• 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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  • Chasing Growth Can Turn a For-Profit Company into a No-Profit

    It seems many companies today are chasing growth. As an example, Amazon invests most of its cash into growing the company. The goal is to solidify a position in the market first and earn money later on the investment. But that strategy doesn’t always work: nine years after acquiring YouTube, Google still hasn’t found a…

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  • February 2015 – No Debtors’ Prison For These Companies…

    No Debtors’ Prison For These Companies… Our students frequently struggle with the question of how much debt they should carry. Many come to the same conclusion as some leading companies such as Facebook and Visa: to have almost no debt. Debt has its advantages. It can be used to pay dividends, buy-back shares, or grow…

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