Business
Simulation Lab 2.0
Step into the role of a financial management team. Analyse financial statements, make strategic decisions, respond to changing business conditions and evaluate the financial consequences of your management strategy.
Company Brief
Understand the business before making your first management decision.
Meridian Business Systems Ltd.
Meridian Business Systems Ltd. is a growing medium-sized enterprise providing technology-enabled business services to corporate clients.
The company has achieved strong revenue growth during the previous financial year. Management is now considering expansion, capital investment and changes to its financing strategy.
You have been appointed as the company’s Executive Management Team.
Opening Financial Position
Analyse the company’s financial condition before entering the decision phase.
Statement of Financial Position
30 June 2026| Particulars | USD |
|---|---|
| NON-CURRENT ASSETS | |
| Property, Plant & Equipment | $210,000 |
| Intangible Assets | $25,000 |
| Total Non-Current Assets | $235,000 |
| CURRENT ASSETS | |
| Inventory | $74,000 |
| Trade Receivables | $61,500 |
| Cash & Cash Equivalents | $96,500 |
| Total Current Assets | $232,000 |
| Total Assets | $467,000 |
| EQUITY | |
| Share Capital | $200,000 |
| Retained Earnings | $72,000 |
| Total Equity | $272,000 |
| LIABILITIES | |
| Long-Term Borrowings | $110,000 |
| Trade Payables & Accruals | $85,000 |
| Total Equity & Liabilities | $467,000 |
Opening Financial Indicators
Management ViewExecutive Decision Centre
Make six strategic decisions. Your choices will influence the company’s financial results.
Pricing Strategy
Determine how the company should respond to market conditions and competitive pressure.
Capital Investment
Decide how aggressively the company should expand productive capacity.
Financing
Select the principal source of funding for strategic expansion.
Working Capital
Improve cash conversion through receivables and inventory management.
Dividend Policy
Determine how much profit should be distributed rather than retained for future growth.
Risk Appetite
Select the strategic risk profile that should guide management.
Current Business Environment
External ConditionsDemand Growth
Corporate demand is expected to increase moderately during the next period.
Interest Rates
Financing costs remain elevated and debt should be evaluated carefully.
Cost Pressure
Input costs may rise, putting pressure on gross margins.
Simulation Results
The financial statements below reflect the consequences of your management decisions.
Projected Statement of Profit or Loss
Next Financial Period| Revenue | $480,000 |
| Cost of Sales | $276,000 |
| Gross Profit | $204,000 |
| Operating Expenses | $102,000 |
| Finance Costs | $12,000 |
| Profit Before Tax | $90,000 |
| Income Tax | $18,000 |
| Profit After Tax | $72,000 |
Projected Statement of Cash Flows
USD| OPERATING ACTIVITIES | |
| Cash from Operations | $91,000 |
| INVESTING ACTIVITIES | |
| Capital Investment | ($0) |
| FINANCING ACTIVITIES | |
| Financing Inflow | $0 |
| Dividend Distribution | $0 |
| Net Change in Cash | $0 |
Post-Simulation Financial Analysis
Financial performance must be assessed across several dimensions rather than through profit alone.
Management Interpretation
Analyst ViewFinancial Trade-Offs
Decision Quality- Higher growth may require additional capital.
- Debt can accelerate expansion but increases risk.
- Retained earnings strengthen internal financing.
- Tight working capital improves cash conversion.
- Higher dividends may reduce reinvestment capacity.
Board-Level Management Report
Present your final assessment to the company’s Board of Directors.
Initial Management Assessment
Run the simulation to generate your final board-level management assessment.