In This summer 2000, two founders of the new Web-web-host are considering raising $5 million to $15 million inside a second-round financing from vc's. The job for that student would be to forecast the firm's cash receipts and payments in order to determine the firm's "burn rate," i.e., the speed of money consumption and just how lengthy the financial lending will sustain the firm. The brand new economy setting of the case permits the trainer to increase well-known financial abilities and ideas for an industry that draws in high student-interest. This case is ideally utilized in an opening finance course being an early exercise in predicting, modeling, sensitivity analysis, and interpretation. It's really a helpful foundation later on classes in cash-flow estimation and valuation. This case presumes the students happen to be uncovered towards the structure and interpretation from the statement of money flows (SOCF), and also the relationship from the SOCF towards the earnings statement and balance sheet. The case may also offer possibilities for interdisciplinary teaching with teachers in marketing and entrepreneurship.
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