Week 6 – Analysis Report

Lack of Capital
As stated in the weekly video warren has made a recent statement that CanGo is in need of additional funding to help fund the company’s future and growth and development. I have come across a plethora a ways to move around money to come up with a firm business plan so we can have flexibility with our assets.
We have to be reminded that capital resources are money a company uses to finance new ventures and projects. Simply put if there is a lack of funding with extended waiting period these programs will be crippled. I initially recommended crowd funding in the hopes that citizens will help us generate the needed funding. This is a great step in the right direction due to the fact that staff responsible for administration of (CCI) crowd funding would be minimal; once the website is established and the projects are selected, funds would be transferred to the appropriate program offices for dissemination to help the project meet deadlines. The obligation rates will be tracked on the website to determine if programs are on schedule. Reporting through this mechanism would eliminate additional bureaucracy and provide transparent tracking. This will help Cango understand our customer base and gives and also gives us asset time of completion before going to our lenders for a loan.
That is great way to but we cannot risk our company future on one venture of this size. There is time constraints that cannot be avoided liquid assets have to be there and if we miss deadlines the project will sink costing us more to recoup our losses making it harder to business at a later date.
I recommend we base our loans based on the cost of debts percentage and the interest rate associated with the loan. I am focused primarily on the internal rate of return, (IRR) to evaluate if there is a sizeable discount rate that our lenders will offer us. This rate will help with Cango capital budgeting to surmount (NPV) net present value of return to loan to zero.

Lack of Time...