Memorandum
Prepare a Memorandum which shows the following:
Investment Mix of $18,000,000 - debt, stock compensation, share issuance
Stock split decision
New shares issued and total proposed issued and outstanding by source
Founders ownership position and percentage of ownership compared against minimum percentage
Total long term debt outstanding versus limit by loan type and total unsued capacity of debt
Debt as a percentage of total assets and comparison against target and maximum percentage
Current Ratio and comparison against benchmark
Return on Asset
Return on Equity
Net income as a % of Revenue
WACC versus target
Recommendation on operational focus based on Turnover Ratios
Recommendation to proceed or not based on key criteria above
Concerns about future issue of shares
If you needed an additional $10 million what would you forecast as coming from earnings / debt / shares?