TOM CREEKS PTY Essay Example | Topics and Well Written Essays - 250 words

TOM CREEKS PTY - Essay Example The current capital employed by the company is $3500, 000 and that is the price that we are putting on the table, as a result, we are which means that we are not paying any goodwill to the company and taking over a profitable business. This is a good thing as we are investing in a profitable asset.Sir, I may also like to present you the profitability report of the company. The company has earned a profit of $653,000 in the last fiscal year. If this trend continues and we invest in the company, we are going to earn an ROI of 19%. This very good return and will earn us a profit rate greater than if we deposit the money in our bank account. This ROI is among the return rates on higher sides and will be able to help us earn a decent amount of return on our investment.As far as the share capital is concerned, it is around 56% of the company's resources. This is an ideal ration and the company is neutrally geared. Due to this, our interest expenses will be low and we will be able to retain much of what we earn. Similarly, the company's working capital is in a very good position. We can easily clear our debts without endangering the company's liquidity position. Similarly, as we can see that the company has idle cash lying around in the form of excess working capital, we can put it to interest earning securities and this will further improve the company's profitability and we help us recover our investment.In the end,