A simulation analysis of cash flow attenuation under alternative financial operating structures

摘要

This paper presents the results of a simulation analysis of the stochastic processes which determine cash flow attenuation under alternative financial operating structures. The environment of the study is that of a rapidly expanding retailing firm, which must consider a myriad of alternative operating structures during its embryonic development. Simulation is employed to determine risk-return profiles for the various alternatives. Efficiency frontiers are next computed for each of five measures of profitability, over a time adjusted horizon. An operating structure which produces minimal attenuation, and hence maximal profitability, is then determined by analyzing the efficiency frontiers of the various alternatives.