Simulated versus Actual Firms: A Ratio Interaction Matrix Comparison

Abstract

This study demonstrates a method (of combining measures) designed to give a more integrated picture of the activities of a business enterprise. Business ratios were cast into an array of descriptive measures, then used for comparison between 21 simulated (in a computerized business game) and 20 actual U.S. firms. The ratio matrix appeared to facilitate an understanding of the interaction among the descriptive measures and in identifying similarities and differences between the two types of firms by showing a number of relationships on the same display.!n using the ratio matrix for analysis, fewer significant relationships were shown to exist within the actual companies than in the simulated firms. This was attributed to the likelihood of less structure in situations confronting real firms when compared to the contrived conditions with which simulated firms were designed. Advantages of the ratio matrix and limitations of its use are discussed.