• Spiraling Out of Control – Wages and Prices

    Unless you’ve been hiding in your basement for the last couple of months (understandable if you were), you’ve probably heard about the dreaded Wage-Price Spiral (WPS) that many economists are predicting. A WPS can occur when prices rise, causing workers to demand higher wages.  Companies then raise prices again to cover their now-higher wage expense…

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  • This Blog Post Is Taxing. It’s About Taxes

    Economist John Maynard Keynes said that avoiding taxes was “…the only intellectual pursuit that carries any reward.”  But in the case of book income vs. tax income, all rewarding things must come to an end.  A minimum corporate tax in the US has been proposed that would be based on the book income of large…

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  • 10K Analysis of a Real Company

    Finance, the language of business, can be confusing and intimidating. We have found that exposing participants to a complex financial exercise through a business simulation enables them to become comfortable speaking this language. In addition to the simulation exercise a simple 10K analysis helps to solidify the financial concepts practiced during a business simulation. These…

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  • Take Heed of Financial Metrics with Lots of Letters in Them

    EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a financial metric that is commonly used to describe the “cash-generating ability” of a company. The metric has become ubiquitous as a proxy for analyzing free cash flow and is very popular in some circles. But Warren Buffett has a strong feeling about EBITDA – he…

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  • GDP – How to Define an Entire Country With Just One Number

    Your business operates within a larger market that is described and measured using the economic indicator “GDP”, or Gross Domestic Product. The number represents the value of all products and services produced within a country’s borders. During PriSim’s simulation exercises this number is used to influence a more or less favorable business environment for the…

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  • A Playbook for Profits (but it might be painful)

    Profits can sometimes be as elusive as a unicorn. But that elusiveness can create opportunities – even if they’re in the painful form of cost-cutting, stringent budgeting, or a merger. And woe to you if you don’t see the opportunities; there are unicorn-hunters in the world of business ready to do what you can’t or…

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  • The Dummy’s Guide to Risk-Based Capital

    Too Big To Fail, Risk-Based Capital, SIFI, ORSA, Solvency Ratio. These terms and acronyms really get your blood moving, don’t they? Or maybe not… At PriSim, we work closely with several leading insurance and financial companies and are thus actually interested in financial risk. We’ve put together a brief description below of 5 commonly used…

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  • It’s The End of Accounting As We Know It… (and we feel fine)

    If you never liked your accounting classes, you’re in luck. According to a new healthcare book, summarized in an article in the Wall Street Journal, it’s The End of Accounting as we know it. But the end is not actually near – it should just look different. The authors argue that current accounting practices are…

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  • Dividends and Buybacks – A Symptom of Short Termism?

    Is the dividend/buyback glass half-empty or half-full? Defenders of dividends and buybacks point out the value returned to shareholders when there are few other investment options. Critics argue for using the cash to build a stronger business for the long term. A recent study by the Boston Consulting Group supports the critics’ viewpoint. Their research suggests that…

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  • July 2015 – Beware of Mis-Analyzing Data Analytics

    Beware of Mis-Analyzing Data Analytics Did you know that when iPhone sales go up, more people die by falling down the stairs?  It kind of makes sense, doesn’t it? Actually, no it doesn’t. It’s a random correlation between 2 data sets that Harvard Business Review (click here) cobbled together to remind us that “correlation doesn’t…

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