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Entrepreneur Case study analysis - Essay Example
This report shows the important considerations to be taken into account in finding the intrinsic worth of the Phil Classic Car Collection Limited. The various valuation methods utilized in the report recognizes both the importance of quantitative and qualitative analysis…
However, the quantitative analysis reveals that the company's true value is well below the asking price. This is justified by the company's declining profitability, risky financing, low liquidity, and over-utilized resources. Having conducted studies on quantitative issues regarding the financial statements in depth, it is also apparent that the initial cost of funding the anticipated purchase cost of the business in itself will have a substantial impact on the future profitability, liquidity and cash flow. Such financial pressures will occur in addition to other considerations.
Qualitative analysis revealed direct cost issues, need for investment in restoration and showroom facilities, and required improvement in human resources, together with the introduction of modern technological production, administration, marketing and accounting systems.
The prospective owner needs to take into account the need for additional cash outlay which is needed to boost the growth of the company. Consideration has to be given as to how the additional investment required to support these measures is to be funded. Human resources apprehension due to the new ownership should also be considered. ...