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BSG Online 2017 - Business Strategy Game - Winning Tips Guides 027

Business Strategy Game - BSG Online 2917

BSG Online - Best Tips

BSG Online 2017 - Winning Guides and Tips

BSG Game Tips – Net Profit Or Cash in the Bank?

BSG Online 2017 - Winning Guides and Tips Revised

For the new seasons of BSG Online 2017, we have some new winning strategies, some old tips remains the same as previous post on BSG tips, but with some new insights.

You can follow this new guides and in order to win BSG Online 2017.

BSG Game Tips – Net Profit Or Cash in the Bank?

 

In the Business Strategy Game there are a large host of people who wonder if whether it is better to sacrifice net profit for a large cash reserve or to deplete a cash reserve for the sake of a slightly higher net profit.

The answer to the question is extremely critical for anyone who wishes to win the game on bsg-online.

A large cash reserve and no debt is able to raise your credit rating to a very high level and you’re able to get points. Whereas having a good net profit raises EPS, RoE, and stock price (to a lesser extent). Ultimately it is far more worthwhile to have a higher net profit than a large cash reserve.

TIPS: 

Do not neet to keep much Cash in hand, it is not good for Business, if you like, you can try and see that the other factors do not increase when we have more cash in hand, eg. EPS, ROE, and Stock Price. May be Credit Rating, but not strongly. To increase Credit rating, of course, we need more Cash in hand, and no Debts. We can even increase Credit Rating by trying to pay old debts every years. (not to get lower interest for new loans, to get this information, please read Report Finance - left side of BSG decisions Screen).

This question can evolve is that is it better to have a high net profit at the expense of great debt? 

Do not try to borrow too much, you can check with Total Equity, eg. we borrow too much, too much to expand some factories, then ROE will reduce much, if we can not increase Net profit higher than growth of Total Equity. So, we need to balance the growth or expansion, with the increase not Net Profit. To do so, we need to keep track of Profit Margin per pair of shoes.

In Finance class you will probably learn that debt is a financial lever. Using debt to bolster your company with greater abilities leads to greater net profit which in turn pays off the debt in time. A company does not need to be debt free to be extremely successful and capable of an A+ credit rating in the industry.

We do not need to be Debt free, we need increasing Net Profit and some Cash in hand, so bank will reduce Interest for us every year, then we borrow new loans, pay off old debts, and increase Credit Rating, to A, and then A+.

 

 


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