Business Spotlight 08.2019

(Nancy Kaufman) #1
SKILL UP! 11

IN CONTEXT

The SiTuaTion:
Sue and Ron discuss
the option of an IPO for
Afoodable.


  1. 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.
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