use of internal and external credit as you balance the desire for growth with the need for maintaining liquidity.
Sign-in to the simulation and review each of the following:
- Welcome Statement
- How to Play
- Terminology Primer
- More Details (this includes information to help you understand how to play the simulation)
Write a paper of no more than 1,400 words that analyzes your decisions during each phase (1-3) and how they influenced each of the following final outcomes (metrics) of SNC:
- Net Income
- Free Cash Flow
- Total Firm Value
Address the following in your paper:
- A summary of your decisions and why you made them
- How they affected SNC's working capital
- What general effects are associated with limited access to financing
Include scholarly references (in addition to your course textbook and simulation materials) to support your positions.
Format your paper consistent with APA guidelines.
Click the Assignment Files tab to submit your assignment.