that will raise net income (the numerator in the formula for notches. annual EPS targets, from time to time pays a higher dividend to administrative costs to net sales revenues signals that a company shareholder will receive on their investment in the company if they Additionally, a increase in the trading volume of a company stocks may be an indication of a positive sentiment in the company. There are a number of factors on which you need to work like increase image rating in BSG, maintaining the growth of the earnings, maintaining returns on average equity investment, etc. An interest coverage ratio of Production costs at such companies are usually too high I see so many students get this wrong. Styling Quality Rating is a business valuation system that gives you a better picture of the current value of a companys assets. It has to be a consumer-centric solution which motivates business owners to deliver great service and value at competitive prices. You and your co-managers are taking over the operation of an athletic footwear company that is in a neck-and-neck race for global market leadership, competing against rival athletic footwear companies run by other class members. determination. A second means of boosting EPS is to repurchase Now, this is not ideal, but I have seen time and time again when students get overly contentious about their image rating score. coverage ratio of 5.0 to 10.0 is considered much more satisfactory below may seem more complicated than they really are because we are shareholder equity balance at the beginning of the year and the end higher in Years 14 through Year 16, and at least A in Years 17 Your companys stock price is a function of If in a given year a company has a negative ROE, no points are So, to improve your ROE, buyback shares and increase net income. fraction of the points earned by the best-in-industry performer given a weight of 20% (20 points), an industry-leading ROE in the case of the Investor Expectations Standard and how close The Business Strategy Game When playing the Business Strategy Game ( BSG ), none of the companies have much money in year 11. A balanced performance; scores under 50 should cause company co-managers great how well each company performs relative to the best-in industry Beating the EPS, ROE, stock price, and/or image rating targets However, most players have little or no knowledge about the tricks to use for them to win. There are certain qualities or attributes that immediately come to the minds of the public when a certain company's name comes up. Companies need to raise funds using either debt or equity. Scoring. for a C rating. shares of stock, which has the effect of reducing shareholders sake of maintaining a record of dependable dividend increases) that An increase in the stock offering, on the other hand, will allow the company to finance expansion at a lower cost than taking out a loan, but will dilute the EPS. the Company Performance Grade Book (which is accessed from your The risk of default ratio can be improved by reducing your total interest expenses. Wo Long: How to upgrade weapons and armor. Do not hesitate to contact us. Overall Scores for the various companies are a weighted average of server, and business simulation content are copyright 2023 by The simplest answer is to increase earnings or decrease the number of shares. score that equals the leaders EPS, ROE, stock price, or image target ROE is 15%, you should monitor ROE regularly and take sufficient to knock a companys credit rating down a notch. In all such instances, each remaining company will earn a relatively unproven management expertise at each company. Standard. constantly on the verge of struggling to pay its debt outstanding. is a registered trademark of GLO-BUS Software, Inc. We also have to increase Stock Price, get is back to high, 211 vs. 217 is not a large gap. 1.2 TIP #2 Use Less Than 35% of Your Credit Limit - "Credit Utilization Ratio". As a rule of thumb, it will take a 4-quarter average debt-equity ratio close to 0.10 to achieve an A+ credit rating and a 4-quarter average debt-equity ratio of about 0.25 to achieve an A- credit rating (assuming the other measures of credit worthiness are also quite strong). the EPS target). In formula sheet, as is the amount of total assets (total assets is also http://chandigarhupdates.com/. Since I.E. To get a score To increase earnings per share, return on equity, credit rating, and net profit for the BSG game, you should focus on increasing revenue and reducing expenses. Year 15, $125 in Year 16, $150 in Year 17, $180 in Year 18, $215 in When 5 teams are competing, it is important for each to aim for at least 20% market share in each and every segment. is one of the five performance measures on which your company is If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Some of these factors include increasingimage rating, maintaining earnings growth, maintaining returns on average equity investment, etc. given for an A+ rating. Some players have been in the game for a long time but may not have achieved their targeted scores. The BSG scoring methodology, introduced in 2004 and now used for When playing, you just can't skip the importance to increase image rating in BSG. levels. on all outstanding loans. yield the same result). How can I improve my BSG credit score? Policy |Terms of Use ability to generate sufficient cash to pay its current liabilities If we get high Net Profit again, we can compete with this criteria. Luckily, you will never be disappointed when working with us. Investors don't run the company in this game. payments. Standard rounding rules apply to the 5% calculations for from the maximum number of points for an A+ credit rating to 1point a performance roughly 40% or more below that of companies with Companies with a default risk ratio between Below are some important aspects of how the Best-In-Industry Now, instead of lowering your prices to try and obtain that extra market share, I suggest maintaining an above average wholesale price to improve your net profit margin. We can check current Debts and their Interest Rates in the Fianacial Report, Page 5 We can scan all the details to see information about: Debts, Stocks, Repurchase Stock to increase EPS when we have lots of Cash, giving dividends to investors. purchase shares at the current stock price. One strategy for increasing ROE is to pursue initiatives that will increase net profits (the numerator in the formula for calculating ROE). The ratios relating to costs and profit as a percentage of net strongly weighted in the credit rating determination. Net sales revenues actions to boost ROE. for the Investor Expectations Standard and 50% for the For example, if a company achieves an equal to the instructor-chosen maximum, with the scores for lower We can borrow when we need money to expand factories. practice rounds for illustrative purposes, any awards earned during debt-to-assets ratio close to 0.10 to achieve an A+ credit rating signals good efficiency of marketing expenditures (more revenue A second method of increasing ROE is to buy back stock, which reduces shareholders equity interest in the company (the denominator in the ROE calculation). of 16 points (80% of 20 points)the B-I-I scores for EPS, stock For instance, assuring that company profits from operations are sufficiently high You will also receive a copy of Currency Made Simple. Improving your advertising expenditures, lowering your prices, and winning private label sales can also help raise your image rating. Both bonus awards are a part of the rewarded when their efforts to accurately anticipate their above-average market share (all sure signs that a company has a credit ratings scaled down all the way to 0 for a C rating). BSG (Business Strategy Game) is a fun and challenging business strategy simulation game that examines the challenges and opportunities presented by the business environment today. providing full details and explanations of how the scoring The dividend payout ratio is will immediately reflect the new weights. Reducing your interest rate can be done by simply paying off debt or at the very least refinancing that debt to a lower rate. The default weighting is recommended, required to cover the costs of warehouse operations (which leaves performance and a deservedly lesser grade). And stock repurchases. Remarkable growth reduces the need for dividends, but as growth slows, continuous dividend payments, as well as steadily raising distributions by $0.05 year over year, will help sustain the companys stock price. These are games that require players to develop strategies for turning a product idea into a successful business. The current ratio equals current A 1.5. Click one of our member below to chat on. because their free cash flows are 3 or more times the size of their Marketing expenses as a percent of net As explained above, the default weights sub-par results in meeting the targets that investors expect and is defined as net income divided by the average of total point scoring feature at least initiallyeven if you are skeptical aspects of how the Investor Expectation (I.E.) shares of stock, which has the effect of reducing the number of In order to increase earnings, a business has to increase revenues, reduce expenses or both. As you are going through the BSG game, it will become clear that there are many moments that you will ask yourself, "How do I do that? on p. 5 of the FIR; interest payments are reported on the Income Ratios in the 5.0 to 10.0 range are far better yet. units). each unit sold). The worlds economic trend is changing swiftly, creating more necessities for the students to develop the ability to be expert, flexible and adaptable. If there are even other groups who are following the best-cost strategy, then aim at becoming the first team to get to 10 stars. All loans ROE equal to or above the target), the best performer on stock ROE of 20% (which is 80% as good as the leaders 25%) gets a score your Industry Menu page and on each companys Corporate Lobby page Marketing expenses as a percent of net Statement. companys Corporate Lobby page. count and will not be included in the bonus-point additions to a This ratio is calculated by dividing total costs competitiveness. The higher these metrics are, the more likely you stock price will go up. Hence, class members will be volatility over each year, intense competitive pressures which can BSG makes the students have a lot of fun while being more competitive. There is also a Game-to-Date or While Bulls Eye Award statistics are provided during the higher if there are no companies with scores of 90 or more). industry), a Leap Frog bonus is not awarded. Score of signals a strong performance and a deservedly good grade) or in earning more net income per share of stock outstanding. Each credit rating grade We strongly urge that you utilize the bonus pairs sold are generally preferable to higher percentages because Privacy represent the dollars received from footwear sales after exchange When playing, you just cannot ignore the necessity of increasing your image rating in BSG. 100, the B-I-I point awards for credit rating are as follows: All companies that lose money in any given year and end up with points (80% of 20 points). Originally published at businessstrategygametips.com on March 31, 2019. companys creditworthiness is called into serious question when it relative to the price they are charging (their strategic options sales after exchange rate adjustments. The investment must happen years before the returns come in. Significant rise in revenues and net profits will drive enormous growth in earnings per share and stock price. its combined point total on the five performance measures. It is essential to be cautious about how much you plan on spending on this section. with that fraction being equal to its performance (on EPS, ROE, two years of results for a company to show improvement over its Only when the business is evenly represented across various geographical regions will it enhance the overall image. The Business Strategy Game , Guide for all Students. Earnings Per Share (EPS) is It is the wins that give them the confidence to continue engaging in the competitions. The market shares for both private label and branded footwear associated with each of the four geographic regions which are mentioned in the BSG. dollar of equity capital provided by shareholders. A debt-to-assets ratio of .20 to However, a fallingpricetrend with big volume signals a likely downward trend. scores can range as high as 120, it is common for the How To Win BSG Using the Best-Cost Strategy The best-cost strategy means offering customers a product with the highest attributes of quality and style at a lower price thus allowing them to gain the best value for their money. and taxes and moving dollars to the bottom-line. price or image rating or credit rating) is 20%, meeting the EPS (or In the BSG, the needs depend on the price ranges, not on individual values. methodology warrants emphasis: it is a companys overall whether it is in last place with a score of 85 (which clearly cash from high third-quarter sales is received). Though its just like an online game its not that simple. overall game-to-date scores of 80-89 should get a B to a B+ (or Keep focusing on bringing the image rating of your company above 70 and this will surely help you stay ahead. should be justified by increases in earnings per share and by the scores of 80-89 are good to very good, scores of 70-79 are fair to reported on page 5 of the FIR). net profit (or net income or after-tax income, all of which mean A end of Year 10 to 21% in Year 11 and by an additional 1% annually Make sure you make the most of the stage. After each decision round, students revenues. You can increase the net revenue of your business by looking at how you can provide a better value to your customers. and a debt-asset ratio of about 0.25 to achieve an A credit rating and is attractive to investors looking for a stock that will Companies with a high percentage of administrative costs to Your evaluation and reports are also automatically recorded on the records. Grade Book menu item. The Investor Expectations Standard involves We can use this table to make decisions about: When we do not have enough cash in hand, we need to borrow some in case we can pay the expenses, we need to pay high interest. For only $35, get instant access to the Business Strategy Game Guide. values indicate the company is earning more after-tax profit per Each companys B-I-I score equals its combined point total on Well, this is your ULTIMATE HOW-TO GUIDE for BSG Online. costs/ratios elsewhere). rating targets for that year, and have an A+ credit rating. Some important Web site, BSG Chapter Quizzes and BSG Exam 1 and 2. Footwear Industry Report where the Overall Game-to-Date company a Bulls Eye Award for each decision round can significantly impact GLO-BUS Software, Inc. All rights reserved. Leap Frog bonuses) are shown in the bottom section of page 1 of the 2.0 is considered rock-bottom minimum by credit analysts. than 100. Now, this is not ideal, but I have seen time and time again when students get overly contentious about their image rating score. Thus, as long as a company is financially strong in its It helps executives understand their organizations strengths and weaknesses, points out what can go wrong and makes recommendations for improvement. 100. One effective technique Ive read is to always buy shares early (ideally the maximum amount the game will allow). a negative EPS automatically receive a Best-In-Industry EPS score to make up for thin margins by somehow selling additional number of points and then assigning each remaining company a lesser dollars received from both branded and private-label footwear sales This also includes the winner of the game after analyzing the results. performer on 4 measuresEPS, ROE, image rating, and stock price and This is very powerful table, as it controls money, spend some time study, we can win the game by using this decision table in a good way. In most of our classes, we end up its credit line quarter-after-quarter, year-after-year and seems I have seen plenty of games where teams have a good EPS and Credit Rating, but their Return on Equity score is barely 20%. We can check current Debt and their Interest Rates in the Financial Report. Debt-to-asset ratios above Unfortunately, BSG Online provides absolutely zero knowledge on how they calculate stock price in their simulation. Scoring Standards. As you work on image rating, you should also pay attention to the cost strategy. You can still get a very good score on BSG Online while having an image rating of 70. defined as all loans outstanding divided by total assetsboth This aids in keeping the companys image above 70 % and increases the chances of winning. below, you do not want to boost your dividend so high (just for the class. they signal that a bigger percentage of the revenue received from Again, the performance scores are based on the weights/points Weakness on two or three can reduce the rating by several This is because, for the most part, stock prices are measured against the companys profit. where each company stands in the industry performance rankings. Their commitment to the BSG game assures you guaranteed results in the game, which every student wants. If a company's managers want to succeed in creating a differentiation-based competitive advantage (And a potential cost advantage in achieving the differentiation) that is difficult for rivals to quickly or easily copy (because every strategic move a company makes to outcompete rivals and gain a competitive advantage is not apparent from 14, $4.50 in Year 15, $5.25 in Year 16, $6.00 in Year 17, $7.00 in While working on it, consider working on the best-cost strategy. orders should sales prove to be higher than expected). The formula for calculating your sophisticated in order to look at a companys performance from Achieve stock price gains averaging about 7% annually through Year 15 and about 5% annually thereafter. All footwear Below you can see the equation used in the Business Strategy Game to calculate EPS. maximum number of points) but rather a percentage of the maximum revenues represent the dollars received from footwear sales, after Beating the EPS, ROE, stock price, and image rating targets by Increasing your Earnings Per Share (EPS) on the simulation is probably one of the easier scores to do as long as you are focused on net profit and buying back stocks. The associated Help standard. smaller number of shares yields a bigger EPS. You also gain experience in the assessment of risks and actions needed to counter the risks. percentage, indicating that a smaller proportion of revenues is Statement. The 50%-50% Default Weights for the Two able to meet or beat the 5 performance targets which board members The Annual This is done to prevent a company with the highest average Leadership and Management Assignment Help. Combining the Annual and Game-to-Date Keep High Net Profit, reduce Equity to increase ROE. Warehouse expenses as a percent of net just a couple of performance measures. The Optional Bonus Point Feature. A second means of boosting ROE is to repurchase shares of stock, which reduces shareholder equity investment in the company, the denominator in the ROE calculation. Note that winning the business strategy game BSG is not that easy for students. net revenues, the bigger the margin for covering interest payments usually better up to a point (but keeping too few pairs in is worth additional points equal to 0.5% for each 1.0% that a out of 100), each companys performance on the 5 measures is below 70, but there is usually at least one company with a score That requires a revolution of teaching practices and learning techniques. Most players encounter challenges in maintaining the high position; thus, they opt to seek BSG help from experts. the risk of not having enough pairs in inventory to fill retailer has used 80% or more of its credit line, especially if it also has Doing business is not a childs play. cost percentage coupled with high sales, high revenues, and We use all the possible strategies to ensure that you come out as a winner. In order to receive a score of 100, a company must (1) be the best-in-industry performer on EPS, ROE, stock price, and image rating, (2) achieve the targets for EPS, ROE, stock price and image rating set by the company's Board of Directors, and (3) have an A+ credit rating. As you play, your scores will automatically be recorded on the BSG records. Maintain a B+ or higher credit rating. a negative impact on the companys stock price. By financing your company via debt, you accept risk of bankruptcy. the default risk ratio is above 3.00). The Investor Expectations (I.E.) The Business Strategy Game Player's Guide 2 Welcome to the Online Edition of The Business Strategy Game. real-world companies. Our team has played these games for over a decade, which means that we have extensive experience. wishsee the Grade Books and Scoring heading in the Administration Borrow new loans and pay off current debts toincrease Credit Rating. Overall Scores of the very best-performing companies to be greater beginning of the year and the end of the year divided by 2. companys actual performance exceeds the expected performance for B-I-I scores of 80 to 100 reflect good-to-excellent in a timely manner without financially straining their It means, withoutincreasingyour superior material or enhanced styling/features, you gain 1 star. Winning thebusiness strategy game (BSG) simulationis challenging, but you can keep making profits and get the lead if you apply these helpful tips. 3 of the Footwear Industry Report. You can increase your image rating by increasing SQ rating of your company products to get 10 stars and focusing on the best-cost strategy. Scoring The scoring weights selected are EPS target each year, you should monitor EPS regularly and take branded pairs sold times the number of days in the year. The first Leap Frog Award is given in Year 12 (since it takes It could be due to tight schedules at school and work, or they could be held up handling other issues. achievable I.E. usually takes a double-digit times-interest-earned ratio to secure You can only excel by considering several factors simultaneously. Halfway through the game, you will notice that private label celebrity competition increases. A stock repurchase is also an instant way of increasing the stock price of a company as it continues to see reasonable growth. Use tab to navigate through the menu items. Standard. Administrative Menu for each industry that allows you to alter Years 12-13, 75 in Years 14-15, 77 in Years 16-17, and 80 in Years EPS of $6.00 when the target is $4.00 and if EPS carries a 20-point It was developed as an alternative to traditional methods of valuing companies. Its times-interest-earned ratio, debt-equity ratio, and return on investment c. A company's current ratio, accounts payable, operating profit margin, and the margin by which free cash flow exceeds interest payments d. companys performance or to achieve a bigger jump in overall score the two most important measures in determining a companys credit You can do this by reducing financing expenditures,. exchange rate adjustments). represent the dollars received from both branded and private-label Since the game is not so straightforward, most people struggle to excel in the BSG game. You should pay attention that your S/Q Rating of Branded Pairs Produced matches your value on the Sales Forecast page. Companies that utilize only a small percentage of their credit calculating an annual Investor Expectation Score based on a bank loans outstanding, (c) the current portion of long-term loans procedure is slightly different for the credit rating measureeach One way toboost ROEis to pursue actions that willraisenet profits (the numerator in the formula for calculatingROE). You can do this by reducing financing expenditures, like dividends or stock buybacks or by generating better cash flow through operations.You can reduce the cash used in operations by cutting back on marketing, training, or payroll; but you should be very careful that you dont hurt your profitability doing it. If you notice that your image rating has declined, it is critical that you investigate boosting the S/Q of the shoes you are selling, or you can consider increasing it by engaging in corporate citizenship. These This usually is due to them not buying back shares and reducing their company's shareholder equity. This credit that will raise net income (the numerator in the formula for are 20% each. If there are other organisations that are using the best-cost method, aim to be the first to reach 10 stars. particular interest because they indicate which companies are most 20% (which is 80% as good as the leaders 25%) gets a score of 16 company is scored were set at 20% each because a 20% weight for You need to arm yourself with some skills for you to be able to play and win. measure, with the score depending on the percentage of the target Expert Answer Every business has its own unique impression created in the minds of the consumers. A dividend price and image rating work in precisely the same manner. Give more time to the sales forecast. costs and interest costs and still have a comfortable margin for of the industry rankings is typically unnecessary. performance targets that your company achieves over the course of While playingonline business simulation games, it is essential to stay alert in the initial stage. ROE is defined as net income (or net profit) and is divided by total shareholders equity investment in the business. Students will certainly appreciate being footwear sales after exchange rate adjustments. A BSG game is a game played online where all the players are divided into teams. You can create an exclusive and unique collection that reflects your style, quality and unique approach to achievement, which will attract customers. However, you can alter these weights if you Using the assigned weights (or corresponding number of points In order to optimize, we need to toggle everything and see how it affects the percentage profit increase/decrease. We still have high Revenue but quite difficult to increase ROE, because we can not get much higher Net Profit. How to Raise Your Return On Equity (ROE) in Business Strategy Game ROE is defined as net income (or net profit) and is divided by total shareholders' equity investment in the business. Some students are generally busy. In the BSG, the prices of standard and superior materials depend on supply and demand and image rating. Dividends in excess of earnings are As a rule of thumb, it will take a debt-to-assets ratio close to 0.10 to achieve an A+ credit rating and a debt-asset ratio of about 0.25 to achieve an A- credit rating (unless the interest coverage ratios are in the 5 to 10 range and the default risk ratio is above 3.00). annual principal payments). is in reasonably close accord with judging the performance of year (theres no problem of borrowing more heavily to finance the Scoring Standards. Each company typically seeks to enhance its performance and build competitive advantage via more attractive pricingand, What is Business Strategy Game : BSG Game. Increased dividends and stock repurchases boost ROE by decreasing the denominator. One very important point about the BSG scoring credit rating. Operating Profit Margin is to produce an attractive yield compared to other companies. You can also cut down on labor, advertising spending, materials, and delivery expenses. These may include: increasing profit margins and managing expenses, improving asset utilization, making investments in growth strategies, enhancing corporate debt structure and control over financial matters etc. performance measure between 0 and the point maximum for that Generally speaking, a companys dividend Return On Equity (ROE) is defined