Financial analysis - likened to evaluation of suitor by a lady

Every generation needs a revolution - an entrepreneurial revolution

This post is reminded of the comparison made by a finance professor of financial analysis with a lady being wooed by many suitors.  The lady has to ask this question:

      1.  Does he have plenty of money (checking liquidity)

      2.  Is he stable (DE)

      3.  Does he have plenty of assets?

      4.  Is he indebted?

The professor I understand now heads an insurance company which sponsors many champion cyclists.

Using OPM to expand business

Every generation needs a revolution - an entrepreneurial revolution

Most businesses expand, or operate business doing the OPM -  others people money, Not their own money.  They call this leveraging  What are the methods/or application of this method?:

      1.  Bank loans;

      2.  IPO -  partial sale of equity

      3.  Suppliers credit

      4.  Down payment

      5.  Accelerated payment from customers (offering discounts for cash payment)

So instead of making it appear that the company needs the money, the perception is changed by saying:

      1.  Bond sale

      2   IPO

 What they mean really is they are taking your money, in exchange for higher interest or dividends to finance their growth.

Expanding the business and obtaining finance thereto is not a black art or rocket science

It really needs boldness and courage to go on leverage.  And have uncanny sense of the future that your product or service will sell, and that you can sustain the cash flow to repay the loan, pay the interest, or in the case of equity, to pay back dividends and or the principal (in case this is a private placement -  not listed at the bourse)

Thus a smart businessman does not have to fork out all his savings to finance his business expansion.  He leverages!   He uses other people's money.   Capital here means CAPITO.  Using ones head to obtain more funds for the business.

Thus its a poor excuse that one can not start business because one lacks capital.  There are many ways by which start up can take off.   It takes imagination, hard work and persistence

Why this post blogs?

Every generation needs a revolution - an entrepreneurial revolution

This post has been blogging for more than a decade.  Not  the typical blogger who does this for money

This post blogs because:

    1.  This serves as a log/memoir of thoughts and experience;

    2.  To share especially techniques and strategies for being better.

    3.  To be part of the net, even in tiny microscopic way.

Thus the blogs have to be insightful and deep.  Many now vlog, blog for popularity, for the sake of number of views, clicks and ads.   I dont mind if I get zero on ads and clicks.

To influence, to advertise.   (Maybe at times)