Tom.com TOM Online is a mobile Inter interlock partnership in China, operating the popular Chinese-language Internet portal (www.tom.com) and offering a variety of online and mobile services, including wireless internet and online advertising. The TOM conflux is the majority shareholder. It is a subsidiary of the TOM Group, controlled by Li Ka-Shing. ------------------------------------------------- 1. Evaluate the financial condition of Tom.com before listing. In family 2000, Tom.com has de none its IPO to seek dandy for future growth. A match of 42,800,000 would be issued under the Public Offer. It was estimated that through the IPO, Tom.com would hike net proceeds of approx. HK$640 million which will be invested in versatile areas such as technology development and core development, promotional material and marketing activities, e-commerce business, strategic investments and additional general working capital of the company, for the year ending 31 Dec ember, 2000. To determine whether or not to invest in Tom.com, we shall analyse its financial ratios in legal injury of breadability, short-term liquidity, and leverage respectively in the prior fiscal year. Using the 1999 figures from Exhibits 3 and 4, Tom.
com Profitability Ratios Profit security touch on = Net Income / sales = -81,129,000 / 51,695,000 = -156.94% In terms of profitability, this suggests that Tom.com generates ban profits of HK$1.57 for any dollar in sales and is unable to c everyplace its meliorate be with revenue enhancement. However, we should also wrinkle that Tom.com is a new menace incorpo rated only in late 1999; therefore profit ma! rgin during the year whitethorn not be a fair representation of the companys financial condition. The negative profit margin was callable to high overheads and low revenue as its business was nonoperational in their start-up stages. It may pick-up over time as Tom.com captures large and spread its fixed costs over more revenue. To get a better flick of the financial condition of...If you requisite to get a beneficial essay, order it on our website:
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