Trx Finance Case

In: Business and Management

Submitted By drum75
Words 1627
Pages 7
TRX Inc. (Home Assignment). The Financial Analysts

Melissa Gottschall, Jillian Marchand, Scott Duggan, Cary Konopka, Blair MacLaughlin, Jake Baker

1) In general, what attributes make a company a good candidate for an IPO?
- Good Business History and Background: Investors will forecast future earnings off of the historical background of the company. It will also show that your company is stable. Many investors will be looking to hold the stock long-term, so if investors trust the background of the company, more people will be willing to invest.
- Experienced Management: Good management can ensure that the company will make decisions that are best for the company and to ensure profitability. Also, good management is the basis for growth and performance. Strong management will creates a good public image.
- Profitability: A profitable company tells investors that they will actually get a return on their investment. It also shows potential for growth, which can lead to dividends for investors.
- Growing Industry: A company can’t grow in a shrinking industry. In a growing industry, the company has better potential to capture a larger portion of market share.
- Growing Company: More is better. Investors will reach their maximum utility with a growing company. The objective is to maximize shareholder wealth. A growing company has the best chance of reaching this goal.

2) How does TRX compare on these dimensions? - Good Business History and Background: This company started up in 1999. This case has 6 years of data. - Experienced Management: The management team made a good decision to cut off low margin products in order to focus on their more profitable operations. This is an example of the quality of management in TRX. - Profitability: Over the last five years, TRX has yet to turn profit, although they are coming closer to turning a…...

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