Here is an updated version of the blog post, tailored specifically around Glo-Bus Quiz 1 while using this capital structure problem as a high-value bonus preview for what’s coming next!
Ace Your Glo Bus Quiz 1: Key Concepts, Common Pitfalls, & Sample Walkthrough
If you are currently enrolled in a business strategy course, chances are you’re participating in the Global Business Simulation Strategy Game (Glo-Bus).
To ensure you understand the game rules and financial mechanics, your instructor will assign two main knowledge checks: Quiz 1 and Quiz 2.
- Glo-Bus Quiz 1 tests your foundational knowledge of the game mechanics, company operations, demand forecasting, and core financial definitions outlined in the Glo-Bus Player’s Guide.
- Glo-Bus Quiz 2 builds on those basics with heavy, scenario-based financial calculations.
To help you get off to a winning start, let’s walk through a critical financial concept that shows up early on—how to calculate a company’s capital structure.
Sample Problem: Capital Structure Calculation
Here is a classic sample question similar to what you’ll encounter when analyzing financial statements in Glo-Bus:
Given the Financial Statement Data (in $000s):
- Income Statement Data (Quarter 1)
- Sales Revenues: $50,000
- Operating Profit: $14,400
- Net Income: $9,555
- Balance Sheet Data
- Total Current Assets: $70,000
- Total Assets: $149,000
- Total Current Liabilities: $26,000
- L-T Debt (Draw against credit line): $33,000
- Total Equity: $90,000
- Other Financial Data
- Depreciation: $4,000
- Dividend Payments: $2,250
Question:
Based on the figures above, what are the company’s debt and equity percentages (capital structure)?
Answer Choices:
- 20% debt / 80% equity (20:80)
- 27% debt / 73% equity (27:73)
- 35% debt / 65% equity (35:65)
- 37% debt / 63% equity (37:63)
- None of these
Step-by-Step Breakdown
1. Identify Equity
From the Balance Sheet, Total Equity is given directly:
Equity=$90,000
2. Identify Debt (Watch out for this trap!)
A common mistake students make is adding Total Current Liabilities into the debt total. In Glo-Bus capital structure calculations, current liabilities are excluded. Only long-term obligations count as debt capital:
Debt=$33,000
3. Calculate Total Capital
Total Capital=Debt+Equity=$33,000+$90,000=$123,000
4. Calculate the Ratios
- Debt Percentage:Debt Ratio=$123,000$33,000≈0.2683 (or 27%)
- Equity Percentage:Equity Ratio=$123,000$90,000≈0.7317 (or 73%)
Correct Answer: Option 2 (27% debt and 73% equity / 27:73)
Download Our Free Glo-Bus Quiz 1 Study Guide (PDF)
Preparing for Quiz 1 is all about understanding the core rules and operational rules before your decisions count.
We’ve put together a complete Glo-Bus Quiz 1 Practice & Study Guide PDF to help you ace the exam on your first try.
What’s Inside the Glo Bus Quiz 1 PDF Guide:
- Key Player’s Guide Takeaways: Essential concepts, definitions, and operational rules summarized for quick revision.
- Practice Questions & Explanations: Real exam-style questions with detailed answer keys.
- Pro Tips & Traps: Learn the most frequently missed questions and how to avoid easy mistakes.
👇 [Click Here to Download the Free Glo Bus Quiz 1 PDF Guide]
You also download other PDF here
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