need a report on CAPSIM

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CAPSIM REPORT Of ANDREW TEAM

Introduction

In the beginning, Andrew company has been established with the other competitors and to maintain the loyal brand name within the consumers. The main focus of Andrew is to achieve loyalty by providing best quality products at reasonable prices. There are other four companies also present in the competition of the market. Andrew took the decisions after reviewing the low- tech and high-tech market growth rate. The company introduced three products Able, Acre, and Amoeba and changed their price, size, and other factors according to low-tech and high-tech growth markets. In the initial years, the company is facing less profits and try ro recover the loss revenues in the following rounds. Due to the launching of products very early, Andrew will be able to minimize the production cost. The management of the company is reviewing the decision-making strategies on a year-to-year basis. 

Round 1

●        Products: Able, Direct labour $ 12138, Direct Material $20,227, Inventory Carry $282, Total Variable $32,647 we kept both of them high to get more sales, and increase awareness of our product to the customers.

●        Depreciation: $960, SG&A: R&D $0, Promotions $1,000, Sales $1,000, Admin $637 and Total Period $3,597, Net Margin $4,556.

●        We designed our first product in the low tech according to the market criteria.

● We have also introduced a product in high tech which will be released in the next round. We bought some capacity and automation for cap (high tech product).

●        We managed to stock out on cake in the first round, and we had market share of 19.69% by the end of the first round.

●        Profit margin was 4556.

●        Round 0 ends on December 31, 2020.

Income statement of round 0 is given below:

EBIT $4,556, Short Term Interest $0 0.0%, Long Term Interest $641, Taxes $1,370, Profit Sharing $51 and Net Profit was $2,494 6.1%

Round 2

●        Products: Able same as in the first round, In the beginning of round 1 the company had Cash $2,605, Account Receivable $3,548, and Total Current Assets were $6,153, Plant & Equipment $21,340.

●         Accumulated Depreciation was $6,223, Total Fixed Assets $15,117, Total Assets $21,271and the total LIABILITIES & OWNERS EQUITY Accounts Payable $2,832

● In round 2, Direct Labor $15,442, Direct Material $21,363, So Total Variables are accounted for $36,804 on the other hand Contribution Margin $6,363 and Period Costs: Depreciation $1,423, SG&A: R&D $802, Promotions $1,200, Sales recorded for $1,300.

●        In this round, Current Debt was $200, Long Term Debt $5,200, Total Liabilities $8,232, Common Stock $2,323, Retained Earnings $10,716, Total Equity $13,039 Total Liabilities & O. Equity $21,271 By the end of round 2, our market share in low tech was 23%, and high tech was 14%

●        At the end of round EBIT $949, Short Term Interest $17, Long Term Interest $641, Taxes $102 Profit Sharing $4 and Net Profit was $185.

Income statement of round 1 is given below:

●        Net Income (Loss) $185, Depreciation $1,423, Accounts Payable ($22), Inventory $2,352 ($2,352) Accounts Receivable $195 and Net cash from operation was $3,744

· Round 1 end on December 31, 2021.

Round 3

●        New product was introduced in this round 3, but we will be tried to update the current products according to the customer buying criteria

●        We increased automation and capacity as much as we could.

●        In round 3; Cash $11,085, Account Receivable $3,891, Total Current Assets $14,976, Plant & Equipment $21,340, Accumulated Depreciation ($7,645), Total Fixed Assets were $13,695 and Total Assets, whereas LIABILITIES & OWNER'S EQUITY Accounts Payable was $2,290 and company has total Current Debt $867

●         Long Term Debt $4,833, Total Liabilities $7,990, Common Stock $2,323, Retained Earnings $18,358, Total Equity $20,681 and Total Liabilities & O. Equity $28,671.

●        Net Income (Loss) $7,642 $185, Depreciation $1,423, Accounts Payable were for $542 and Accounts Receivable were for $343, at the end of round 3 Net cash from operation was $8,180

●        Our company spent on Direct Labor $13,221, Direct Material $14,63,so the Total Variable accounted for $27,856 .On the other side  Contribution Margin was and in Period Costs: Depreciation was $1,423, SG&A: R&D $317 .Our company spend on Promotions $1,500,but  at the end of year Sales was recorded for only $1,400

●        The round 3 ends on Dec 31, 2022.

Round 4

●        In round 4, we had two products Able and Acre.

●        In term of assets our company has:  Cash $8,653, Account Receivable $4,544 so the Total Current Assets were accounted for $13,197. However, Plant & Equipment $33,000, Accumulated Depreciation ($9,845) which was -27.1% .At end the  Total Fixed Assets were $23,155.

●         LIABILITIES & OWNERS EQUITY Accounts Payable $2,612, Current Debt was $0, Long Term Debt $4,833, Total Liabilities $7,445

●        Company has Common Stock $2,323, Retained Earnings $26,584, Total Equity $28,907, Total Liabilities. & O. Equity $36,352

●        If we observed sales of Andrew company in round 4, it has Direct Labor $16,821, Direct Material $14,958 and our company’s Total Variables were $31,778.

●        In term of Depreciation; it had $2,200, SG&A: R&D $0 $643 and Andrew spend on Promotions $1,500 in round 4.

●        Total sale accounted for again same as round 3; Net Margin for company was $17,053

●        EBIT of company was $13,510 in that round, Our Short-Term Interest was $0, however; the Long-Term Interest $596. We paid Taxes of $4,520 at last the Net Profit was $8,226.

●        Round 4 ends on Dec 31,2023.

Round 5

●        In round 5, we had two products Able and Acre.

●        In term of assets our company has: assets as follows: Cash $8,638, Account Receivable $3,254, Inventory $8,756, Total Current Assets were $20,648.

●        Company spend on Plant & Equipment $33,000, Accumulated Depreciation ($12,045) which was -29.0%, Total Fixed Assets $20,955 and overall Total Assets of Andrew were $41,603.

●        In term of LIABILITIES & OWNERS EQUITY the Accounts Payable were for $2,369. Our company had Current Debt of $1,733 in this round

●         The Long-Term Debt were for $3,100 and Total Liabilities were for $7,202, Common Stock $2,323 and our company’s Retained Earnings were $32,078, which were 77.1%

●        Total Sales of Andrew company in this round was $39,595, in Variable Costs: the company’s Direct Labor cost was $10,880, which was too high. That’s why in the last of that round our company did not show any remarkable progress.

●        If we talk about the income, statement of Andrew in this year; EBIT was $9,137, Short Term Interest was just $125 and Long-Term Interest was $388 1.0%. The company pays tax of $3,019.

●        At the end the Andrew had Net Profit of worth $5,494.

●        Round 5 ends on Dec 31,2024.

Round 6

●        Unfortunately, in round 6, our company had no cash in its assets. However; it had Account Receivable of $2,055, Inventory of worth $24,3. Hence the Total Current Assets in that round were accounted for $26,366.

●        Company spend on Plant & Equipment as $33,000, which was too high. That is main reason why our company Accumulated Depreciation of ($14,245) which means we faced a loss of

31.6%.

●        Company spend of variable cost as follows: Direct Labor $7,116, on Direct Material $5,250, Inventory Carry $2,917 so the Total Variable of company in this round accounted for $15,284.

●        Company had Contribution Margin of $9,719.

●         R&D in this round was $0and on Promotions company spend $1,600. At last of this round it was observed that total Sale was made for only $1,450.

●        Andrew had no profit sharing in this round

●        The total profit in this round was $365.

●        Round 5 ends on Dec 31,2025.

Round 7

●        In this round again, the company has no cash in its assets. Other assets were accounted for  Account Receivable as $680 and Inventory $40,035 .So the company’s Total Current Assets were of  $40,715.

●         Company spend on Plant & Equipment as $55,356, and Accumulated Depreciation recorded in this round for ($17,392) that was -22.1% .

●         Total Assets of company were $78,679.

●        LIABILITIES & OWNERS EQUITY: Accounts Payable $267, Current Debt $49,210, company has to pay Long Term Debt of $15,004.

●        Direct Labor costs to company in this round for $2,194, Direct Material for $1,607, Inventory Carry $4,804, so the Total Variable costs to company were $8,606.

●         At last Andrew was in loss of $14,132

●        This round ends on Dec 31, 2026

Conclusion

The future of Andrew is showing promising predictions for year 2028. In the present situation, the company is looking for external suppliers to enhance their production and sales to the international market.  In the eight years, the company planned the innovation and implemented the results, which is showing the increased stock price. In the initial years, the company tried to maintain the finances for the profits, but moving to the next years the company was facing losses due to some situations. The management made decisions very carefully after looking at the available shares, but as the years passed the position of the company went down. Andrew took the usage of all the opportunities to make the present situation of the company be improved, however the predictions went wrong in decision making regarding products. The company made changes after reviewing the competitor’s decisions, repositioning products, and decreasing the price. Andrew was expected to get success in the beginning, but due to decisions and other factors the company faced loss and return to decreased investments. However, at the end of all rounds our company was in loss; but we learned which factors affect any business from this business based virtual environment. For instance: labour cost, implementation cost of equipment, price of products in the competition market and cost of promotional advertisements.