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- Are audited historical financial statements available?
- What is the current financial position of the business?
- Is it operating now?
- Is it making money?
- If it is losing money, how much money is being lost each month?
- What is the burn rate?
- What is the turn-around strategy and who controls it?
- Has a reputable firm of accountants issued an accountant’s report on the financial statements?
- Is the venture up to date on tax and other required filings?
- When is the business expected to become profitable?
- What is the expected return on investment (ROI)?
- What is the payback period for the investment?
- If the business plan is successful, how much will my investment be worth?
- How will profits be paid out (e.g. retained earnings, etc.)?
- How does the business compare to industry standards for (1) returns; (2) leverage; (3) and payables and receivables?
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Points That Investors Consider