Glo-Bus Business Strategy Game – Finance and Cash Flow

The Glo-Bus financial screen is quite interesting in terms of business simulations. In relation to Glo-Bus’s big brother, BSG, Glo-Bus focuses upon cash flow for each quarter instead of annual year ends. This makes the game rather interesting as it becomes a balancing act of always having enough money for each of the 4 quarters, while still paying down debt. The correct way to do this screen is to basically pay off as much debt as possible while leaving enough a bit more than enough to cover the year’s expenses.

Some company’s think that it is smart to carry a large cash balance, but that’s the equivalent of putting all your personal money into a “checking” account and not paying off your credit card bill. Paying off debt is paramount in Glo-Bus and does wonders for your credit rating when combined with a decent net profit.

Unlike other simulations, Glo-Bus has a very finite amount of ways to spend cash, very rarely will you need to open up new workstations, you will not be required to make any significant upgrades, it is best to use existing cash in the current account to dramatic effect which is best used by paying off debt and continually keeping interest rates low. If in the event that money is required in one year, it is an easy task to go into the operating line and borrowing the amount. But it is important to not think that the interest gained from large cash balances warrants keeping large amounts of cash on hand and debt seemingly allowed to persist.

The Global Business Simulation Strategy Game – Glo – Bus Quiz Answers

If you’re in a business strategy class, you may be taking the Global Business Simulation Strategy Game, or for short, “Glo-Bus”. You will most likely be taking two quizzes in this course, Glo-Bus Quiz 1, and Glo-Bus Quiz 2. Both quizzes will go over concept basics of the game, and especially Quiz 2 can have very difficult questions. Many of the questions are financial based. Here’s one example question that you will most likely get.

Given the following Financial Statement data:

Income Statement Data Quarter 1

(in 000s)
Sales Revenues $50,000
Operating Profit $14,400
Net Income $9,555

Balance Sheet Data
Total Current Assets $70,000
Total Assets $149,000
Total Current Liabilities $26,000
L-T Debt (draw against credit line) $33,000
Total Equity $90,000

Other Financial Data
Depreciation $4,000
Dividend payments $2,250

Based on the above figures, the company’s capital structure consists of what debt and equity percentages? (These percentages are one of the components used in determining the company’s credit rating, as explained on the Help screen for the Comparative Financial Performance page of the GSR.)

Here are the 5 answers.

20% debt and 80% equity or 20:80.
27% debt and 73% equity or 27:73.
35% debt and 65% equity or 35:65.
37% debt and 63% equity or 37:63.
None of these.

So to answer this question, we must look at this income statement and conclude what debt and equity is.

Total Equity shows itself at $90,000, so that’s easy.

But the real hard part is deciphering what debt is. Believe it or not, but current liabilities isn’t part of “debt”. And that’s a mistake that people make.

So debt is simply Long term debt at $33,000 But then what?

To figure out the correct ratio, the formula for debt ratio= debt/(debt+equity)

[And for note the equity ratio=equity/(debt+equity)]

Or therefore 33,000/(33,000+90,000)=.268 or what equals 27%. Therefore the debt ratio is 27%, and the balance being 73% is equity.

The correct answer is the second one!

A Successful Tool For Business Development

The concept of reality has undergone a revolution in recent decades while techno wizards stretch the boundaries of simulation technology through the development of computers and software. The virtual reality environments of simulation games have become increasingly realistic and may be changing our understanding of what can even be considered ‘real’. Gamers immerse themselves in interactive environments and industries turn to technology to more efficiently train a workforce.

While people have always used games as a way to fantasize about realistic situations, never has there been a tool as useful for doing so as the computer has proved to be. The video game industry is only one facet of the exponential technological innovation of the 20th century but this industry has dramatically changed the entertainment habits of millions. Games that focus on reality simulation have been surprisingly successful with early titles such as ‘The Sims’ selling millions of copies. People seem to enjoy acting out their daily activities in a simulated environment that takes away the pressures of the real world and allows them to explore scenarios that may otherwise be out of reach. With the success of games like ‘The Sims’ and later interactive simulators such as ‘Second Life’, it is no surprise that the business world has exploited this model for training purposes.

One of the first simulation games to teach business strategies was the Intopia simulation that was first released in 1963. Since its creation, the program has been used in hundreds of university courses and has spawned countless variations of simulation games designed to accurately emulate the real world for training purposes. Nathan Kracklauer, vice president of product development for Enspire Learning commented “The immersive nature of simulations is what makes them so valuable for business training. When people play them, they forget that they are not in the real world, and they start behaving the way they would on the job. Instructors or supervisors can observe that behavior and provide corrective feedback, framed in the context of the low-stakes, no-risk environment of the learning game.”

Business models can be tested and taught without traveling to a specific location; Information is decentralized and can be easily disseminated. For training purposes, simulations can also save money in the long run by preserving resources. The military for example uses complex flight simulators to train pilots and in doing so does not risk expensive equipment and provides a safer overall platform for training. A business can provide consistent, high quality training without having to rely heavily on outside trainers and consultants.

The usefulness of simulation games has made them incredibly successful tools for business development and the gaming community has weighed in with their wallets. The business of reality is booming and developers will continue to explore new realms of replication. The future of video games may be an uncertain one but if the past few decades are any indicator, ongoing research will continue to lead to new and unexpected technological innovation that will only lead to more accurate reproduction of reality.