Business Spotlight 08.2019

SKILL UP! 11

IN CONTEXT

The SiTuaTion:

Sue and Ron discuss

the option of an IPO for

Afoodable.

11. Everyone wins
    Sue: Actually, they are running a
    self-sustaining business. Unlike
    many start-ups, they’re not highly
    leveraged.
    Ron: What is the cash runway?
    Sue: By my calculations, they
    have a burn rate of €30,000, which
    means they have a runway of 12
    months. And, to be honest, these
    figures are conservative.
    Ron: We could do one round of
    funding this year, series A. As an
    exit strategy, we could consider
    going public in 2021. A rough es-
    timate puts their price-to -book
    ratio at below 1.5. That’s attractive
    for investors. We would get sev-
    en per cent of the money we raise
    in the IPO. That’s a win-win for
    everyone.

burn rate
, Kapitalvernichtungsrate
cash runway , Zeitraum für eine
gesicherte Finanzierung
self-sustaining
, sich selbst tragend

BASIC CALCULATIONS

Talking about ratios and for-

mulas is important in finance.

Here are a few examples of how

to talk about equations and

formulas.

+ plus

• minus
  = equals
  ÷ divided by
  x multiplied by / times

Phrase Bank

For a list of all the key phrases used in

the dialogues, see pages 12–13

ROI =

profits

cost of investment

x 100

Return on investment is cal-

culated by dividing the profits

by the cost of investment,

multiplied by 100.