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Simulation Game Data

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Submitted By sowmyarnl
Words 3067
Pages 13
Acquire new customer:
SNC is considering an opportunity to add Atlantic Wellness, a large, successful health food chain as a new corporate customer for its herbal nutraceutical product line. Taking on this customer would immediately increase SNC's sales by $4 million per year (a one-time increase of 40%) and EBIT by $260,000. The profit margins and net working capital terms would remain the same as for SNC's existing business.
What would you like to do about this opportunity?
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Top of Form
AcceptDecline
Bottom of Form | 2013 | 2014 | 2015 | Post 2015 | Incremental Summary Income Statement ($ in thousands) | | Sales | $4,000 | $4,000 | $4,000 | $4,000 | Cost of Sales | $3,740 | $3,740 | $3,740 | $3,740 | EBIT | $260 | $260 | $260 | $260 | Incremental Balance Sheet ($ in thousands) | | Accounts Receivable | $1,205 | $1,205 | $1,205 | $1,205 | Inventories | $922 | $922 | $922 | $922 | Accounts Payable | $420 | $420 | $420 | $420 |

Leverage supplier discount

SNC is considering working with Nutrilife on a half-size contract for its herbal nutraceutical product line, with an incremental sales benefit to the top line of $2 million (a one-time 20% increase). In addition, Ayurveda Naturals, the India-based supplier of herbs for the Nutrilife contract, is offering very favorable payment terms: 2/30 net 60. In other words, SNC could lower its accounts payable liability to $153,000 by paying Ayurveda Naturals within 30 days, thereby realizing a 2% discount on raw materials.
What would you like to do about this opportunity?
-------------------------------------------------
Top of Form
AcceptDecline
Bottom of Form | 2013 | 2014 | 2015 | Post 2015 | Incremental Summary Income Statement ($ in thousands) | | Sales | $2,000 | $2,000 | $2,000 | $2,000 | Cost of Sales | $1,833 | $1,833 |

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