One of the learning objectives is that you can explain features of the ERPsim simulation. When you complete this exercise you will be able to calculate the financial ratios we see at the end of each simulation quarter. You will also define what each ratio represents.

The Word file explains the assignment. The spreadsheet file has the financial statement for a company in a previous semester and it has areas highlighted for the ratio calculations you will create. Please provide descriptions and ratios

Financial Ratios Assignment The purpose of the exercise is to become familiar with the financial data shown after each simulation round and to learn or refresh your memory about how these ratios are calculated and what information they give us about our company. Below is an ERPsim round summary. SIMULATION STATE: NoT STARTED R Y PREPARING RUNNING (ROUND: 3/12, EN) POUL REPORT ED OF SIMULATION Toe To Ero or Roures O . ADMIN BANKER VIEWER RESULTS FINANCIAL STATEMENTS - R3 Cory BA Trees R AT ) B Com ELLOS S TOTAL SALES Manu Marmas ROE ROA o DUE C Roug POODUSRAT Row PRET SALES x 3 AAA+ AAA+ AAA+ 6.000 6.000 6.000 24,626,682.00 44,229,194.00 33,674,084.00 615,667.05 2,230,410.36 1,105,729.85 2,939,703.11 841,852.10 2,531,672.37 66.488 67.129 67.638 27.603 37.614 33.253 2.986 5.239 4.039 2.944 5.126 3.964 1.440 2.206 1.904 Mera/s Row N c o 0.000 103,557.69 0.000 537,061.49 0.115 155,388.74 5 34.999 6.666 55.000 586,635.03 1,198,632.38 648,593.88 2 For company Z, you have the financial statement (f.01) for the end of round 3 shown above. Replicate Z's ratios in the financial statement spreadsheet provided. Open the spreadsheet and move to the right. Don't alter the column or row labels in the range of Jl to N25. Follow the example shown for the Gross Margin and describe the formula in words then show the numerator and denominator values. The ratio value will appear (replacing '#DIV/0') when you enter the cell reference for the numerator and denominator values. Use cell reference formulas For example: Enter a cell reference such as =E28, do NOT type in the literal value, such as 21,238,784.1. To figure out the formulas use a finance or accounting textbook or simple search on the Internet. Be sure to match exactly the ratios shown above, including values to the right of the decimal point. Use the minus sign or ABSO function, if needed, to make the ratio value shown. In the shaded green area, provide a short explanation of what this financial ratio tells about the company's financial standing (an example explanation is given for the marketing-to-sales ratio). You must complete: net margin, return on equity, return on assets, debt to equity and marketing to sales. Financial Ratios 1 Company z Ledger OL Financial Statements - ERPsim Time 10:11:02 RFBILA00/ADMIN1 Page Date 2017.08.29 1 Numerator/Denominator (revenue - COGS)/revenue Numerator value 1,712,376.06 Denominator value 2,531,672.37 Ratio 67.638% 3 Gross Margin Ledger Currency type Company code currency Amounts in European Euro 4 OL 5 10 6 EUR 7 2017.01 -2017.16 8 2016.01 -2016.16 This ratio. Net Margin #DIV/0! Reporting periods Comparison periods This ratio. Item Text for B/S P&L item Tot.rpt.pr tot.cmp.pr Abs. diff. Return on Equity #DIV/0! This ratio .... Return on Assets #DIV/0! This ratio ... 8 Balance Sheet 7 Assets: 7 ESEHEEEE=== 10 Current Assets: 10 113300 Bank Cash Account 10 140000 Customers - Domestic Receivables 10 300000 Raw materials 10 792000 Finished goods 10 Total Current Assets 11 Long-Term Assests 11 001000 Land 11 002000 Buildings 11 002010 Accumulated Depreciation - Buildings 11 011000 Machinery and equipment 11 011010 Accumulated depreciation - machinery ar 2,853,776.96 499,839.41 110,644.00 189,523.69 3,653,784.06 0 0 0 0 0 2,853,776.96 499,839.41 110,644.00 189,523.69 3,653,784.06 Debt to Equity #DIV/0! This ratio Marketing to Sales 500,000.00 1,500,000.00 -15,000.00 16,000,000.00 -399,999.96 0 0 0 0 0 500,000.00 1,500,000.00 - 15,000.00 16,000,000.00 - 399,999.96 #DIV/0! This ratio is in ERPsim to highlight how much money is spent on marketing for each euro of revenue generated D 17,585,000.04 21,238,784.10 0 0 17,585,000.04 21,238,784.10 -396,932.00 -396,932.00 -396,932.00 0 0 0 -396,932.00 -396,932.00 -396,932.00 11 Total Long-Term Assests 7 Total Assets 7 ==================== 6 Liabilities and Owners' Equity 12 Liabilities: 14 Current Liabilities: 14 160000 Accounts payable - Domestic 14 Total Current Liabilities 12 Total Liabilities 13 Equity: 16 Shareholders' Equity: 16 070000 Common stock 16 Total Shareholders' Equity 17 Retained Earnings 5 Add: Net Income 17 Total Retained Earnings 13 Total Equity 6 Total Liabilities and Owners' Equity -20,000,000.00 -20,000,000.00 0 -20,000,000.00 0 -20,000,000.00 -841,852.10 -841,852.10 -20,841,852.10 -21,238,784.10 0 -841,852.10 0 -841,852.10 0 -20,841,852.10 0 -21,238,784.10 Financial Statements - ERPsim Time 10:11:02 Date 2017.08.29 RFBILA00/ADMIN1 Page 2 47 Company z 48 Ledger OL 49 50 OL 10 52 EUR 53 2017.01 -2017.16 57 Ledger Currency type Company code currency Amounts in European Euro Reporting periods 54 2016.01 -2016.16 Comparison periods Item Text for B/S P&L item Tot.rpt.pr tot.cmp.pr Abs. diff. -2,531,672.37 -2,531,672.37 0 0 -2,531,672.37 -2,531,672.37 0 819,296.31 819,296.31 0 819,296.31 819,296.31 0 9 Income Statement 19 Revenue: 19 800000 Sales revenues - Domestic 19 Total Revenue 33 Cost of Goods Sold 33 893010 Total Finished Products Sold 33 Total Cost of Goods Sold 24 Inventory Change 24 400000 Consumption Raw Materials 24 895000 Total Finished Products Produced 24 Total Inventory Change 43 211120 Depreciation Expenses: Building 43 211130 Depreciation Expenses: Machinery and EC 43 500000 Direct Labor Costs 43 510000 Factory Overhead Expenses 43 21 Sales, General, and Administrative Expense: 25 520000 Sales, General and Administrative Expen: 27 Marketing Expenses: 30 Product 02 30 477004 Advertising North-02 30 477005 Advertising South-02 30 477006 Advertising West-02 661,344.00 -658,720.00 2,624.00 15,000.00 399,999.96 120,000.00 90,000.00 624,999.96 0 0 0 0 0 0 0 661,344.00 -658,720.00 2,624.00 15,000.00 399,999.96 120,000.00 90,000.00 624,999.96 240,000.00 0 240,000.00 0 1,000.00 900 1,000.00 1,000.00 900 1,000.00 30 Total for Product 02 27 Total Marketing Expenses 21 Total Sales, General, and Administrative Exp 9 Net Income(Loss) 2,900.00 2,900.00 242,900.00 -841,852.10 0 0 0 0 2,900.00 2,900.00 242,900.00 -841,852.10 Financial Statements - ERPsim Time 10:11:02 RFBILA00/ADMIN1 Page Date 2017.08.29 3 86 Company z Ledger OL 88 89 OL 10 91 EUR 92 2017.01 -2017.16 93 2016.01 -2016.16 Ledger Currency type Company code currency Amounts in European Euro Reporting periods Comparison periods Item Text for B/S P&L item Tot.rpt.pr tot.cmp.pr Abs. diff. 3 Net Income(Loss) 841,852.10 0 841,852.10 Financial Ratios Assignment The purpose of the exercise is to become familiar with the financial data shown after each simulation round and to learn or refresh your memory about how these ratios are calculated and what information they give us about our company. Below is an ERPsim round summary. SIMULATION STATE: NoT STARTED R Y PREPARING RUNNING (ROUND: 3/12, EN) POUL REPORT ED OF SIMULATION Toe To Ero or Roures O . ADMIN BANKER VIEWER RESULTS FINANCIAL STATEMENTS - R3 Cory BA Trees R AT ) B Com ELLOS S TOTAL SALES Manu Marmas ROE ROA o DUE C Roug POODUSRAT Row PRET SALES x 3 AAA+ AAA+ AAA+ 6.000 6.000 6.000 24,626,682.00 44,229,194.00 33,674,084.00 615,667.05 2,230,410.36 1,105,729.85 2,939,703.11 841,852.10 2,531,672.37 66.488 67.129 67.638 27.603 37.614 33.253 2.986 5.239 4.039 2.944 5.126 3.964 1.440 2.206 1.904 Mera/s Row N c o 0.000 103,557.69 0.000 537,061.49 0.115 155,388.74 5 34.999 6.666 55.000 586,635.03 1,198,632.38 648,593.88 2 For company Z, you have the financial statement (f.01) for the end of round 3 shown above. Replicate Z's ratios in the financial statement spreadsheet provided. Open the spreadsheet and move to the right. Don't alter the column or row labels in the range of Jl to N25. Follow the example shown for the Gross Margin and describe the formula in words then show the numerator and denominator values. The ratio value will appear (replacing '#DIV/0') when you enter the cell reference for the numerator and denominator values. Use cell reference formulas For example: Enter a cell reference such as =E28, do NOT type in the literal value, such as 21,238,784.1. To figure out the formulas use a finance or accounting textbook or simple search on the Internet. Be sure to match exactly the ratios shown above, including values to the right of the decimal point. Use the minus sign or ABSO function, if needed, to make the ratio value shown. In the shaded green area, provide a short explanation of what this financial ratio tells about the company's financial standing (an example explanation is given for the marketing-to-sales ratio). You must complete: net margin, return on equity, return on assets, debt to equity and marketing to sales. Financial Ratios 1 Company z Ledger OL Financial Statements - ERPsim Time 10:11:02 RFBILA00/ADMIN1 Page Date 2017.08.29 1 Numerator/Denominator (revenue - COGS)/revenue Numerator value 1,712,376.06 Denominator value 2,531,672.37 Ratio 67.638% 3 Gross Margin Ledger Currency type Company code currency Amounts in European Euro 4 OL 5 10 6 EUR 7 2017.01 -2017.16 8 2016.01 -2016.16 This ratio. Net Margin #DIV/0! Reporting periods Comparison periods This ratio. Item Text for B/S P&L item Tot.rpt.pr tot.cmp.pr Abs. diff. Return on Equity #DIV/0! This ratio .... Return on Assets #DIV/0! This ratio ... 8 Balance Sheet 7 Assets: 7 ESEHEEEE=== 10 Current Assets: 10 113300 Bank Cash Account 10 140000 Customers - Domestic Receivables 10 300000 Raw materials 10 792000 Finished goods 10 Total Current Assets 11 Long-Term Assests 11 001000 Land 11 002000 Buildings 11 002010 Accumulated Depreciation - Buildings 11 011000 Machinery and equipment 11 011010 Accumulated depreciation - machinery ar 2,853,776.96 499,839.41 110,644.00 189,523.69 3,653,784.06 0 0 0 0 0 2,853,776.96 499,839.41 110,644.00 189,523.69 3,653,784.06 Debt to Equity #DIV/0! This ratio Marketing to Sales 500,000.00 1,500,000.00 -15,000.00 16,000,000.00 -399,999.96 0 0 0 0 0 500,000.00 1,500,000.00 - 15,000.00 16,000,000.00 - 399,999.96 #DIV/0! This ratio is in ERPsim to highlight how much money is spent on marketing for each euro of revenue generated D 17,585,000.04 21,238,784.10 0 0 17,585,000.04 21,238,784.10 -396,932.00 -396,932.00 -396,932.00 0 0 0 -396,932.00 -396,932.00 -396,932.00 11 Total Long-Term Assests 7 Total Assets 7 ==================== 6 Liabilities and Owners' Equity 12 Liabilities: 14 Current Liabilities: 14 160000 Accounts payable - Domestic 14 Total Current Liabilities 12 Total Liabilities 13 Equity: 16 Shareholders' Equity: 16 070000 Common stock 16 Total Shareholders' Equity 17 Retained Earnings 5 Add: Net Income 17 Total Retained Earnings 13 Total Equity 6 Total Liabilities and Owners' Equity -20,000,000.00 -20,000,000.00 0 -20,000,000.00 0 -20,000,000.00 -841,852.10 -841,852.10 -20,841,852.10 -21,238,784.10 0 -841,852.10 0 -841,852.10 0 -20,841,852.10 0 -21,238,784.10 Financial Statements - ERPsim Time 10:11:02 Date 2017.08.29 RFBILA00/ADMIN1 Page 2 47 Company z 48 Ledger OL 49 50 OL 10 52 EUR 53 2017.01 -2017.16 57 Ledger Currency type Company code currency Amounts in European Euro Reporting periods 54 2016.01 -2016.16 Comparison periods Item Text for B/S P&L item Tot.rpt.pr tot.cmp.pr Abs. diff. -2,531,672.37 -2,531,672.37 0 0 -2,531,672.37 -2,531,672.37 0 819,296.31 819,296.31 0 819,296.31 819,296.31 0 9 Income Statement 19 Revenue: 19 800000 Sales revenues - Domestic 19 Total Revenue 33 Cost of Goods Sold 33 893010 Total Finished Products Sold 33 Total Cost of Goods Sold 24 Inventory Change 24 400000 Consumption Raw Materials 24 895000 Total Finished Products Produced 24 Total Inventory Change 43 211120 Depreciation Expenses: Building 43 211130 Depreciation Expenses: Machinery and EC 43 500000 Direct Labor Costs 43 510000 Factory Overhead Expenses 43 21 Sales, General, and Administrative Expense: 25 520000 Sales, General and Administrative Expen: 27 Marketing Expenses: 30 Product 02 30 477004 Advertising North-02 30 477005 Advertising South-02 30 477006 Advertising West-02 661,344.00 -658,720.00 2,624.00 15,000.00 399,999.96 120,000.00 90,000.00 624,999.96 0 0 0 0 0 0 0 661,344.00 -658,720.00 2,624.00 15,000.00 399,999.96 120,000.00 90,000.00 624,999.96 240,000.00 0 240,000.00 0 1,000.00 900 1,000.00 1,000.00 900 1,000.00 30 Total for Product 02 27 Total Marketing Expenses 21 Total Sales, General, and Administrative Exp 9 Net Income(Loss) 2,900.00 2,900.00 242,900.00 -841,852.10 0 0 0 0 2,900.00 2,900.00 242,900.00 -841,852.10 Financial Statements - ERPsim Time 10:11:02 RFBILA00/ADMIN1 Page Date 2017.08.29 3 86 Company z Ledger OL 88 89 OL 10 91 EUR 92 2017.01 -2017.16 93 2016.01 -2016.16 Ledger Currency type Company code currency Amounts in European Euro Reporting periods Comparison periods Item Text for B/S P&L item Tot.rpt.pr tot.cmp.pr Abs. diff. 3 Net Income(Loss) 841,852.10 0 841,852.10