VIP Class Notes (Whitney) (R + S)

Demo StudentYannis

Vocabulary

references (n) someone we have worked with previously who can vouch for us.
At the bottom of my CV, I have put 3 references for your consideration. (证明人)

Please see the attached document for your reference. (参照)

intellectual property (知识产权) IP

Make Money out of Thin Air

project (v) 
I finished my project with my team. (项目)

Here are the projected earnings for the next quarter. (预估)

vehicles (n) 车辆
Vehicles are an asset in the business.
Different types of vehicles: cars, trucks, vans,

variable (adj) 可变的
Every business has variable costs and they are depending on changing factors.

Reading

Due Diligence for a Small Business:
Even when dealing with a small business, due diligence can be a long and complicated process.

  • Check business records (查看记录)
  • Check references (证明人／负责人)
  • Look for “bad faith” (不诚实) or hidden secrets
  • Hire an accountant (会计) and or a lawyer
  • A confidentiality agreement (保密协议)
  • Due diligence checklist (尽职调查清单)

Due Diligence Checklist: 

  1. Financial DD
  2. Legal DD
  3. Operational DD
  4. Product DD
  5. Human Resources DD
  6. Asset DD
  7. Environmental DD
  8. Tax DD
  9. Intellectual Property DD
  10. Customer/Client DD

Financial Due Diligence:
A lot of analysis of the company’s financials:

Financial Statements: three types
Balance Sheet is a table which shows assets (things your company owns = good things) liabilities (things your company owns = bad things) and net worth (how much your company is currently worth).
Income Statement is also called profit & loss statement (or P&L) net income, also known as profit (income – costs of products sold, expenses and taxes) over a period of time e.g. 1 year
Cashflow Statement is inflow and outflow of cash caused by the business’ activities. We take the balance sheet and we analyse how to manage to invest (improving your current company or buying a new business), operating (managing your business day to day) and financing (how to pay for everything) activities.

Projections:
How much you estimate your company will earn based on your financial statements.
E.g. In 2019, it is projected that this company will have ¥500,000,000 revenue.

Capital Expenditure:
Money/funds a company spends on buying, maintaining and improving fixed assets such as buildings, vehicles, equipment and land.

Inventory:
Storage. A complete list of items that we have that belong to the business or that we need to make a product.

Bakery: inventory that you would need is for ingredients, utensils, stationary etc.
If you’re running out of something e.g. Flour, the inventory will help you to manage your quantities and when you should order new things.

Debtors and Creditors:
A debtor is someone or some business that owes money (money coming in)
A creditor is someone, the bank or another company that has lent money (money going out)

When you’re taking over a company, you need to see a full list of who money is coming from and who needs to be paid money on a regular basis.

Major Customer Accounts:
Long-term clients and customers – people and businesses that keep your business afloat.

Fixed and Variable Costs
A Fixed Cost is like rent, something that you have to pay no matter how much revenue you bring in.
A Variable Cost is like ingredients cost, something that changes depending on how much revenue is earned.

Profit Margin
How much you earn of pure profit (income – costs) per product.

Internal Control Procedures
How you manage and operate the business.