Default Risk Ratio = Free Cash Flow ((Net Profit + Depreciation – Dividends) ) / Combined Annual Principal Payments on Outstanding Loans (Overdraft Loans, Current Portions of Long Term Loans, 1 Year Bank Loans).
Deprecation Expense: Number *.05 (because the deprecation expense is 5%).Interest Coverage Ratio= Operating Profit / Annual Interest Expense.Return On Average Equity = Net Profit / Average Shareholders Equity (Year 11 total Share Holder Equity + Year 12 Shareholder Equity / 2).PLEASE COMMENT ANY QUIZ 2 EQUATIONS NOT COVERED TO HELP THE NEXT TEAM : ) There is a lot more to Quiz 2 than the equations, make sure to check out my other blog posts listed below to ensure your success. The SlideShare is linked to below as well. : ) I’ve uploaded a YouTube video again for your convenience. I will research the correct equation and then append this post. If ANY equations aren’t on there, please comment below. Below are the most commonly used equations for the Business Strategy Game Quiz 2. The simulation uses non-standard definitions for financial formulas so googling the equation often won’t work. I commonly see kids get 40% on the second quiz. The Business Strategy Game Quiz 2 is MUCH more challenging than the first quiz.
